Autumn 1992 1

From the Chairman of the Editorial Committee Page 2David Walden, Senior Vice President, Bolt Beranek and Newman Inc.

What is the Center for Quality Management? Page 3Tom Lee, President, Center for Quality Managementand David Walden, Senior Vice President, Bolt Beranek and Newman Inc.

Goal Deployment at Varian Crossed Fieldand Receiver Protector Products Page 9Dennis Gleason, Vice President and General Manager,Crossed Field & Receiver Protector Products Business Unit, Varian Associates

JIT II: A New Approach to Supply Management Page 15Lance Dixon, Director of Purchasing and Logistics, Bose Corporation

BBN's 7-Steps Implementation Page 19Cliff Scott, Senior Consultant, Bolt Beranek and Newman Inc.

7-Steps to Reducing New Product Time-to-Market Page 28Dennis Buss, Vice President of Technology, Analog Devices Inc.

Operationally Defining Metricsfor the Product Development Process Page 34Metrics Subcommittee of the Center for Quality Management

Other CQM Research on the Product Development Process Page 47

Volume 1, Number 1 Autumn 1992

CENTER FORQUALITY OF MANAGEMENT

JOURNAL

© Copyright 1992, 2000 The Center for Quality of Management, Inc. Permission to make digital or hard copies of all or part of this work for personal or classroomuse is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the fullcitation on the first page. To copy otherwise, to republish, to post to servers, or to redistribute to lists requires prior specific permission and/or a fee.Copying is by permission of The Center for Quality of Management, Inc. • One Alewife Center, Suite 450 • Cambridge, Massachusetts 02140 USATelephone: (617) 873-8950 • Email: publications@cqm.org The Center for Quality of Management Authors retain rights for re-publication of their articles.

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Autumn 1992 3

Tom Lee and David Walden

In the fall of 1989, seven companies in thegreater Boston area (Figure 1) decided to orga-nize a Center for Quality Management (CQM).Their goal was to facilitate mutual learning ofTotal Quality Management (TQM) in order toaccelerate its implementation.

Analog Devices, IncorporatedBolt Beranek and Newman Inc.

Bose CorporationDigital Equipment Corporation

GE Aircraft EnginePolaroid Corporation

Teradyne Incorporated

Figure 1: CQM Founding Companies

Companies that decide to implement TQMtypically are suffering from, or anticipate, abusiness crisis. It is difficult for them to find themotivation to make the changes required byTQM if everything is going well. Also, the CEOtypically has some knowledge of TQM, usuallyfrom sources outside the company, such as com-munication with other CEOs and personal expe-riences.

The companies that formed the Center forQuality Management had these typical charac-teristics. With perhaps a couple of exceptions,they were suffering from the slowdown of theeconomy that began in the late 1980s. Also,several of their CEOs had personal experiencewith Japan and had observed its business prac-tices. At least one had lived in Japan, most haddivisions in Japan and traveled there with someregularity, and some had studied Japan’s busi-ness practices through trade associations, suchas the Massachusetts High Technology Counciland the American Electronics Association.

These CEOs avoided the temptation to dis-miss Japan’s business success over the past sev-eral decades as the result of domestic or unfairtrade practices—a lower cost of capital resulting

What is theCenter for Quality Management?

from Japanese government policies that discour-age consumption and encourage savings, coop-eration between the Japanese government andindustry, or pricing based on what the Japanesecall “lifetime product volumes” which we in theU.S. often call “dumping.” The CEOs believedthat, whatever unfortunate business practicesmight exist, something might also be learnedfrom Japanese management methods.

Thus, business crisis and information aboutTotal Quality Management as practiced in Japanmotivated these CEOs to involvement with TQM.

In November of 1989, Professor Shoji Shibaof Tsukuba University, which is north of Tokyo,gave a seminar at MIT that several of the CEOsattended. In the 1980s, Professor Shiba had beena colleague of the senior author, Tom Lee, at theInternational Institute for Applied SystemsAnalysis in Vienna when Lee was director there.Professor Lee arranged the seminar at MIT andinvited the CEOs.

The seminar had a strong effect. For in-stance, Steve Levy, the CEO of Bolt Beranek andNewman, requested that all the senior managersrearrange their schedules so they could meetwith Professor Shiba later that week.

In the weeks that followed, Tom Lee visitedJapan to study the Union of Japanese Scientistsand Engineers’ methods for promoting quality,and he arranged additional meetings between theCEOs and Professor Shiba to discuss how toimprove quality practices here.

What is Total Quality Management?

Total Quality Management is an evolving setof concepts and practices for creating higherquality products and services and increasing cus-tomer satisfaction. Our old management meth-ods worked well in a stable world where custom-ers didn’t demand many choices, and there werelong product life-cycles. They don't work aswell in today's rapidly changing world, however.Our highly structured, functionally divided or-ganizations just don’t know how to change fastenough to meet the rapidly changing demands oftoday’s world.

