Quality Centered on Value Reform

By Lee Gye-hyung, President of Korea Standards Association

Lately, many voices claim that our economy is in difficulties. Signs for the rebound of domestic economy are sluggish and the anguish of merchants and small businessmen has been rising. Large business firms prefer to invest in foreign countries, while foreign direct investment has been in the doldrums. College grads who should enter society full of dreams have to stay on campus for a second chance to pass employment tests.
Problems for our economy are worsened trade conditions, high oil prices and deepening gap between rich and poor. Although our foreign trade reached the level of $500 billion, the people can't feel that they are better off because of the worsening trade conditions.
Our cost structure is weak because of high land prices, high wages and high import prices of production facilities and raw materials. The deepening gap between large firms and small firms, export firms and domestic firms and manufacturers and service firms has been eroding the middle class made up of salary men and small business owners.
The solution for these woes appears to be the quality with no alternative in sight. We have to return to basics when work becomes complex and difficult. We have to take care of the worsened trade conditions with high-quality goods. We have to take care of high cost problems with the waste elimination system better than Toyota?. We have to make domestic manufacturers and service firms to be more competitive through customer satisfaction management.
Despite those trade woes, when you take a look at the cases of successful firms, you will find that the cause has been their management centered on the quality of their products. Korean cars are no longer considered cheap, winning good points in quality evaluations made in foreign countries and Korean cellular phones have been dominating the high-quality mobile phone market in the world. Orders keep coming in to Korean shipyards due to their shipbuilding skills with high quality. Such traditional products as steel and petrochemicals have been in overwhelming demand overseas, along with electronics and machinery because of the good quality.
When you take a close look at the framework of quality management of those world-leading firms, you will soon learn that value innovation is located at the center. Some of those firms have a value innovation center at the core of their organizations with some of them learning the value of system quality early. Some of them even trained their officers and staff to have minds for quality early in their careers.
Customers determine value. A company's success would be guaranteed when customers are more than happy with goods and services they paid for. A commodity that had been categorized as a luxury good in the development stage has turned out to be a famous brand product and become a favorable export good. The costs for brand and design have been taking a bigger share of the total costs.
With consumers'concern becoming a social value, management of environment, ethics, and social responsibility have become important factors in the quality of products. A revolutionary improvement in customer value can be achieved with delicate quality program. Professor Kim Wui-chan turned it into a system called, "blue ocean strategy"and its been used a textbook for corporate reform. Value reform is at the center of the "3rd Generation Six Sigma"prototype announced by Michael Harry this year in Seoul.
This year, too, business firms and individuals will be presented with the national quality awards after analyzing the quality management results. The quality management award screening will be based on value reform. Also important are leadership, strategy, customer satisfaction, attention on market, manpower training, information system, and process, etc., and all key aspects of management. This screening standard has become a strategic target of business firms. I expect our national quality award system will pave the way for us to become an economic powerhouse as the Reaganomics led the economic recovery taking into good use the national quality award in the United States.
The quality based on value reform can solve all problems. Customers'not spending money causes the sluggish domestic economy because they don't have any valuable things to spend their money on. Investors have not been making investments in projects that can create new values. Restrictions in investment will lead to the reduction for jobs for highly educated young workers.
Mutual development for large and small business firms can be achieved with cooperative production based on trust in quality and customer quality. Management of brand, environment, ethics, social responsibility and customer satisfaction, among others, should be resolved with the creation of customer value backed up by excellence in quality. Trade conditions getting worse all the time can also be solved with value reform.
Overcoming a powerful challenge from China, and the rising waves of competition in global trade can also be solved with the products with high quality that can withstand global competition.
Quality management can be compared to a large duffle bag woven with management philosophies. It is realizing balanced management indicators, scientific management, value reform, production reform through continuous innovation, and importance on management, customer priority, under every one participating.
Quality management has every thing that our economy needs to grow with. Having such quality management spread widely in our industry and settled is the gateway for becoming an economic powerhouse for our country. nw