How to salvage 'Made in USA'

Scolding American business for poor-quality products is almost as popular these days as crying over spilled productivity. Turn on the news or read a paper or magazine, and you're likely to see stories playing variations on the theme of "Made in USA Stinks!"

Why? Because it's chic. Because it's easy to generalize from a relatively few notorious examples. And, sadly, because there's a lot of truth in the charge.

To turn out quality products, a manager must convince the company that quality isn't merely important -- but crucial.

American businessmen who are tired of sneers about US automobiles, appliances , or steel can take the first step by defining what the word quality actually means. not to scholars, journalists, or politicians -- but to each of our individual businesses.

The one reliable place a businessman can discover an exact and concrete definition of quality is from his paying customers. And they won't define quality -- but its absence.

My working thesis for product quality is simple: quality is acceptance. Rejection -- for whatever reason -- means our quality doesn't measure up.

With this definition, we don't "improve" quality -- we prevent rejections. Either our product has quality or it doesn't. When we have a quality product, we don't have customer rejections. This is where good managers are winnowed from indifferent ones.

A good manager's first step to cure customer rejections is to internalize the problem. When a product unit doesn't meet a customer's specifications, we must reject it first ourselves. This makes customers happy but distresses accountants because it is so expensive. And here is where the real art of good management enters the quality picture.

A good manager finds out where in the production process a product strayed, and why. Then the challenge is to prevent that particular problem from occurring again.

In my business, thousands of different steel products must be cooked, kneaded , and shaped, then sliced or glazed and packaged for delivery. Many steps take place, each requiring gigantic equipment and precise attention to customer requirements. Immense amounts of money are invested in each order, so preventing rejections can literally be the difference between profit and loss.

Part of my company's effort to curb rejections borrows heavily from a lesson and a method we learned about safety, back about 1910. Just like quality, safety is crucial and its absence is expensive. And just like quality, safety is an abstraction. People have no burning commitment to improve safety.

But we all can become intensely interested in learning how to keep from getting hurt. So my company learned to ignore the idea of safety and embrace the idea of preventing injuries and accidents. We've been an acknowledged leader in safety ever since. And our method of isolating each steel mill step, to discover where and why each accident occurs, is the same philosophy we need to apply more thoroughly to curbing rejections.

The steel business has another edge going for it in quality improvement: technological innovation. The payoff for continuous casting technology is immense, for instance. An important and measurable additional value of continuous casting is its reduction in the rejection rate of the steel produced. Like many US steelmakers, Armco is adopting continuous casters as quickly as we can afford these expensive but valuable facilities.

But even with the boost in quality innovative technology often brings, the fight against rejections will finally be won or lost among the people involved in making products. They must want to avoid rejections or the rate won't drop. And that is our real managerial battleground: the hearts and minds of the people who do the actual work. Americans, by and large, love to do a fine job and feel guilty and angry when we don't.

Turning that abstraction into concrete steps we can all perform will be tough. It strikes to the root of management practice and philosophy.

Over and above cash bonuses for reducing rejections, over and above "quality circles" and suggestion programs, over and above all the other specific proposals for gaining bottom-up, participative management -- the most important idea any manager can instill, or renew, in employees is th e certainty that company and workers are partners in a crusade whose result is immediate mutual benefit to all involved.