Winnipeg Free Press - PRINT EDITION

Products get better, services get worse

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CALGARY -- Remember when getting a 160,000 kilometres out of your car was considered a miracle? The owner instantly became one of those who "really know their cars." Of course, knowing had nothing to do with it. Lemons were the norm and avoiding them was like winning the lottery.

I sold my last car somewhere over 400,000 kilometres. OK, I'm unusual, but the fact is, no one is excited by 160,000 klicks anymore. Cars are built better than they used to be. So are most engineered products. The airplanes I travel in now are better than the planes I was riding in 40 years ago. But what about airline services? Is booking a flight easier, or harder?

What about services generally? Do you spend more time waiting in line? Is the service staff friendlier? Do helplines and service centres provide help or service? What about government services -- better or worse? Dumb question.

Why have products improved even as services declined? Because prior to the 1980s, for example, the specified diameter of a drive shaft might have been 3.5 inches. But because nothing could be made to perfection, engineers would say 3.5 inches plus or minus 0.1 inch. A drive shaft of 3.4 to 3.6 inches, therefore, was considered 'good enough.' When all this 'good enough' was tolerated in 30,000 parts, you had a car that would shake, rattle and barely roll after 45,000 kilometres.

Enter a diminutive man with a funny name -- Genichi Taguchi. He refused to accept good enough. Specifications and tolerances were tossed and replaced with 'loss functions.' These identified the loss to society for any variation from the ideal. Suddenly, engineers at Toyota had a way of determining the economic and social loss of producing drive shafts at anything other than precisely 3.5 inches. Perfection became the goal. Taguchi gave us a way of calculating the cost of falling short.

Replacing 'good enough' loss functions helped drive the "quality revolution." Japanese automobiles, once considered junk, became the icons of quality. American and European manufacturers followed suit, yielding massive improvements in build quality. Other industries adopted Taguchi methods, giving rise to "the new manufacturing."

But all this passed service industries by. Specifications or performance standards remain ubiquitous, guaranteeing, at best, stagnation in quality.

Consider an emergency medical services department with a performance standard of arriving within eight minutes of a call, 90 per cent of the time. What happens to EMS patients at eight minutes? Nothing. What about that 90 per cent, where did that come from? Picked out of thin air.

Performance standards like these have no rational basis, nor a connection to what matters to people. You're having a heart attack. Are you really thinking; "Gosh I hope they make it here in eight minutes nine times out of 10"? Or are you thinking "Damn, I hope they get here right now!"

An EMS organization, with a track record of arriving within eight minutes 90 per cent of the time and taking six hours for the remaining calls, is fully meeting their performance standard. No reason to improve despite the body count.

This is why service standards are really a means of avoiding accountability. They tolerate looseness, a characteristic of poorly managed operations, just as engineering specifications tolerated a looseness in manufacturing cars.

In spite of this, or perhaps because of it, performance standards are promoted as 'best practice' in the management of service industries. Health care is obsessed with them (ask any doctor or nurse). Governments are tripping over themselves defining them. Airlines, IT departments, repair services are committed to meeting them. All exercises in excusing poor performance. Taguchi would be rightly appalled. So should the rest of us.

Few on this side of the Pacific recognize his name, but Taguchi changed our world. Almost everything made is made better because of him. Sometimes the smallest of men are giants.

Genichi Taguchi died June 2, 2012.

Robert Gerst is a partner in charge of operational excellence, research and statistical methods at Converge Consulting Group Inc.

--Troy Media

Republished from the Winnipeg Free Press print edition July 25, 2012 A11

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