Managing for Quality and Performance Excellence 10th Edition by James Evans ,William Lindsay

Exercise 13

In this chapter, we noted that many of today's quality approaches evolved in ancient China. Jack Pompeo, a telecommunications professional who relocated to lead quality initiatives at Huawei Technologies, provides a first-hand look at quality in modern China.
Quality processes today continue to be influenced by remnants of ancient policies and practices established 3,000 years ago. China continues to exercise strong centralized oversight over end-to-end production processes, extending from the purchase of incoming materials and in-process testing through final acceptances and customer care. Today's Chinese quality systems strongly emphasize tools, methodology and measurement, and place great importance on key quality management processes, including self-inspection, traceability, and recruiting and training of workers. However, even in light of recent and highly-publicized recalls, China's population is adapting and learning rapidly and is hungry for best practices and new challenges.
Today, China is seeking to introduce new ideas like total quality management and team empowerment, which have taken Western society decades to adapt and integrate into business management, in a fraction of the time. China is striving to improve its education, health, living standards, and, most important, its manufactured consumer products, and is embracing modern quality management philosophies. In just the past few years, Chinese manufacturers have adopted a wide array of quality tools and techniques. This has created a clash in China's desire to maintain balance between a centuries-old culture and the demands placed on the nation by technological progress.
China has an official policy to grow the economy about 8 percent annually, the rate state officials calculate would create the 15 million new jobs each year needed to absorb new entrants into the labor market and discards from the shrinking state sector. Every policy is calibrated to ensure economic output continues to expand at this rapid pace. Like businesses in the rest of the world, Chinese organizations are driven by numbers. They identify gaps in their quality management systems and are closing them quickly. They understand that they have a narrow window of opportunity to transform themselves from low cost producers to competitive and high quality global leaders.
Huawei Technologies is one of China's largest telecommunications manufacturers, with annual sales of more than $10 billion. The company is located in Shenzhen, in the southern portion of the Guangdong Province on the eastern shore of the Pearl River Delta, neighboring Hong Kong to the south. Huawei's products provide reliable telecom services to more than 100 countries. But the company's goal is not to be just another telecom manufacturer; it is to be the quality leader in the telecommunications industry. Huawei's senior management recently declared the company's desire to be the "Toyota of the telecom industry." To achieve this, Huawei has studied Western telecom manufacturing in great detail and has invested heavily in the latest tools and technology. For example, Huawei uses specific competency models and qualifications for each job role and level; to be promoted, an employee must show they are meeting the competency requirements for quality. It is constantly looking for better tools and techniques that will make it a world leader, moving away from its current emphasis on low-cost production.
Huawei's rapid economic growth parallels the company's desire to be the world leader, and Huawei is now in the midst of understanding the critical role that quality processes play in its future expansion. The company places a strong focus on measurements, tools, and methods to enforce strict quality control of production processes. Its management systems are based on accepted worldwide processes and standards and are applied across all of Huawei's product lines in design, development, manufacturing, sales, installation, and service. Huawei also has a complete end-to-end integrated product development process that was implemented with the support of IBM in early 1998. In 2002, Huawei started Six Sigma quality initiatives in its manufacturing center and migrated them into R D product lines. A Six Sigma steering committee oversees the deployment and reviews and approves projects to ensure they meet the launch criteria and resources are available to support the teams.
The QuEST Forum is a unique collaboration of telecommunications service providers and suppliers dedicated to telecom supply chain quality and performance. The Forum supports its member organizations to pursue performance excellence through implementing a common quality standard, emphasizing industry best practices and delivering a benchmarking measurement system. There are 11 benchmark measurements, including number of problem reports, problem report fix response time, on-time delivery, network element impact outage measurement, and field replacement unit returns. Huawei recently launched an initiative in partnership with the QuEST Forum's integrated global quality workgroup. The goal is to set up a benchmark study team to better understand causes of variability in the benchmark data and raise industry performance.
The benchmark data are a critical component of Huawei's quality management system and are integrated into top management's personal business commitments and the executive management team balanced scorecard. The balanced scorecard measures four key areas in corporation health: financial and profit, customer and quality, growth and learning, and internal business performance. The report cards and quality metrics are linked to both the executives' performance reviews and bonuses.
Huawei Technologies is just one example of the progress that Chinese companies have made in quality. Today, its automobile industry is beginning to distribute in the United States and in Europe. The government has embarked on a nation-wide program to improve product quality and safety throughout the supply chain that includes a safety tracking and accountability system and a national product quality-monitoring network. However, the nation is not without its obstacles. For example, Chinese automobile manufacturers have seen a significant decline in their home market share, which some attribute to poor quality relative to their competitors. The continued rapid growth of the Chinese economy is threatened by infrastructure limitations, pollution, logistical bottlenecks, a young banking system, and the imbalance between male and female births. Also, China cannot continue progressing by copying foreign technologies forever. China might need another decade to overcome a long list of quality manufacturing problems, such as weak design, before its companies can compete with those in Japan and America.
A research project conducted by China Crosby Management Institute and Peking University's Quality Competitiveness Research Center that assessed the maturity of quality management of Chinese enterprises concluded that, in general, the overall quality mindset in China compares to that in Europe and the United States in the 1980s. Current problems stem from a lack of common quality values, organizational barriers and silos, poor implementation, lack of employee engagement and motivation, subservience of quality to delivery and cost objectives, and a focus on reaction rather than prevention.
What opportunities does China have to learn from the progress made in quality in Japan and the West over the past half-century?