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146029 1 (1992-01-01)

handle is hein.gao/gaobacwie0001 and id is 1 raw text is: EROX, THE COMPANY that created the cop- ier industry-the company whose name is synonymous with plain-paper copying- faced a tough challenge during the 1970s. As Japa- nese copiers of comparable quality and lower price were shipped into North America, Xerox's share of the North American market plunged from 93 per- cent to 40 percent. Ford Motor Company was having similar prob- lems. Between 1978 and 1982, its U.S. sales of cars and trucks fell by 49 percent, resulting in a cumulative operating loss of more than $3 billion. Around this same time, Milliken & Com- pany-a privately owned textile manufacturer long recognized for quality products and its state-of- the-art technology-began to ask why some of its Japanese competitors achieved higher quality, less waste, greater productivity, and fewer customer JOHN E. WATSON is an Assistant Director and THOMAS W HOPP is a senior evaluator in the Trade, Ener, and Finance Issue Area of GAO's National Security and International Affairs Division. 34 THE G-A*O JOURNAL complaints, even though they used technology less advanced than Milliken's. The reasons, company executives found, lay in management approaches and personnel practices that drive improvements in quality and efficiency. Milliken, Ford, and Xerox have since adopted such practices. The results? Since the early 1980s, Milliken's productivity has increased 42 percent and sales have risen significantly, Between 1981 and 1989, Ford's market share rose from 16.3 per- cent to 22.4 percent; the company moved from a net loss of $1 billion to a net profit of $4 billion. And Xerox has recaptured its leadership in docu- ment processing technologies. These companies' experiences are not unique. In recent years, a number of U.S. companies have found that they could not sufficiently raise their standards of quality by using conventional ap- proaches to managing product and service quality. Instead, like Xerox, Ford, and Milliken, they have adopted a new management approach known as total quality management (TQM). Traditionally, management has sought to en- sure quality through inspection at the final stages of production, just before the product or service is EXPLORING QUALITY MANAGEMENT I John E. Watson & Thomas W Hopp THE PRIVATE SECTOR'S EXPERIENCE WITH TOTAL QUALITY MANAGEMENT U.S. companies are learning that quality pays dividends.

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