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Many U.S. manufacturers not in crisis mode in slumping economy


February 2, 2009
By Alyssa Dalton


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MILWAUKEE, Wis. – It’s easy to assume that when the economy is in a recession, businesses will make major cutbacks in order to survive. However, according to ASQ’s (American Society for Quality) latest Quarterly Quality Report, many manufacturing companies in the United States are not in the crisis mode one would expect.

ASQ talked with its members to gain insight on the issue from
practicing quality professionals. The feedback received clearly showed
some of the expected pain companies are going through, such as
reductions in work force, reductions in training and budgetary cutbacks
for quality initiatives.   

However, not all share that view. The results displayed two very
different types of organizations reacting in fundamentally different
ways to eroding economic conditions. On the one hand are those going
into crisis mode, cutting back and de-emphasizing quality initiatives.
On the other hand are those that continue to invest in quality and
innovation as a competitive advantage in the face of economic
uncertainty.

It’s a business dilemma that affects many other functions besides
quality: To cut back or to forge ahead when the going gets tough?
Organizations that refuse to panic, that move ahead with new
initiatives, and that don’t cut too deeply will be better positioned to
excel when the economy rebounds, according to ASQ..

"The really good news, if there is a silver lining in these times, is
that while some companies are shrinking back into their shell, other
organizations are moving decidedly in a forward-looking direction, and
keeping quality practices at the top of the list," said Ken Case, ASQ
past president and emeritus professor at Oklahoma State University.

Those members who felt their organization’s viability is different
today than a year ago and attributed it to the deteriorating economy
were the ones who were much more likely to report reductions in work
force, less training and overall culture changes when it comes to
business improvement where they work. Many were even backing away from
quality initiatives that organizations typically use to cut costs.

In between the two obvious extremes is the middle ground of
organizations that are attempting to balance efficiency with innovation
and growth. Members said that waste reduction and increased efficiency
are receiving a considerable amount of increased attention. Also
garnering more attention are efforts to generate inspiration and new
ideas. Members state that they are listening to the voice of the
customer more and are more engaged in programs to bolster innovation
and creativity. Innovation, creativity and quality initiatives are key
for organizations looking for continued growth.

Overall, many members felt their companies and the management at their
companies were looking forward and using quality for long-term
strategies. The results presented are an indication of what many
manufacturers may also be experiencing.    

The full Quality Report can be read at http www.asq.org/quality-report/reports/200901.html.