Legitimizing Process Incapability

This article appeared in The Smart Manager, November-December, 2017.

On one of my monthly visits to the head office of a television manufacturer, the Chairman was a worried man. No. Correction. He was in a state of shock.

He purposefully took me to his plush Chairmans’ Office, and shared a devastating quality lesson he had learned the previous day. From a potential Korean mega buyer of color televisions.

Two Koreans had arrived in his office at the dot of 8 am. They had no time to sit in the Chairman’s Office; refused the Chairman’s courtesy of a cup of tea; went straight to the shop floor.

These two Koreans walked the shop floor making notes in their pictoral script. They whispered to each other, at regular frequency over a four hour walk.

At noon, they finally had a meeting with the gentleman Chairman at his office.

“Why do you paint your machinery grey?” was the first question.

“Why do you have incoming inventory? And work-in-progress inventory? And finished goods inventory?”

More: “How many inspectors do you have?”

Even more: “How many after-sales-service engineers do you have?”

The Chairman confessed that he had fumbled with his answers.

The concluding remarks of the Koreans were:

“Respected Sir, we paint our machinery white to sensitize the workers for detecting errors. Also we see strong correlation between inventory and process incapability. Further, your army of inspectors reinforces weak process capability.  Finally, your large after-sales-service department leads us to ask: Is your product so unreliable and bad?”

“Our advice to you Sir, is that you improve your processes and thereby reduce your costs. We would not like to pay for your chronic problems.”

Lessons Learned:

  1. Large buyers purchase ‘process capability’
  2. Global buyers give ‘product reliability’ high weightage in their purchase decisions
  3. Light color machinery creates a climate for quality work
  4. Inventory in a factory is a red flag announcing process incapability
  5. Process incapability is legitimized in the budget: inventory costs, inspectors, after-sales-service engineers!
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