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Published: April 28, 2005

 
 

Beware Product Death Cycles

The quality wars were allegedly won in the 1980s. Why, then, are we again overwhelmed by junk?

How’s your “idiot light"?

That’s the light on your car dashboard that indicates a malfunction with the vehicle’s electronic sensors. It may also be a signal of the decline of product quality — not just in any particular car, but in manufacturing in general.

The light on my family car, a five-year-old European-made station wagon, flickered on for no apparent reason about a year ago — and stayed on. We kept bringing it to our dealer for repair. Each time, the car’s computer was checked, its switch was reset, and the light went off…before going back on again.

Finally I exploded in frustration: “I’ve brought this car back four times!”

“Four times?” said the dealer’s repair shop manager. “We’ve had customers bring theirs in ten times.”

Clearly, it takes a lot of fortitude to be a consumer these days. No doubt many consumers gained an expectation that product quality would naturally improve, year after year, during the late 1980s and early 1990s. This was the heyday of quality management, when Japanese-inspired continuous quality improvement was seen as essential to a manufactured product’s identity. But for the past decade or so, many corporations seem to have reverted to a more purely cost-based strategy, emphasizing short-term gains from the production of cheaply made, junky products. Kitchen appliances, power tools, cell phones, computer printers, DVD players, toys, and many other consumer goods are increasingly conceived and sold as disposable commodities. Although these products are constantly sugar-coated with more features and capabilities, their durability and longevity are rapidly dwindling.

As in the 1970s, this strategy poses serious dangers — from the erosion of well-established brands to the ultimate financial failure of companies. But it may be harder now to reverse the tide, because several trends in manufacturing and marketing subtly reinforce one another. Instead of facing competition from high-quality Japanese manufacturers, companies in industrialized countries face tough competition from low-wage countries and high price-cutting pressure from global retailers. Even when producers do promote quality, far fewer consumers seem to care. In this environment, many firms now seem to perceive the production of inferior products as an effective bottom-line strategy. But giving in to this increasingly irresistible temptation can put a company’s future market share and profits at risk.

Is product quality getting worse? It’s better than it was 30 years ago, by far — but it has been slipping backward ever since, say, 1993 (which happened to be the year that the preeminent quality advocate of American and Japanese business circles, W. Edwards Deming, passed away). The best empirical evidence of decline comes from the annual American Customer Satisfaction Index (ACSI), which is based on customer surveys and cosponsored by American Society for Quality and the University of Michigan. ACSI ratings of manufactured goods have basically held steady over time, but exceptional companies (notably Dell and Apple, with satisfaction increases of 9.7 percent since 1997 and 5.2 percent since 1994, respectively) skew the results. Other big-name companies show deterioration, including those that have invested millions of dollars in associating their brands with reliability and quality: Hewlett-Packard has dropped 9 percent in customer satisfaction since 1994, and several appliance manufacturers are down more than 4.5 percent. Even Six Sigma mainstay GE has slipped 2.5 percent. (A full table of this company data can be found at www.theacsi.org.)

Part of the reason for this serious dip in quality among American manufacturers lies in where they offshore factory operations and purchase components and parts. Chinese and other low-cost manufacturers have shown that you don’t have to offer quality to compete if you can slash prices enough. “I see no evidence of the managers and workers at these facilities having the slightest concept of quality,” says John Dowd, an American quality expert who has visited dozens of Chinese factories. “They will comply with customer requirements when they are monitored closely, but left alone, it’s strictly ‘Get it out the door.’”

 
 
 
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Resources

  1. Art Kleiner, “Beware the Product Death Cycle,” s+b, Spring 2005; Click here.
  2. David Neely and Kevin Dehoff, “Innovation’s New Performance Standard,” s+b Resilience Report, 03/15/04; Click here.
  3. Arthur M. Schneiderman, “Are There Limits to Total Quality Management?” s+b, Second Quarter 1998; Click here.