Due to extraordinarily high failure rates and plenty of negative Internet buzz, Microsoft Corp. announced in July that it would expand its global Xbox 360 warranty coverage.
 As a result of what Micro-soft views as an unacceptable number of repairs to Xbox 360 consoles--which Australian tech-review Web site, Smarthouse, reports as a failure rate of up to 30 percent--the company conducted extensive investigations into potential sources of general hardware failures. Having identified--but not revealed to the general public--a number of factors which can cause general hardware failures, indicated by three red flashing lights on the console, Microsoft has made improvements to the console and is enhancing its Xbox 360 warranty policy for existing and new customers.
While remaining close-mouthed about the actual cause of the high failure rate of the Xbox 360, Microsoft is taking responsibility to repair or replace any consoles that experience the general hardware error within three years from time of purchase, free of charge, including shipping costs. All other existing Xbox 360 warranty policies remain in place. Microsoft will take a $1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30, 2007, for anticipated costs under its current and enhanced Xbox 360 policies.
"The majority of Xbox 360 owners are having a great experience with their console and have from day one. But this problem has caused frustration for some of our customers and, for that, we sincerely apologize," says Robbie Bach, president of Microsoft's Entertainment & Devices Division. "We value our community tremendously and look at this as an investment in our customer base."
For any customer who has previously paid for repair expenses related to the three flashing lights error message, Microsoft will retroactively reimburse them.
The story has received a lot of press in the past few months, and the problem was being discussed in Xbox chatrooms, blogs, and discussion groups on the Web more than a year ago. On Aug. 25, 2006, the popular game-review Web site http://biz.gamedaily.com reported that, "Yesterday we were tipped off by an employee of a major publisher who claimed that the Xbox 360 failure rate--at least within his studio--has been much higher than Microsoft has stated failure rates to be (around 3-5%). The employee suggested that the failure rates were actually as high as 30-50 percent among the 300 or so consoles they received."
Such figures, while not official, will certainly not boost the confidence of potential buyers of the game system, but to counteract some of the negative publicity, on July 26, at Comic-Con International 2007 in San Diego, Microsoft announced that it lowered the price of the popular Xbox 360 HD DVD Player from $199 to $179 (in the United States only) starting Aug. 1, 2007, and will add five free HD DVD movies for anyone purchasing an Xbox 360 HD DVD player between Aug. 1 and Sept. 30, 2007. Microsoft also announced price reductions for other Xbox models.
For more information, visit www.xbox.com.
Do the Math
Last month we showed you a statement made by J.D. Power and Associates that had us all scratching our heads a bit. In a press release related to the improvement of U.S. automakers, J.D. Power wrote: "Over the past 20 years, the automotive industry has improved in quality at the rate of 6 percent per year on average--a 20-year improvement rate of more than 120 percent."
We asked our readers if that statement could be true (mathematically speaking) and, if so, why. Some of you replied "no," that if you had a 6-percent improvement per year, with compounding you would have an overall improvement of 220 percent. Some of you said, "who cares." But about a third pointed out that we didn't take into consideration that the J.D. Power report said an "average" of 6 percent per year. If there were years of no quality gain, or of a quality loss, as well as years when quality improved, it is possible to get a yearly average of 6 percent and, including compounding, an overall improvement of 120 percent. Just the same, it seems awfully coincidental that 120 percent divided by 20 years equals 6 percent.
Everybody who submitted an answer was entered into this month's drawing. Our condolences to Stephen Faulstich for being this month's winner of a probably useless prize from our good friends at woot.com.
Dean Myler submitted the following Washington Post story ( www.washingtonpost.com/wp-dyn/content/article/2007/07/29/AR2007072900827_pf.html) in which there appears to be an error. We agree with Myler that something seems amiss. Spot the error, send it to us at comments@qualitydigest.com, and you might be a winner, too.
Have you recently spotted a math error? Submit it to us at comments@ qualitydigest.com.
Rx: Complexity Theory
By applying complex adaptive system science (CASS) to operations within the hospital environment, Columbus Regional Hospital in Columbus, Indiana, analyzed and improved its performance.
Stemming from complexity theory, complex adaptive systems in a social setting are defined as collections of elements (people, departments, organizations, for instance) that interact with each other in unpredictable ways and then adapt to the new conditions that arise as these interactions change the context in which the elements operate. The theory is being applied in many organizational environments, such as health care institutions, to help model and explain processes and behaviors.
