Disillusionment with Naos
Growing Disillusionment with NAOs?
In the past three decades or so, Western manufacturers have pursued world-class manufacturing status through a shotgun blast of three-letter acronyms: TQM (total quality management), JIT (just-in-time production), DFM (design for manufacturability), QFD (quality function deployment), QPD (quick product/process development), CIM (computer integrated manufacturing), ERP (enterprise resource planning), SCM (supply chain management), CRM (customer relationship management), and so on. The power of these NAOs (new approaches to operations) in improving quality, production scheduling, product development, supplier management, etc. has been forcefully demonstrated in a number of leading companies such as AT&T, Hewlett-Packard, Motorola, Xerox, etc. leading thousands of others to strive to emulate them and their Japanese role models.
Despite many remarkable successes, depicted in glowing accounts in the business media, a number of subsequent studies revealed a disturbing pattern of failure. Even efforts initially labeled as “successes” often turned out to so only up to a point – after which, improvements stagnated or even regressed. For example, the Big Three automakers as a whole had quality records that were below the average, and they were losing market share in all vehicle categories. The conclusion of most large studies has been that only a third of the companies that attempted to implement the most popular NAOs achieved the results expected – by the companies’ own admissions. In the few studies that asked customers and suppliers, rather than the companies themselves, to evaluate the overall effectiveness of such programs, the success rate was even lower. For example, an extensive study of 584 companies in Canada, Europe, Japan, and the US conducted jointly by Ernst & Young and the American Quality Foundation found that most TQM programs had achieved “shoddy” results. Other studies suggested that only a third or less of
In the past three decades or so, Western manufacturers have pursued world-class manufacturing status through a shotgun blast of three-letter acronyms: TQM (total quality management), JIT (just-in-time production), DFM (design for manufacturability), QFD (quality function deployment), QPD (quick product/process development), CIM (computer integrated manufacturing), ERP (enterprise resource planning), SCM (supply chain management), CRM (customer relationship management), and so on. The power of these NAOs (new approaches to operations) in improving quality, production scheduling, product development, supplier management, etc. has been forcefully demonstrated in a number of leading companies such as AT&T, Hewlett-Packard, Motorola, Xerox, etc. leading thousands of others to strive to emulate them and their Japanese role models.
Despite many remarkable successes, depicted in glowing accounts in the business media, a number of subsequent studies revealed a disturbing pattern of failure. Even efforts initially labeled as “successes” often turned out to so only up to a point – after which, improvements stagnated or even regressed. For example, the Big Three automakers as a whole had quality records that were below the average, and they were losing market share in all vehicle categories. The conclusion of most large studies has been that only a third of the companies that attempted to implement the most popular NAOs achieved the results expected – by the companies’ own admissions. In the few studies that asked customers and suppliers, rather than the companies themselves, to evaluate the overall effectiveness of such programs, the success rate was even lower. For example, an extensive study of 584 companies in Canada, Europe, Japan, and the US conducted jointly by Ernst & Young and the American Quality Foundation found that most TQM programs had achieved “shoddy” results. Other studies suggested that only a third or less of