Why Products Get Better and Service Gets Worse

By Robert Gerst, Columnist, Troy Media

Remember when getting a 100,000 miles of your car was considered a miracle of sorts? Those invited to bear witness performed the ritual of peering into the driver’s side window to confirm all those zeros on the odometer, the proud owner instantly becoming a member of that rare class of individuals that ‘really know their cars’.

Of course, knowledge had nothing to do with it. Lemons were the norm and avoiding them took all the skill of purchasing a winning lottery ticket.

I sold my last car somewhere over 400,000 kilometres. Okay, I’m unusual, but the fact is, no one is excited by 100,000 miles anymore. Cars are just built better than they used to be. So are most engineered products. The airplanes I travel in now are way better than the planes I was riding in 40 years ago. They’re safer and even more comfortable, but what about the services I receive from the airline? Is booking your flight, getting on, or getting off easier, or harder?

What about services generally? Do you spend more time in-line, waiting? Is the service staff friendlier? Do help-lines and service centres actually provide any help or service? Or do you just spend more time on the phone pushing buttons (press three to speak to our insurance specialist) only to get someone incapable of providing help or service. What about government services – better or worse? Dumb question. Why have products improved even as services declined?

The reason is attributable to a small man with a funny name – Genichi Taguchi. Prior to the 1980’s, specifications and tolerances guided manufacturing. The specified diameter of a drive shaft may be 3.5 inches, but because nothing can be made to perfection, engineers would also specify a level of looseness that could be tolerated by the design; say 3.5 inches plus or minus 0.1 inch. A drive shaft of 3.4 to 3.6 inches, therefore, was considered ‘good’ or at least, ‘good enough’. By the time all this ‘good enough’ was tolerated in 30,000 parts, you had a car that would shake, rattle and barely roll after 30,000 miles.

Enter the diminutive Taguchi. He refused to accept ‘good enough’. Specifications and tolerances were tossed and replaced with ‘loss functions’. These identified the loss to society for any variation from the ideal. Suddenly, engineers at Toyota had a way of determining the economic and social loss of producing drive shafts at anything other than precisely 3.5 inches. Perfection became the goal, with Taguchi giving us a way of calculating the cost of falling short.

Replacing ‘good enough’ tolerances with loss functions helped drive the Quality revolution. Japanese automobiles, once considered junk, became the icons of quality. American and European manufacturers followed suit, yielding massive improvements in build quality. Other industries adopted Taguchi methods, giving rise to ‘the new manufacturing’.

But all this passed service industries by. Specifications or performance standards remain ubiquitous, guaranteeing, at best, stagnation in quality.

Consider an emergency medical services (EMS) department with a performance standard or specification of arriving within eight minutes of a call, 90 per cent of the time. What happens to EMS patients at eight minutes? Nothing. What about that 90 per cent, where did that come from? It was picked out of thin air.

Performance standards like these have no rational basis, nor a connection to what matters to people. You’re having a heart attack. Are you really thinking; “Gosh I hope they make it here in eight minutes nine times out of 10.” as the service standards imply? Or are you thinking “Damn, I hope they get here right now!” as Taguchi maintains?

An EMS organization, with a track record of arriving within eight minutes 90 percent of the time and taking over six hours for the remaining calls, is fully meeting their performance standard. No reason to improve despite the body count.

This is why service standards are really a means of avoiding accountability. They tolerate a looseness, characteristic of poorly managed or incompetent operations, just as engineering specifications tolerated a looseness in manufacturing cars.

In spite of this, or perhaps because of it, performance standards are promoted as ‘best practice’ in the management of service industries. Healthcare is obsessed with them (ask any doctor or nurse). Governments are tripping over itself defining them. Airlines, IT departments, repair services are committed to meeting them. All exercises in excusing poor performance. Taguchi would be rightly appalled. So should the rest of us.

Few on this side of the Pacific recognize his name, but Taguchi changed our world. Almost everything made, is made better, because of him. Sometimes the smallest of men are giants.

Genichi Taguchi died June 02, 2012.

Troy Media Columnist Robert Gerst is a Partner in Charge of Operational Excellence and Research & Statistical Methods at Converge Consulting Group Inc. He is author of The Performance Improvement Toolkit: The Guide to Knowledge-Based Improvement and numerous peer-reviewed articles.

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