Part two of four

Baldrige Award Winner Profile

An interview with Vince Morgillo, the director of quality for Dana Corp.'s Spicer Drive Shaft division, and Joseph Sober, division vice president and general manager..

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by Robert A. Green

On April 6, President Bush presented the 2000 Malcolm Baldrige National Quality Award to four companies during a ceremony held in Alexandria, Virginia. Among those winners was the Spicer Drive Shaft division of Dana Corp., one of the world's largest suppliers of components, modules and complete systems to global vehicle manufacturers and their related aftermarkets.

 What follows is an interview with Vince Morgillo (above, left), Spicer Drive Shaft's director of quality, and Joseph Sober, the division's vice president and general manager. This is the second of four interviews conducted with representatives from each 2000 Baldrige Award winner to be published in consecutive issues of Quality Digest.

Quality Successes The company's return on net assets improved to more than 25 percent in 2000, as compared with less than 20 percent in 1997.    Internal defect rates have decreased more than 75 percent from 1996 to 2000 and are approaching best-in-class levels, while defect rates for key suppliers have decreased to less than one-fifth the level for the best-known competitor.   From 1998 to 2000, overall customer satisfaction, as measured by a third-party survey, has averaged 80 percent or better, topping all competitors.   Customer complaints have dropped steadily, from 6.8 per million units shipped in 1995 to about 2.8 in 2000, and since 1996, Spicer Driveshaft has not lost a single customer.

QD: With such a heavily automotive-manufacturing-focused organization, you obviously have QS-9000, ISO 9000 and ISO 14000 coming into play. Why did you decide to go after the Baldrige Award when you've already implemented such a formalized, structured quality process?

Morgillo: We use ISO 9000 and QS-9000 to document our approaches and assist in the deployment of those approaches. We decided, as Dana Corp., to embark on this journey because the Baldrige criteria provide us with a structured framework for self-assessment of our leadership in business systems. We've done this as an internal assessment for years, and our scores have continued to grow.

 The next challenge for us, then, was determining how to calibrate our process. We decided to submit a self-assessment to the Baldrige examiners and obtain their feedback report. We did so three years ago and were delighted when not only did we get a feedback report, but we also received our first site visit. This increases the value of the feedback report, because now not only are they looking at what they've read, they're coming in and saying, "Are you doing what you say you're doing?" much as an auditor might. The win is confirmation that we're using this feedback report and this process to improve. But we didn't apply for the award; we applied for the feedback report. We applied to calibrate our process. The win is just frosting on the cake.

QD: When did Dana adopt ISO 9000 and QS-9000, and when did you start moving toward the Baldrige?

Morgillo: ISO 9000 and QS-9000 came into play in the early 1990s. When Ford, GM and Chrysler launched QS-9000, we were one of the first divisions to get certified. So we were there in the beginning, but we had already started the Baldrige process by then. Our Baldrige process, which we call the Dana Quality Leadership Process, is an overall self-assessment of the entire business. And while ISO 9000 and QS-9000 aren't limited to Baldrige category six, they're primarily focused there.

QD: What's been the biggest challenge within the corporation in this journey?

Sober: One challenge that we had--and overcoming it proved to be very positive for us--is that we had significant variation across the operating unit, from facility to facility. With 17 different facilities, our challenges include ensuring uniform deployment, consistent practices and so on. This process really helped us get those lined up. We started doing more sharing of best processes inside the division. We started benchmarking each other. We put in additional measurements to ensure that every facility was lining up and moving toward a common expectation.

 Our 1999 feedback report was a real eye-opener. It was a challenge to reduce variation, but it was very positive for us in the end. And, obviously, we reduced a lot of that variation, or we wouldn't have earned the award.

QD: How did you go about reducing the variation among the facilities?

Sober: We started putting in common measurements and tracking specific metrics. We have a saying at Dana: You get what you measure. We started doing facility visits and checking each other's housekeeping. We put in a communications road map and asked every facility to communicate monthly. We also put in a client recognition roadmap to provide some uniform recognition. We put in a common set of expectations for every facility and talked about it. We've got some facilities that are world-class and others that are a lot less. Why is that? We're blessed with good people all the way across the division, so why should one plant be cleaner than another?

Morgillo: As we approached QS-9000, we used a site-certification approach (using ISO 9002 at the sites and ISO 9001 at our division office and our small production facility there) and identified the core processes that needed to be uniformly deployed across all facilities. We were able to segregate which were indeed core processes and put those in our division's standard operating procedures. Then we fostered empowerment by having site-specific operating procedures that have to support our upper-level procedures. And our registrar was helpful in having us deploy those. So, we use the documentation system to address the feedback in a structured manner, and the communication reinforces it to everybody.

QD: Are there any specific techniques that you use to foster employee buy-in, not only in the Baldrige process, but for QS-9000 as well?

Sober: We ask for their ideas. Spicer Drive Shaft submits 30 ideas per year on average, and we maintain about 80-percent implementation. If you start implementing employees' ideas, they will get involved in a hurry because they recognize that you're listening to them. And that's a key ingredient.

QD: Have you calculated the return on investment for your quality effort? Do you track the cost of quality and the return on your quality investment?

Morgillo: We track the cost of quality, but we're not talking about defect reductions or warranty reductions. We're talking about quality in the Juran/Deming mindset that 80 percent of problems are management. What makes this different is that this is a leadership structure. So what's the impact? Look at our results--actually, look at our profit; look at our return on investments; look at our market share. Those measurements are the true measures of quality. Our PPMs and our warranty rates have gone down, but the important message to take out of this is that you have to start measuring quality at the top level in order to generate the bottom-level results.

QD: What does the future hold? Do you want to work up to the Baldrige Award's 1,000 possible points? And how would you go about doing that?

Morgillo: You'll never get 1,000 points, but you keep going for it because it's a moving scale. "Beyond Baldrige" means that we continue to deploy the processes that we have. "Beyond Baldrige" means that our customers become more a part of our business than they are today, if that's possible. We'll make it possible.

It means that our people will become more empowered to help them and our future will become more secure. It's the continuous application of define, measure, analyze, improve and control to business processes as well as to manufacturing and assembly processes.

About the author

 Robert A. Green is Quality Digest's news editor. E-mail him at contact_us .