The Centerfor QualityManagementwas createdby companieswho con-cluded theyhad to learntogether tocope with arapidlychangingworld. This isthe story of itsfirst two yearsof existence.

Autumn 1992 4

TQM emphasizes four major areas of activ-ity. Professor Shiba sometimes calls them "FourRevolutions in Management Thinking."

1. Customer Focus: We must identifychanges in customers' needs quickly andallocate resources for satisfying them.

2. Continuous Improvement: We must im-prove everything in the organization con-tinuously, studying the facts and validat-ing what we do by experiment, in orderto achieve ever-higher levels of qualityand shorter times to market.

3. Total Participation: We must focus ev-eryone in the company on identifyingcustomers' needs and improving the waytheir jobs are done.

4. Societal Learning: We must encourageconstant interaction among people in ev-ery kind of organization in society tocreate a culture where all support rapidand effective learning and improvementof quality.

The belief in societal learning was central to

the founding of the CQM. TQM is not today atheory that can be learned from a book. It is anongoing societal and organizational experiment.It is too inefficient, however, to have each com-pany carry out its own experiment. A companymay waste a lot of time reinventing the wheel.Worse yet, it may invent a square wheel. Also,each company can only afford to carry out alimited number of experiments. Many compa-nies working together can avoid wasteful experi-mentation and go faster.

Professor Shiba pointed out to us that theU.S. needs more organized and disciplined waysfor organizations to learn from each other, asthey do in Japan through organizations like JUSE(Japanese Union of Scientists and Engineers).The CQM was founded to help fill that gap, atleast for the New England region. Tom Leebecame President. Ray Stata, CEO of AnalogDevices, who had helped Tom Lee arrange thevarious seminars betewen the area CEOs andProfessor Shiba, became Chairman of the Boardof the CQM.

Photo 1 shows representatives of the found-ing companies at the public announcement of theformation of the CQM, together with the invitedspeaker Frank Voehl of Florida Power & Light,

Photo 1: Representatives of founding companies at the public announcement of the formation of the CQM. Seated: TomLee, President, Center for Quality Management; Frank Voehl, then-Vice President of Quality Services at Qualtec, Inc., anda speaker at the inaugural meeting; Ray Stata, Chairman, Analog Devices Inc.; and Stephen Levy, Chairman and CEO,Bolt Beranek and Newman Inc. Standing, from left: Ron Dias, Vice President, Personnel, Teradyne, Inc.; John Petrolini,Total Quality Management Manager, Teradyne, Inc.; Frank McCabe, then-Vice President, Corporate Quality andTechnology, Digital Equipment Corp.; Art Schneiderman, Vice President, Quality and Productivity Improvement, AnalogDevices Inc.; Dick Bellotti, Director of Corporate Quality Assurance, Bose Corporation; and Robert Conway, TotalQuality Advisor, GE Aircraft Engines.

Autumn 1992 5

Dr. Tom Leeorganized andbecame presidentof the Center forQualityManagement in1989. From 1950through 1980 heworked withGeneral Electric.He wasresponsible for allmajor R&Dactivities fortransmission anddistribution andlater served aschief planner forGE's energy andpower business.In 1980, hebecame professorof electricalengineering atM.I.T.

applied TQM tools to plan the Center.The design study followed TQM’s methods of

continuous improvement, including the PDCA(Plan, Do, Check, Act) cycle.

• Plan—We built teamwork, got somebasic education in TQM, and preparedto visit companies successfullypracticing TQM to learn about howthey practiced it.

• Do—We visited companies andinstitutions in Japan and the U.S. thatwere experts in the practice of TQM.

• Check—We consolidated the facts wehad learned, identified what consti-tuted a successful TQM implementa-tion, checked our conclusions againstthe Deming and Baldrige prize crite-ria, identified how to implement TQMsuccessfully, analyzed our companies’business needs, calculated whichaspects of TQM would have thegreatest impact on our companies’needs, and decided how the Center forQuality Management could help best.

• Act—We developed the first-year plan

the first company outside of Japan ever to winthe prestigious Deming Prize.

Figure 2 shows the mission statement of theCQM.

The mission of the Center for Quality Man-agement is to accelerate understanding andimplementation of quality management con-cepts and methods by creating a network oflike-minded organizations to share knowl-edge and experience. This will require acommon language and a shared understand-ing of the basic methodologies to defineproblems and design solutions. In the broad-est sense, the long-term objective of theCenter is to promote organizational andsocietal learning about how to improve theperformance of human systems.

