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INSIDE CI: A Profitable Strategy

February 1, 2004
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If your company is like many organizations, profitability is the single most important focus of your day-to-day operations. Virtually every purchasing, hiring and investment decision is made based on bottom-line returns. If your material supplier increases the prices of your raw materials, it's time to switch suppliers. If your employees can't keep up with increasing workloads, they should be skipping their vacation time and putting in more hours on the job-or better yet, perhaps the work should be outsourced to another country for a much lower rate of pay. If your equipment is experiencing increasing downtime due to mechanical failures, your maintenance staff should be able to figure out how to put a bigger bandage on the problem. Unfortunately, these are not sound strategies that will increase the strength of your company over the long term.

For public companies, which come under shareholder scrutiny every quarter, the pressure to perform is even greater. Shortsighted decisions that produce strong quarterly statements are rewarded with higher stock value, while visionary strategies that require near-term losses to implement are often penalized by the marketplace.

Profitability is certainly important-there's no question that a company that continues to be unprofitable quarter after quarter, and year after year, will eventually be forced to close its doors. But profits should be a byproduct of a well-run, quality-driven organization, rather than the primary target. According to Harry Hertz, director of the National Institute of Standards and Technology (NIST) Baldrige National Quality Program (BNQP), "Businesses that excel in everything they do can achieve success in many areas, including the bottom line."*

A focus on quality is, of course, as basic as ensuring the quality of each stage of the production process. For instance, using accurate instrumentation to measure the particle size of your ceramic powders can help ensure high-quality finished components-thereby reducing waste and increasing customer satisfaction. (See http://www.ceramicindustry.com/CDA/ArticleInformation/coverstory/BNPCoverStoryItem/0,2708,118092,00.html, as well as the online exclusive, "Measuring Particles with Laser Diffraction," at http://www.ceramicindustry.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2710,118074,00.html) Likewise, obtaining accurate measurements of properties such as thermal expansion, density change, phase transitions, specific heat, thermal diffusivity and thermal conductivity throughout the sintering process can help manufacturers of silicon nitride ceramics adjust their processes to maximize product quality. (See http://www.ceramicindustry.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2710,118112,00.html.)

However, according to the BNQP, quality should also encompass much broader aspects of your organization, including visionary leadership, customer-driven excellence, continuous organizational and personal learning, valuing employees and partners, agility, innovation, a focus on the future, performance tracking and analysis, social responsibility, a focus on results and creating value, and a solid framework that will enable you to achieve results. In other words, short-term solutions need not apply.

Want to increase your company's profitability? Focus on quality. You might be surprised at how profitable your enterprise can become.

P.S. If you've increased quality, streamlined productivity and are still struggling to compete in the global marketplace, be sure to participate in our interactive discussion on "free trade." Click here http://www.ceramicindustry.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2710,115622,00.html to read the column and share your thoughts with other readers online.

*For more information about the Baldridge National Quality Program, visit http://www.baldrige.nist.gov.

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