CRH used CASS to improve and integrate care delivery with a focus on establishing interdisciplinary relationships. For example, the hospital has achieved a considerable decline in surgical-site infections and ventilator-associated pneumonia (VAP) in recent years, two issues that have plagued the health care industry.
"Prior to 2002, our critical-care environment was hierarchical and disjointed," says Jennifer Dunscomb, clinical nurse specialist. "This contributed to VAP rates consistently above the national nosocomial infection surveillance rate of 75th percentile." She explained that an investigation of ICU procedures revealed decisions being made based on personal experience, without standardized care processes; errors being blamed on incompetence, with no use of decision-support tools; and no process for ongoing measurement of successful procedures.
A team of diverse critical- care experts used CASS to systematically analyze evidence, investigate the rules leading to practice variation, and develop innovative strategies targeting complications.
Key activities included assessing interdisciplinary relationships, initiation of daily rounds with identification of patient goals, defining clinical quality indicators influencing outcomes, and establishing a process for data collection and reporting. The team developed standardized mechanical ventilation orders and protocols and initiated them on every mechanical ventilation patient. They also integrated critical-care data into the current hospital medical-quality reporting structure. Following implementation of the initiative, VAP rates decreased from 5.14 to zero and have been sustained for more than 18 months. ICU length of stay and mortality rates also dropped significantly.
"Nonclinical departments also serve an important role to the clinicians who are providing care at the bedside," says Dunscomb, explaining that hospital management and interdisciplinary clinical teams reviewed nonclinical processes that influence quality and safety outcomes for patients. For instance, maintenance crews keeping all sinks repaired and ready for personnel to use prior to procedures decreased infection rates.
Columbus Regional Hospital now ranks in the top 4 percent of hospitals in the United States for clinical quality, according to the Centers for Medicaid & Medicare Services.
CRH recently received the 2007 American Hospital Association--McKesson Quest for Quality Prize, the highest quality award given by the hospital industry.
To learn more, visit www.crh.org .
Quality Bloopers
We all like a good laugh. If you have a 150- to 250-word anecdote about a quality-related snafu that made you chuckle, send it to us by clicking the comments link below. If we print it, something funny will come your way.
Global Six Sigma Awards
WCBF has announced the shortlist of finalists for The 2007 Global Six Sigma Awards program that will take place during the WCBF's Second Annual Global Six Sigma Summit and Awards, Oct. 23-27, 2007, at the Rio All-Suite Hotel and Casino in Las Vegas . Category winners, as well as the platinum award for the most outstanding organizational achievement through Six Sigma, sponsored by Genpact, will be announced at The Awards Gala Dinner on Wednesday, Oct. 24, 2007.
Award categories include:
• Best Achievement of Design for Six Sigma and Innovation
• Best Achievement of Integrating Lean and Six Sigma
• Best Achievement of Six Sigma in Financial Services
• Best Achievement of Six Sigma in Healthcare
• Best Achievement of Six Sigma in Manufacturing
• Best Achievement of Six Sigma in Outsourcing
• Best Achievement of Six Sigma in Sales & Marketing
• Best Achievement of Six Sigma in Service & Transactional Environments
• Six Sigma VP of the Year Award
For event details, visit www.wcbf.com/quality/5081 .
Align Your Strategies
A global supply-chain survey of 800 companies con‑ ducted by Manufacturing Insights, an IDC Co., reveals a disconnection between business objectives and supply-chain strategy. According to survey findings, the majority of respondents (71%) cited increased quality and customer satisfaction as their top business objectives, followed by reducing overall cost and improving productivity (66%), and increasing revenues and exploiting new markets (62%).
Yet, despite the desire to improve service levels, almost half (48%) of respondents cited reducing material, manufacturing, and/or logistics costs as their top supply chain strategy. Paradoxically, the second and third most important supply strategies cited were factors that are more relevant to the objective, such as, more responsive and timely decision-making across the supply chain (39%), and more responsiveness to changes in the marketplace (36%).
"Ideally, companies should map their business objectives with supply chain priorities to make the most effective IT investments," Knickle continues. "The survey results indicate that many companies have a gap between their overall objectives and how they execute in the supply chain."
