Once upon a time, I was called in to a local company to discuss their quality problem. They had been selling water treatment devices into Japan for more than three years, with no complaints.
They were very proud of these sales; not every American firm had the product quality and performance to sell in Japan. Now, however, their agent in Japan reported that the major purchaser had done a complete tear-down inspection on 15 units, out of a shipment of 600, and found that four of the 15 were missing a stop valve ball.
What did the company plan to do to correct the problem on this shipment and any future shipments?
I was told that the missing part was only needed once a year when the device was flushed. Why had the customer inspected new units? The customer had not given any complaints for the last three years; why were they concerned now?
It developed that the missing part had been changed to a darker color, so the assembly operators no longer noticed when it was missing. The marketing people would not budge on the new color, so one question would be how to assure that the operators assembled the units correctly.
I knew that an inspection of 15 units out of 600 qualifies as a “falling out of bed” test.
The sample size and method is only large enough to determine flaws that are obvious; it can detect if you fell out of bed or not. If a customer is using this method of inspection after three years, it suggests that they still don’t trust the supplier very well. Clearly, that mistrust was warranted in this case. The supplier did not assemble their own product correctly over one-fourth of the time, and didn’t know it until a customer told them.
As if to confirm my fears about the company’s attitude toward its product reliability, a side discussion revealed that American distributors always scheduled a call back for each installation of this firm’s water treatment devices, while European competitors’ units did not get, or need, that care. This fact was dismissed; it was not considered a contributing factor to a long term sales decline.
A CEO friend calls this whole situation a “self-correcting problem.” In due course, customers will find other suppliers with more reliable, functioning products. The real question is, how far can a firm ignore the warning signs before it is sold to a far away place, or simply withers away? Any way it goes, it will take down jobs and business activity with it, not to mention the collective creative spark that generates new patents and innovative products, which this company had a lot of in the years before I met them.
Today we hear about the possibility that Milwaukee could become a center for “water technology,” meaning the treatment, handling, and distribution of clean water, plus the cleanup of “used” and contaminated water.
My experience with this company that was in the midst of this industry tells me that in addition to developing superior ways to treat and handle water, those firms need to learn or remember certain business basics. Namely, how to reliably manufacture their own designs, how to assure themselves that the finished product does what they claim and how to respond, reactively and proactively, to clear examples of performance failings.
Of course, you say. Everyone must do that. As for the company I mentioned earlier?
It’s been sold twice since then. The brand name still exists, but the company’s web site doesn’t mention any new patents, despite their historical track record. And I wonder if they still tell themselves that distributor call-back frequencies are unimportant details.
Jay Warner is the principal scientist at Warner Consulting Inc. in Racine.
