Baldrige Award Spurs Corporate Excellence

THIS year 700 executives from 90 companies came on 59 visitor days to learn about Westinghouse Electric Corporation's total quality improvement process. James A. Fici, manager of total quality planning at Westinghouse's Commercial Nuclear Fuel Division, handled 450 direct inquiries on the topic, addressed 17 quality conferences, and visited 13 companies. ``There's almost been a revolution'' in the attention United States companies pay to the process of quality improvement, Mr. Fici (fee-chee) says. He gives the Malcolm Baldrige National Quality Award much of the credit.

Created in 1987 and named for the late secretary of commerce, the award has the threefold aim of promoting quality awareness, recognizing quality achievements of US businesses, and publicizing successful quality strategies.

Exacting standards, few winners

So exacting are the standards of competition that of the 65,000 firms requesting the contest guidelines, only 66 entered in 1988, the award's first year, and only 40 in 1989. Three winners were chosen the first time around and two the second, out of a possible six prizes each year.

The discrepancy between applications sent out and applications received back doesn't disturb Curt W. Reimann, director of the Baldrige award program at the Department of Commerce's National Institute of Standards and Technology.

After looking at the standards and seeing how few winners have been named, companies have gotten the message, he says. Instead of rushing to enter, Reimann says, many have told him that they are taking steps to improve their quality management systems so that they can apply in 1992 or 1993.

``It's not something you're going to bluff your way through by any stretch of the imagination,'' says Westinghouse's Fici, whose division was one of 1988's winners.

But the distinction of winning is not what the competition's designer and winners say really draws the contestants. Rather, companies which have relied on internal criteria to measure their quality performance are using the contest as an external gauge.

``Ninety percent of the value of entering would be learning.... We wanted an evaluation from an objective party ... so we could improve,'' says Norman E. Rickard, corporate vice president of quality at Xerox Corporation, which first instituted a corporate-wide quality program in 1981 and founded its ``Leadership Through Quality'' program in 1983. Xerox's Business and Product Systems division (the bulk of the company, employing 100,000 of Xerox's workforce of 110,000 worldwide) was one of this year's National Quality Award winners.

The first part of the competition is to complete an application detailing how a company performs on seven criteria most likely to bring about excellence, Reimann says. These are broken down into 44 subcategories with 192 areas to address.

``We had to do a lot of organizing just to prepare an application,'' Fici says. He estimates that Westinghouse employees spent one man-year on the task.

The application is graded on a 1,000-point scale. Reimann says any company could be proud of scoring 500, and with a 700 or higher would make the finals. The handful of finalists are then visited by a team of quality inspectors, who verify what is in the application.

``The examiners can go anywhere in the company they want and talk to anyone they want,'' Mr. Rickard says. In Xerox's case, five examiners spent three days at company sites in Monroe County, N.Y.; Denver; and El Segundo, Calif.

Fici says the examiners conducted ``random interviews'' with 225 Westinghouse employees at all three of the Commercial Nuclear Fuel Division's sites. ``They're probing to see if continuous improvement is part of your culture.'' The examiners' ``penetrating and deep questions'' gave the company a feel for its strengths and weaknesses.

Weak on ``management by fact''

Reimann has found US manufacturers to be particularly weak in ``information and analysis,'' also called ``management by fact.'' This criterion concerns the scope, validity, use, and management of data and information that underlie a company's total-quality system. ``Even though we have extensive data-gathering on our customers, we could do more,'' Rickard says. Xerox learned from the contest process.

He adds: ``When we put ourselves under the microscope, we found things to improve'' in all seven areas, even though the company won.

Westinghouse, Xerox, and the other winners (Globe Metallurgical Inc. and Motorola Inc. in 1988, Milliken & Company in 1989), are actively publicizing their quality strategies.

Interest in quality, Reimann says, ``is not even close to having peaked yet.'' One reason may be what improving quality does for the bottom line.

Westinghouse's Commercial Nuclear Fuel Division, which has four domestic competitors, dominates the US market with a 40 percent share. It supplies 20 percent of the free-world market, Fici says.

1987 was a record year for the division in new orders from customers. 1988 was nearly the same, and this year has the potential to break 1987's record, Fici says.

As for Xerox, ``We're the only occidental company that has been targeted by `Japan Inc.' that has regained market share without tariffs or protective legislation,'' Rickard says.