To learn more, visit www.manufacturing-insights.com.
I on the News
Editorial by Carey Wilson.
It started out as an amusing--and disgusting--news story. Somewhere in Beijing, China, according to a news item filed July 8, 2007, by freelance video reporter Zi Beijia at the state-run Beijing television (BTV) station and later broadcast on the China Central Television network, a street-food vendor was creating and selling baozi buns--a popular snack--stuffed with shredded cardboard that had been soaked in caustic lye and flavored with bits of fatty pork and powdered seasonings.
The story appeared on Yahoo News as well as CBSNews .com, and made the rounds of the blogosphere. Ten days after the original broadcast of the story, BTV announced that the story was a complete fabrication staged by the reporter.
Asia Times online reported on August 1 that "An investigation was prompt, and high-profile, and punishments of persons involved are more severe than ever before." The report noted that Zi and five others were arrested pending a criminal investigation, and that six BTV officials, including the producer and editor in chief, were harshly disciplined. "This is the first time that a journalist has been put under criminal custody for fabricating a news story," said the Asia Times.
Confessions, arrests, and undefined harsh disciplinary measures aside, it should be noted that a Google search for "Chinese cardboard buns" resulted in a list of 231,000 Web postings containing those terms. Indicative of the mistrust of both the government and the media were several news stories quoting average Chinese citizens who believe that the reports of the story being a hoax are themselves fake. "It's not just me; most of my customers didn't believe [the story] was a hoax either," a cab driver told the official Xinhau news service.
Many worry that if reporters are being actively discouraged from bringing such stories to light, it may have a dampening effect on reportage of other incidents. "This confusing state of affairs is cause for distress," read the Chinese paper Southern Metropolis Daily in a recent editorial. "Surrounding this back and forth over cardboard dumplings is a worsening food crisis, and a crisis of credibility among media and journalists. There is also the problem of government controls on the media. The snowballing of case after case provides the backdrop for the public mindset. Suspicion, doubt, distrust have become the scalpels with which the public dissects public events."
How much more so for those of us far away from China, who have to filter our faith in quality control bureaucracies through a miasma of stories about poisonous pet foods, toxic childrens' toys, lead-laced baby bibs, and a growing concern that such products can not only escape detection at their points of origin, but can also make it through every port, customs inspection point, and retail outlet to arrive in our own homes.
It's an unappetizing state of affairs.
DVD Review
 Mike Micklewright, aka The Whys Guy, is excited about quality. In fact, watching just the hour-plus of his DVD, Batchin'! Why Something So Wrong Can Seem So Right, with his gesticulations and breathless, hyper-excited delivery, will leave you wondering if he started his day with four espressos and a Red Bull chaser.
Which isn't to say that Batchin'! isn't a source of valuable, well-organized, and even entertaining information. It is. It's just that in his rush to turn what could be a somewhat dry topic into something packed with excitement and worthy of wholeheartedly energetic motivation, Micklewright goes so far in the opposite direction that it's possible to become distracted by his boundless, pop-eyed exuberance and lose sight of the value of the information he's offering.
Micklewright's approach to teaching the impracticality of batch processing and the advantages of lean resource management is to take us on a tour of his house to show us where waste is most likely to occur, and how to avoid or minimize it at the source.
Kitchen hints:
• Don't buy "cheap" bulk packages of foods that will spoil before you eat them.
• If you only drink one cup of coffee in the morning, don't brew a 10-cup pot.
• Don't scrub your dishes before putting them in the dishwasher.
So far, so good. These are lessons that are easily transposed to good practices in the workplace. The advice to sleep in short doses to increase productive waking time, maybe not so much.
Where he really hits his stride is in breaking down the laundry process, his analysis of which includes a 5S evalua t ion of the closet to get rid of unnecessary inventory, and a kaizen event for documenting and measuring the step-by-step processes involved in washing clothes. Micklewright's wife, who provides a deadpan, calming counterbalance to Micklewright's hyperactivity, exemplifies the wise manager taking advantage of the training and intelligence of shop-floor workers to improve managed processes.
All in all, Micklewright provides an entertaining introduction to the pitfalls of batch processing and the advantages of lean-management, and does it in such a way that you get a chuckle or two out of the learning experience. More important, you can also translate the lessons from the home to the workplace.
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