Why Quality Matters

Option 1

There are a number of resources for both industry professionals and consumers that analyze and publish quality metrics. Examples include: Hospital Compare – published through Medicare.gov, J.D. Power – well known for its car reviews, and Quality Magazine and Quality Digest are two resources used by OM professionals.

• Locate and post a link to a quality review resource that is used in your industry (select one that is different from what has already been posted by your peers).
• What information do these resources provide about how they collect and analyze data, and develop reports and (if applicable) rankings?
• Which metrics are most frequently used in assessing quality failures and the impact these failures have on costs?
• How can this resource be used by OM professionals to support quality improvement initiatives?

OR

Option 2

Quality failures have impacts that go beyond costs. Quality failures can erode an organization’s competitive advantage.

Locate and post a news story from the last six months published in The Wall Street Journal or other reputable source about an internal or external quality failure.

• Briefly summarize the issue including what went wrong and whether it was a performance quality or conformance quality issue.
• What was the impact on costs to the organization and/or its customers?
• How did the organization address the issue?  What steps did they take to either correct the problem or provide a resolution to customers?  Were these reasonable and fair? Explain.
• What steps could have been taken to reduce or prevent this failure?

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.​

1st person to respond to

Faith

https://www.wsj.com/articles/alzheimers-drug-from-roche-fails-in-late-stage-trials-11668425663?st=0sam58l4y9gehj9&reflink=desktopwebshare_permalink

Hello Professor and class I chose the article above for my discussion question. The company was working with an experimental drug for Roche that was supposed to decrease Alzheimer’s.  The drug, called gantenerumab, slightly reduced cognitive decline in people with early Alzheimer’s. The trials, which lasted more than two years and involved nearly 2,000 participants, compared scores of cognitions and function in areas such as memory, orientation and problem-solving. I one of the trials completed it cognitive function only declined by 8% and the other trial was only by 6%. The cost of this drug failure was great disappointment. The drug that was tested was the first drug to be approved for Alzheimer’s in almost two decades. With the failure of this experiment, they are ending the trials testing gantenerumab in the early Alzheimer’s population. They address the issue by stopping the experiment on this drug. The scientist has gone back to the drawing board to try and figure out a different approach.  I think it was a reasonable decision to stop the experiment. If they see that they were not getting the results they were intended. There was no need to continue on with the people taking the medications if they were not helping them. I do not think anymore steps could be taken that were different. I do not think they tried to hide anything and was upfront with the ones that were taking the drug. I like how they pulled the plug on it when the results were not there.  Like Mr. Jack Welch said, “In the end, what you’re trying to get to are processes that operate more efficiently.” (Jack Welch)

https://www.wsj.com/articles/alzheimers-drug-from-roche-fails-in-late-stage-trials-11668425663?st=0sam58l4y9gehj9&reflink=desktopwebshare_permalink

JWI 550: Operational Excellence Week Seven Lecture Notes

2d person to respond to

RE: Week 7 DiscussionCOLLAPSE

Good Evening Professor & Classmates,

Option 2: Locate and post a new story from the last six months published in The Wall Street Journal or other reputable source about an internal or external quality failure.

Briefly summarize the issue including what went wrong and whether it was a performance quality or conformance quality issue.

• For this week’s DQ, I’ve chosen the following Wall Street Journal article: At Ford, Quality is Now Problem 1 by Nora Eckert. Ford over the last few years has been struggling to improve their quality record. In the first seven months of the year, Ford had 46 separate safety recalls on 6.8 million vehicles, more than any other U.S. auto maker (1). Josh Halliburton, who came from the auto research firm J.D. Power was brought on to improve production quality and how they identify issues. With new strategies in place, he expects Ford’s warranty problems to improve next year, but it may take two to three years to see the most impactful results (1).
• This would be a conformance quality issue. Conformance quality is a product or service that functions as it was designed. When it lacks conformance, quality failure and customer dissatisfaction occur (2).  

What was the impact on costs to the organization and/or its customers?

• These quality issues have impacted Ford significantly over the last few years. Last year Ford set aside more than $4 billion for warranty costs, up 76% from five years earlier. Its total warranty expenses increased about 17% from 2016 to 2021. In 2021, Ford allocated $1,041 per vehicle for covering warranty claims compared with $713 per vehicle for larger rival General Motors Co (1).  

How did the organization address the issue? What steps did they take to either correct the problem or provide a resolution to customers? Were these reasonable and fair? Explain.

• As you can read from above, this is not an issue that’s going to be resolved overnight, but there are plans in action to help correct the issues. With Halliburton’s experience with J.D. Power where he assisted with improvements in more than 100 factories around the world, he was set to make changes fast for Ford. For example, he has identified that Ford had too many last-minute design and engineering changes ahead of a new-vehicle launch, increasing the risk of problems down the line (1). Additionally, he is changing how Ford tests its products by installing video cameras to monitor early build, before production, to see if there is anything they can eliminate or simplify. From a customer standpoint, they are paying close attention to problems or complaints from customers on social media. These are good steps to take as a company and with Halliburton’s expertise, I think it will make a big impact. I can’t speak for any Ford owners, but I can only imagine how much time is wasted with recalls like this, but if Ford has the strategy to take care of the expenses, I think it’s reasonable and fair.

What steps could have been taken to reduce or prevent this failure?

• I think Ford was way too ambitious with competition, especially in the electric-vehicle space. The billions of dollars Ford spends each year on warranty repairs and recalls make it more difficult to reach its goal of shaving $3 billion in annual costs by 2026 and free up spending for new electric-vehicle models, battery plants and manufacturing plants (1). I think what Ford is doing with the leadership change in operations will help put Ford in the right direction with new and improved strategies.

-J.J.

References

1. Eckert, Nora. Aug 6 2022. At Ford, Quality Is Now Problem 1. WSJ. https://www.wsj.com/articles/at-ford-quality-is-now-problem-1-11659758404?page=1
2. JWI 550. Lectures Notes. Week 7