q Medieval Europe: craftsmen organized into unions
called guilds in the late 13th century developed strict
rules for product and service quality. Quality products
carried inspection marks and often master craftsmen
marks that served as proof of quality for customers.
q The industrial revolution gave birth to the factory
system which, with its emphasis on productivity,
started in Great Britain in the mid-1750s. American
followed suit in the 1800s and later developed the
Taylor System (scientific management). An inspection
function was added to ensure quality before the
products reached customers.
A Brief History of Quality (I)
q During World War II, quality became a critical and an
important safety issue. The U.S. armed forces inspected
virtually every unit produced to ensure that it met the
standards. They soon realized that sampling inspection was
a more feasible alternative to unit-by-unit inspection. The
military standard, Mil-Std-105, was adopted for all contracts
until late 1990s.
q After the war, America helped Japan rebuild and sent two
quality experts: W. Edwards Deming and Joseph M. Juran.
Japan took a new “total quality” approach, focusing on
improving all organizational processes through the people
who used them instead of inspecting products in the end of
the manufacturing process. This was the beginning of the
Total Quality Management or TQM.
A Brief History of Quality (II)
q A parachute rigger is a person who is trained or licensed to
pack, maintain or repair parachutes.
q From the US Army job description MOS 92R: As a Parachute
Rigger, you’ll ensure the safety of every paratrooper you
work with. You’ll inspect, test, and pack parachutes, their
extraction and release systems, and all the associated
components of the parachute system. You’ll be responsible
for the safety and repair of all parachute equipment before,
during, and after an airdrop operation.
q Riggers are required to jump: “If I’m not willing to jump my
own chute, why should any other soldier jump my chute?“
motto of the
rigger is: “I
will be sure
q Kaizen, aka continuous improvement: a long-term
approach to work that systematically seeks to
achieve small, incremental changes to improve
efficiency and quality.
q People live by the mantra to “Get 1% better each
q Pursuit of perfection examples: Japanese Metro
Subway driver’s precision driving, Lexus cars, Seiko
Spring Drive watch.
Meaning of Being Exact and the
Pursuit of Excellence: Japan
The Metro runs like clockworks and is an example of
how the Japanese train their employees for safety and
high quality standards.
Japanese Subway System: Metro
Lexus (Toyota) challenged the luxury market…and succeeded!
Another Example of Japanese
Seiko Spring Drive
Seventy years of research & development and technological
breakthroughs created this Seiko Spring Drive watch,
breaking away from Swiss dominance in watch making.
q Just when you think that everything from Japan is good
with their pursuit of perfection, think again!
q The Amagasaki rail crash in 2005, caused by driver
rushing to make up the 90 seconds delay earlier.
q Remember the Takata airbag recall? Google it if you
Scandals q Kobe Steel:
q Toray: carbon
fiber to Boeing
to Japan military
q Nissan and
Why does Germany make so many quality products?
Quality Products from Germany
q The quality and extent of their vocational training to
prepare young people for skilled manufacturing jobs.
q 99% of companies are family owned small and medium
sized companies (mittlestand) for generations and focus
on one tiny bit of business but do it on a world scale.
q Co-determination: the workers and management work
together from bottom to board level.
q Germans strive for perfection and precision in all
aspects of their lives and there is great emphasis on
making sure that “the trains run on time.”
q German people embrace the values of efficiency,
thriftiness, hard work and industriousness.
The Secrets of German Quality
q The German education system is
much more geared to vocational
training than many of its
q The quality and extent of their
vocational training to prepare
young people for skilled
q The young men and women go
through the (paid)
apprenticeship system and learn
that the goal is excellence
The Secrets of
q The Mittelstand
commonly refers to
small and medium-
sized enterprises in
q Mittelstand firms
are usually defined
as enterprises with
annual revenues of
up to 50 million
Euro and a
maximum of 500
q Family ownership or family-
like corporate culture with
q Long-term focus
q Investment into the
q Lean hierarchies
q Customer focus
q Social responsibility
q Strong regional ties
The German Mittlestand
q They are companies that produce inconspicuous
products and dominate in the markets they compete.
q Most of their products are used in the manufacturing
process or subsumed by the end product therefore
unknown to consumers.
Common characteristics according to Hermann Simon:
• Combine strategic focus with geographic diversity.
• Emphasize factors like customer value.
• Blend technology and closeness to customers.
• Rely on their own technical competence.
• Create mutual interdependence between the company and
Germany’s Hidden Champions
Germans Are Not
Perfect! q Siemens: $1.3B bribes to gov’t
q VW: falsified
test, $25B recall
in the U.S.
q Deutsche Bank:
Please research the following questions and provide
evidence to support your answers.
Everyone: Watch Steve Jobs’ interview on quality and
relate our course materials to his discussions.
Everyone: What does it mean to be exact in your everyday
activities? Do you practice it? Why or why not?
Everyone: Why did quality scandals happen in
Everyone: What can we learn from the quality philosophy
and practice of Japan and Germany? Is it something that
can be duplicated in other countries/companies or is it
deeply embedded in their cultures?
Be sure your group is ready to lead and/or
discuss the following question in class, with
research or facts-based evidence.
We did not mention American quality. If you were
to lecture on American quality, what would you
characterize it? What makes American products
good? Give at least two iconic examples that
showcase genuine American quality. Be sure to
provide references and evidence to back it up.