Your company's future depends on this

TED Miller, president of Miller Company, has successfully implemented quality management systems for IBM, Martin Marietta, and Hughes Aircraft.

But as he stood before the NATM audience, he wanted to make one point clear: It's beneficial to companies of any size. In his presentation, “The Essence of Quality Management,” Miller was joined by Andy Gehman, president of MGS Inc in Denver, Pennsylvania — a company of 150 employees that has utilized Miller's expertise and quality management system.

“Quality management system is not scary,” Gehman said. “It's not something for global billion-dollar companies. It's for managing and controlling every size company. It's as smart as you want to make it or as stupid as you want to make it.”

Miller said quality management is nothing more than good business management, which involves stable processes (“Stabilizing that basic flow from when a customer says, ‘This is what I'd like,’ until you deliver it to them”), clear direction from your organization (“having a vision and a mission”), and managing for the future.

He said it is not the quality department, inspection, or the flavor-of-the-month quality program, whether that's TQM, SPC, or 6 Sigma.

Gehman said he has worked with some global companies that had 21-person quality departments, multiple forms, and “inspectors running around with clipboards.” He said he was initially scared and intimidated because he didn't want his company to be like that.

“What I found was that quality management system is not having this quality department that runs your company,” he said. “You can have a good quality management system without having this giant, overbearing quality department. You will need people to inspect things. It could be an inspection group or the people doing the work.”

Miller said quality used to be confused with perfection. But he said we shouldn't be looking for perfection, but instead for what the customer wants — and then delivering it.

To do that, he said a company needs to get control of its major business processes (marketing and sales, design, operations, and installation and service), provide clear direction for the organization and disciplined deployment (vision, concise mission, defined objectives and targets, and measurable results), and manage the future by establishing a project management process (develop strategy, assess the need and types of projects, tailor the process to the organization, conduct the training, and implement the process).

Gehman said that in his company, getting control of the major business processes is called “the sewage system” because “sometimes there's a backup.”

“How many times do you take on an order you can't make delivery on?” he asked. “Does sales give engineering the wrong information or not enough information? Does engineering give the manufacturing group the wrong or not enough information? Does it get to shipping and they don't know where they're supposed to send it? Those are examples of your sewage system.”

They said the advantages of a formal quality management system are:

  • Managed, controlled activities. “Having the expectation this will flow without blockage.”

  • Improved interface. Miller described how the Girl Scouts have a game called “Whisper Down the Lane”, in which one girl verbally passes a message to the girl next to her, who passes it to the girl next to her, and on down the line. By the time it gets to the 12th girl, it hardly resembles the original message. He said that frequently happens in manufacturing companies when a customer calls on Friday to make changes on a product that is scheduled to be completed the following week.

  • Provides a catalyst to examine and improve management and process procedures.

  • Reduces employee frustration. “It eventually reduces it,” Gehman noted. “Not everybody will be happy in the beginning.”

  • Insures continuity of approach. This leads to a consistent product, so the customer expects it to be just as good or better every time he receives it.

  • Provides the basis for management control through internal audits. “It's a good way to find out what you're really doing.”

  • Provides processes for good problem management through corrective and preventive actions. “It helps identify problems that are going to reoccur, puts responsibility in the right place for resolving these issues, and makes sure that when you resolve them, you're not just coming up with a solution to get to this thing. It's getting to the root of the problem, and it is for real.”

  • Basic utilities should be in place.

Select a model

Miller said companies should select a model to use, such as ISO 9000. (It's available at or by calling 800-248-1946. Ask for ISO 9001, because ISO 9000 has three documents in that series.)

He said it's rooted in a document that was created in the 1940s to construct an industrial structure to support the World War II effort, and is now used by over 500,000 organizations worldwide.

After that, companies should perform GAP analysis by taking ISO 9001's 220 requirements and meeting with company executives and asking, “How well do we do this?”

Then an implementation plan should be developed by deciding which holes to fill first.

“We went from 60 employees to 150 employees in a few years,” Gehman said. “You need the people who know what they're doing to continue to do what they're doing. They don't have the time to tell the new people what they're supposed to be doing. Doing this really helped us do what we do.”

Miller said the basics of ISO 9001 are:

  • Management responsibility

    Management is responsible for the development, implementation, and continual improvement of the company. Make sure people integrate into the management system. Don't let them see this as a separate exercise.

  • Resource management

    The resources needed to implement, maintain, and continually improve the system must be provided. Do you have the training program in place to handle new employees, particularly if you're in a growth mode?

  • Product realization

    The organization must plan and develop the sales, engineering, purchasing, manufacturing, and service processes needed to satisfy the customer requirements.

  • Measurement, analysis, and improvement

    The organization must plan and implement monitoring, measurement, analysis, and improvement processes.

Document procedures

Miller said procedures should be documented because a company should assist employees in knowing what to do, how to do it, and when to do it; provide material to train employees in how to do their work; help new employees come up to speed quickly and correctly; identify opportunities to simplify and improve procedures; reduce confusion, frustration, lost time, extra work, and cost, and improve morale; provide a means to audit compliance with procedures; build the “corporate memory” of how to operate; and stabilize the system used to operate the business.

“With MGS, we ended up with 15 or 18 procedures — one or two pages each,” Gehman said. “So we're not talking about 3” binders worth of procedures that no one ever gets to look at. We're talking about procedures that are condensed and useful.”

Gehman said good problem management requires organized identification of problems, use of problem-solving tools, and planned avoidance of problems.

“This will not eliminate problems,” he said. “It just helps you manage your problems. It helps you decide, ‘Should we do something about them? And when, how much, and who?’ This is a method of identifying and prioritizing and addressing and getting to the real root cause in a system.”

Added Miller, “The term ‘root cause’ is critical. That's referring to eliminating these repetitive problems. I'm sure that you in some point of time solved the same problem three or four times.”

Miller said clear direction involves a vision (picture of the future), mission (broad statement of intent), objectives and targets (measurable activities), and results (review to adjust vision, policy, and objectives).

“A long-term plan makes you think about out-of-the-plan opportunities,” Gehman said. “We get bombarded with requests for things that have nothing to do with what we're doing and what we want to do, and some of them are extremely attractive. We got a request to build buoys for the Coast Guard. They were going to provide $25 million worth of revenue a year. But we would have derailed everything else we were working to do. We'd spend and invested our time and energy on these customers here. If we would've jumped on this out-of-the-plan opportunity, there's a good chance that all the stuff we'd be working on would go down the toilet. Our mission helped us from getting derailed.”

Miller said managing the future involves strategic planning, managing organizational growth (the organization should be structured for the future, not the present), and managing projects. He said many organizations do a poor job of managing projects because their focus is on managing today's business, leaving the activities that create the future to sort themselves out.

He encouraged companies to sustain by supporting, strengthening spirit, being courageous, and enduring.

“It's a long, hard struggle,” Gehman said. “But I think we're fighting the right fights. We're looking at controlling the right things. We had 63% growth in 2004, and the wheels didn't fall off of our company. This system didn't cause 63% growth. But this tells us, ‘Do it without crashing at the side of the road.’”

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