Quality cycles

Abstract

A “quality cycle” is defined as an apparently self-regenerating fluctuation in the quality of manufactured products. Quality cycles have often been observed in organizations that mass produce complex products using labor intensive manufacturing processes. Based on the policies and practices observed in several large high-tech manufacturing firms, a closed-loop dynamic feedback model was developed to trace out systemic sources of such fluctuations. It represents three primary paths of information flow that 1) are present in most organizations, and 2) can influence line managers to relax quality standards to achieve goals for unit production costs and output rate. Simulation analysis of the model demonstrates that such a trade-off causes the three loops to interact to generate “quality cycles” that are not related to external pressures or product design cycles. The model articulates a clear linkage between the relaxation of product quality standards and fluctuating production rates, product reputation in the marketplace and profitability.