Panic can be a powerful motivator. And so it was in the mid-1980s as U.S. Commerce Secretary Malcolm Baldrige surveyed the quality of American manufacturing versus a growing list of, then, quality Japanese competitors. Business as usual would no longer keep America's economic engine humming in the face of fierce global competition. The quality program Secretary Baldrige envisioned was given his name with the passage of the Malcolm Baldrige National Quality Improvement Act of 1987.
Since then, the Baldrige Performance Excellence Program, run by the Commerce Department and the National Institute of Standards, has become the world standard in quality improvement. The criteria for the Malcolm Baldrige National Quality Award are easy to download but challenging to meet. The process requires tough self-assessment and probing site visits from external Baldrige examiners.
Rose Almon-Martin knows. The vice president of Performance Excellence and Brand for MEDRAD, Inc. of Warrendale, Pennsylvania has been through it twice. The market-leading medical equipment manufacturer won the Baldrige Award in 2003 - then again in 2010, only the fifth company to win twice.
"I think the first reward you get from Baldrige is the improved performance," says Almon-Martin. "Certainly, you can use a lot of other tools to improve performance, but Baldrige forces you to look at your processes in terms of how they reinforce each other, so the improvement is sustained over time." And those external examiners "get to those blind spots," she says, that are often missed in a self-assessment.
Almon-Martin likens the resources spent on Baldrige to doing maintenance on the physical plant. "It's not extra. It's part of how we do things. What Baldrige does is keep you constantly improving the intangible assets. Since we started using the criteria back in the early `90s, we have doubled our revenue per employee."
Creating an Innovative Culture
Reputation management expert, Andy Tannen, writing recently in IndustryWeek, laments the fact that the business press, not to mention the mainstream media, pays little to no attention to what amounts to the Oscars for business. The president of the United States, after all, hands out the Baldrige trophies. The sparse coverage, he believes, means companies may also forget about the Baldrige process, to their detriment, he says. Quality lapses, the kind Baldrige is designed to prevent, can be hugely expensive for companies. Tannen cites recent recalls by Toyota and Johnson and Johnson where the recall itself is costly, but the loss of market share and reputation is incalculable.
For Eric Franks, the manager of Technology and Quality Assurance at PRO-TEC Coating Company in Leipsic, Ohio, winning the Baldrige Award in 2007 was an honor, but Franks says the real value was in creating an innovative culture. The Baldrige program allows PRO-TEC to anticipate customer requirements like new steel types to meet tougher automotive standards.
"Baldrige helps us drive innovation and incorporate new processes so we can be first to market on these products," says Franks. And in today's just-in-time manufacturing environment, being ahead of the curve can mean the difference between surviving - or not.
More than just a prize and related conference, Baldrige is a journey for those using the criteria; a pathway that leads to improved innovation - the very thing American industry needs in a global market of low-cost competitors.