Cross-functional Management, TQC, and QCD

Practitioners of TQC (Total Quality Control) believe that QCD are the superordinate goals of management. If management fails to establish a system to realize QCD, several results are inevitable: The company will be left behind by the competition because of inferior quality; it will find profits eroded by higher costs; and it will be unable to deliver products on time to their customers.

Therefore, it is much smarter to approach management's mission as to improve QCD in order to satisfy customers, rather than to look upon management's role only in the context of making more profits to pay dividends to stockholders. Once QCD is achieved, it is automatic that greater profits will be realized. Another important aspect of QCD is that it is mostly cross-functional. To put it another way, no single department can realize the goals of QCD on its own.

One example is the case for "Quality." Quality-related problems encountered in the workshop are often traced back to inadequate design functions. This often happens because there are no systematic efforts to facilitate communication between the design and production staffs. It is essential for the engineers to understand the requirements of the production floor before they begin designing new products. Although both the design and production staff may be trying to do their best, the results will be unsatisfactory, yielding poor quality of products, since the design requirements do not meet production capabilities.

Another example is a new product which incorporates some "unique" features. What if such features are not what the customer is looking for? In this case, the customer is obliged to pay higher prices for a product that offers features exceeding their requirements. This happens due to inadequate communication between sales and marketing departments that are closest to the customers; and the engineering/design units that must incorporate customer requirements within the design parameters.

In recent years, Japanese management has recognized the indispensable value of cross-functional management. A popular catch phrase used by Japanese executives competing for the Deming Prize is: "Let's break down departmental barriers!" These executives have learned that many serious management problems have occurred because of departmental barriers. Cross-functional management offers a solution, but can be achieved only by establishing a better system to govern the activities of participating departments. Whenever interdepartmental conflicts arise in a company where there is no system for cross-functional management, the department that has the louder voice usually wins the argument. Often this happens regardless of the impact such a decision may have on company-wide performance. Shoji Nogawa, former president of Komatsu, says that building a system for cross-functional management is the responsibility of top management. If each department acts independently, then there is no need for the company to have a president. Since no one department manager has authority over another, conflicts can only be resolved by their superiors. If this process is repeated upward, it ultimately reaches top management - the entity responsible for building a cross-functional system of QCD.

Japanese companies active in TQC have well-documented systems diagrams for such items as quality assurance and cost. They also have systems diagrams for new product development and claims handling. In all these activities, interdepartmental coordination and cooperation are the key. In the case of a systems diagram for quality assurance, for instance, the sequence of product development, production, sales and after-service is listed on the vertical side and various departments involved are listed on the horizontal side. By following the diagram, it becomes clear that certain kinds of activities and communications efforts must take place between various departments concerned at any particular stage.

A starting point for improvement in a company is to recognize that there are cross-functional problems. In too many companies, management is unaware of such problems and therefore they deal with them through conflict-resolution or adjustments of self-interest. Recognition should lead to actions. Although top management should take such initiatives, many now turn to Kaizen methods to show them the way.