Figure 2: CQM Mission Statement

The Design Team

Having decided to form the CQM, the found-ing companies next needed a specific plan for whatthe CQM would do and how it would function. Tenexecutives from the founding companies and threemembers of the MIT faculty and staff spent fiveweeks together conducting a design study under theguidance of Professor Shiba. The group becamethe Design Team. It learned about TQM and

Photo 2: The group learning process on a high-speed train near Tokyo—the group is applying one of theseven management tools to identify what was learned after a visit to a Hitachi plant.

Autumn 1992 6

David Walden isSenior VicePresident andCorporate QualityOfficer of BoltBeranek andNewman Inc. Heserves as BBN’srepresentative tothe OperatingCommittee of theCenter for QualityManagement andis Chairman of theEditorial Board ofthe Center forQualityManagementJournal.

and the plan for yearly PDCA, whichwould lead to the plans for succeedingyears.

Photo 2 shows the group learning process aboarda high-speed train to Tokyo, applying one of theseven management tools to identify whatt waslearned after a visit to a Hitachi plant.

The most important conclusions of the designstudy were:

• The active participation of the most seniorexecutives (CEO or CEO-equivalent) iskey to the success of TQM implementa-tion.

• TQM is a thought revolution, as de-scribed by Kaoru Ishikawa.1 It requiresa culture change. The ability to planand implement must reside in the orga-nization itself. The organization cannotcontinually depend on consultants, inthe traditional U.S. way.

To promote such cultural changes, the designteam recommended a committee structure, as shownin Figure 3.

The 6-Day Course, Networking,and Visiting Companies

In 1990, Professor Shiba developed two coursesfor senior executives. The first was a one-dayoverview of Total Quality Management.

After the one-day course, a number of CEOsrequested a more comprehensive course. ProfessorShiba then developed a six-day course for senior

1What is Total Quality Control? The Japanese Way, KaoruIshikawa, Prentice-Hall, Inc., Englewood Cliffs, NJ, 1985.

Board of Directors

Executive Director

Staff

Operating Committee

Standing Committees

SeminarsEducation and TrainingNetworkingPromotionResearch, Document, and LibraryFinance

President

Figure 3: Recommended Committee Structure

executives, with help from members of the CQMDesign Team. Figure 4 shows the syllabus of the 6-Day Course.

Day 1 Evolution of Quality, Customer Fo-cus, Improvement as a Problem Solv-ing Process, the KJ Method

Day 2 Reactive Improvement, 7 Steps, 7 QCTools

Day 3 Proactive Improvement, 7 Manage-ment and Planning Tools

Day 4 Teams and Teamwork

Day 5 CEO Involvement, Mobilization In-frastructure

Day 6 Strategies for Phase-in, ManagerialDevelopment, Societal Learning

Figure 4: 6-Day Course Syllabus

In 1990, 46 senior executives took the 6-DayCourse led by Professor Shiba, which includedmuch group work with TQM tools and a number ofcase studies presented by CEOs, senior managers,and members of the Design Team. A key conceptof the course was “no delegation of improvement."Top executives have to participate in and coachimprovement activities; they can’t simply leavethem to people under them. This concept wassupported in many ways; for example, the CEOsthemselves presented case studies at the 6-dayCourse.

Members from the CQM companies worked asfacilitators, teaching assistants, and note takers,

Autumn 1992 7

supporting the “transfer of technology” from Pro-fessor Shiba. Notes on the entire six days wereconverted into transparencies and draft text whichcould be used again.

In 1991 CQM offered the 6-Day Coursethree times, with most of the lectures given bysenior executives of the member companies. Bythe end of October of 1991, exactly 125 seniorexecutives had gone through the 6-Day Course.The instructors of the course have included:

Ray Stata, Chairman of Analog Devices and ofthe Center for Quality Management

Art Schneiderman, Vice President of AnalogDevices

Steve Levy, CEO of Bolt Beranek and Newman

Mike LaVigna, President of Bolt Beranek andNewman

Dennis Gleason, Vice President and GeneralManager of Varian Associates

Most of the participants recognize the 6-DayCourse as an excellent practical framework forplanning and implementing TQM. It goes be-yond the “what” and “why” of TQM to the“hows” that a senior manager has to address.Alex d’Arbeloff, chairman and president ofTeradyne, said in a lecture: “This showed mehow to do something. In the end, you have to dosomething!”

In 1992, the CQM Training and EducationCommittee organized eight sessions of the 6-Day Course, including one in Europe and one inCalifornia. The sessions outside New Englandwere arranged at the request of both our membercompanies who have operations outside of Bos-ton and other organizations in these regions whofound such education urgently needed. The listof CQM company executives who taught days ofthe course increased to handle the expandedcourse schedule.

In the second half of 1990, 17 new membercompanies joined the CQM. We quickly found,however, that to serve the member companies weneeded more people from CQM companiesknowledgeable in TQM. That was a constraintwhich led to the decision to cap the number ofcompanies at 24 through 1991. (Figure 5 showsthe list of members as of June1992.) By 1992,because we now have enough graduates from the6-Day Course, the Board of Directors decided toaccept new members again.

Member Companies

Allegro Microsystems, Inc.Analog Devices, Inc.

BALCO, Inc.Bard (Cardiovascular)

Bolt Beranek and Newman Inc.Bose CorporationBTU International

Carrier CorporationConrail Corporation

Digital Equipment CorporationGE Aircraft Engines

GenRadHarvard Community Health Plan

Helix TechnologyHewlett-Packard Company

Ionics, Inc.Keane, Inc.

Kollmorgen CorporationLily Transportation

Mercury Computer SystemsNaval Underwater Warfare Center

New England Electric SystemPolaroid Corporation

Praxis International, Inc.Sippican

SRI International, Inc.Stratus Computer, Inc.

Sun MicrosystemsSynetics

Teradyne, Inc.Varian Associates

Whistler Corporation

Figure 5: List of Members as of June 1992

Shoji Shiba also introduced skill courses,such as the 7 Steps Method, in member compa-nies, and these spread to other companies. Whenthese companies give such courses for their ownemployees, they frequently reserve spaces forpeople from other companies to observe. Whena member company has Quality ImprovementStory days, other member companies may beinvited to send observers. In these ways thecompanies facilitate shared learning.

Teaching courses is only one of the ways weencourage mutual learning. In 1991, a network-ing committee was organized to facilitate mutuallearning among people with comparable respon-sibilities. CEO roundtable meetings are designedto help CEOs learn advanced topics in TQM.Networking meetings of Chief Quality Officerspermit exchange of company needs and experi-ences. Networking activities for people in otherfunctions are planned for 1992.

Autumn 1992 8

Visiting outstanding companies is anotherway of learning. In addition to the visit to Japanby the Design Team, a group of CEOs and seniorexecutives visited NEC in Japan to understandtheir experience in applying TQM to technicalwork. We are planning other visits.

We believe that learning from other compa-nies beyond the New England area is also impor-tant. We have a seminar committee for thispurpose. We have heard from outstanding com-panies like Florida Power & Light, Xerox, TexasInstruments, Corning, Motorola, and others.

In 1991, we organized a research committeestudy so we could learn new TQM topics. Thiscommittee is translating important Japanese pa-pers and doing research to advance the state ofthe art (e.g., developing process metrics for prod-uct design.)

In the formative stage of the CQM, the Boardof Directors decided that the Center should de-velop a close relationship with academic institu-tions so that TQM would become an integral partof their education and research programs. In1991, a special class of membership was estab-lished the University Affiliates. We now haveseven members in that category (see Figure 6).

University Affiliates

Babson CollegeBentley CollegeLesley CollegeBoston College

Boston UniversityMassachusetts Institute of Technology

Tufts UniversityWentworth Institute of TechnologyWorcester Polytechnical Institute

Figure 6: CQM Member Companies andUniversity Affiliates

Summary and Future Challenges

In summary, the first year of the CQM, 1990,was a year of planning and organization. Thesecond year, 1991, was a year of orientationdeciding what was really important to do andgetting it started. The third year, 1992, has beena year of expansion and consolidation. A num-ber of new companies, large and small, serviceand manufacturing, joined the CQM (see Figure5). Dan Dimancescu, a consultant and author,

was hired as Executive Director and he has un-dertaken to adapt the organization structure tothe CQM's current needs for growth and activemembership involvement.

The CQM has several long-term aspirations:

• Handle CQM company needs outsideof New England, for example, in Cali-fornia, Europe, Japan.

• Participate in the development of anational quality culture in the U.S.

• If the CQM model works well, eitherexpand it or help others copy the CQMmethods.

• Develop improved, advanced meth-ods of TQM, moving beyond what wecopied from Japan.

The last point is particularly important. Wecopied Japan because it was efficient to do so.We have to adapt what we learned from Japan toour national and company cultures. We mustcontinuously improve our TQM to address thechanging world and its competitive pressures.•••

Jour

nal O

n-Li

ne

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The CQM Journal is refereed. However, it is not an academic publication. Experiencesand ideas will be published if they seem likely to be useful to others seeking to improvetheir organizations.

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Editorial Board

David Walden, ChairmanCenter for Quality of Management

Stephen GravesProfessor & LFM Co-DirectorMassachusetts Institute of Technology

Ted WallsBoston College

Robert Chapman WoodWriter

Alan GrahamConsultantPugh-Roberts Associates

Shoji ShibaTokiwa University

Production Team

Eric BergemannPublisher

Kevin M. YoungDesign & Production

Jay HowlandCopy Editing

CQM Officers

Ray StataChairman

Gary BurchillPresident

Thomas H. LeeTreasurer and President Emeritus

William WiseClerk

CENTER FOR QUALITY OF MANAGEMENT JOURNAL