By: Gene Bylinsky

There’s more. When connected to a binder, the DC265 can print and bind books up to 500 pages in length. When hooked up to a network, it can be run by office workers from their PC screens and keyboards. "Versatile" is an understatement here. On the machine’s touch screen an improvement over the buttons on rival Japanese copier-users can theoretically call up 100 million job permutations. To carry out all these commands, the DC265 holds in its innards more lines of software code-about six million-than Microsoft’s much hyped NT operating system, which is designed to run whole factories and enterprises.

The best new products not only hold up well but are also designed to satisfy consumers, whose wishes many companies are eagerly canvassing in ways that yield more specific information than they get from conventional focus groups. With the DC265, office workers demanded-and got-one of the few copiers that can be rolled over carpets. Other factors are playing a big part in developing the best products. Suppliers are being told to deliver part of unprecedented exactitude. Elegant software is enabling engineers to spot design flaws when they show up on computer screens, long before products are made even in prototype.

A host of companies, using Robust Design or homegrown engineering methods that incorporate this and other approaches, are coming up with outstanding new products. Among them:

	Hewlett-Packard. To accommodate electrical engineers, HP has developed first oscilloscope-a widely used measuring instrument-that can be operated with a keyboard and mouse.
	Ford Motor. Engineers at the big automaker, using three-dimensional computer design technology, can learn on a screen whether people will have enough headroom in a new vehicle and whether parts near the gas tank will cause it to overheat.
	Goodyear. Eliminating guesswork, the tire giant builds fewer experimental tires these days but tests them more rigorously. One result: far fewer costly prototypes.
	Baldor Electric. Told by a client that its motors were too noisy for exercise treadmills, Baldor came up with quieter ones.
	Varian Associates. To ensure the reliability and performance of its linear accelerators that deliver radiation doses to cancer patients, Varian maintains unusually tight control over suppliers.

Impelling this surge of excellence is fierce competition and a buying public with soaring expectations. "We seem to be nearing zero tolerance of defects by consumers," says Brock Hintzmann, a business-strategy planner at SRI International in Menlo Park, Calif. "Even toys and recreation equipment, which suffer abuse, are expected not to break".

The very term "quality" is acquiring a broader meaning. Says Dan Dimancescu, co-author of the recent book World-Class New Product Development and partner in the product-development consulting firm Nexera/Sigma in Lexington, Mass.: "Now quality means not only fit for use, but does the product meet such requirements as ease of installation, low recall, and low service and maintenance."

Happily, companies are finding that superior quality can boost profits. That’s because the best development methods, along with eliminating rework and waste, can put new models in stores sooner. All his firm’s 250 clients that have tackled the product-development process have been able to cut costs by 30% and time to market by more than half, says Michael E. McGrath, a director of the international consulting firm Pittiglio Rabin Todd & McGrath (PRTM) at its office in Weston, Mass. It’s the high quality of American products, McGrath asserts, that has been powering the U.S. economic boom.

Curiously, the surge in quality isn’t always reflected in recall statistics. An alien landing on earth and perusing the National Highway Traffic Safety Administrations (NHTSA) data on motor vehicle recalls would conclude that cars are getting worse. The NHTSA data show the biggest recalls since 1966 occurring in 1995 (18,276,449 motor vehicles), 1996 (17,622,929), and 1997 (14,665,515).

There are two major reasons: The feds have tightened recall regulations to the point where, according to Richard O. Schaum, Chrysler’s vice president for quality and serviceability, "a complaint by a single owner can initiate a federal investigation leading to a recall." Furthermore, the auto industry itself now originates 77% of all recalls, accounting for 30% of vehicles brought in, because manufacturers are more concerned about quality.

Other data confirm what every car owner knows: Vehicles are much better these days. According to federal data, the average American car now lasts eight or nine years, vs. five or six 20 years ago. By another measure, defects per 100 new cars, U.S.-made passenger cars have soared in quality, even though they still lag slightly behind Japanese brands, according to J.D. Power & Associates, the auto industry’s scorekeeper.

Some U.S. vehicles outclass their Japanese and European counterparts. Consumers Union’s automotive buying guide for 1998 rates the Ford Explorer No. 1 in the sport-utility category and Chrysler’s Town and Country as tops among minivans. Consumers Union, which bases its rating on such criteria as performance, safety, reliability, and value, puts vehicles through their paces at its 327-acre auto test center in Haddam, Conn.

Recall data leave no doubt, meanwhile, that tires have improved phenomenally. The government recalls tires mainly for safety reasons. The worst year was 1978, when the NHTSA called in 14,686,375. The figure in 1997: a mere 7,146.

The improvement in American products, alas, is not across the board. Ralph Nader, while lauding the auto industry’s "different attitude" toward quality, says he will have no trouble filling his proposed Tort Museum in Winsted, Conn., with industrial lemons. Among recent candidates that Nader lists are faulty medical devices, toxic chemicals, failed pharmaceuticals, bad industrial equipment, and automobile transmissions that slip into reverse.

Some companies are struggling with product quality. An astounding 13% of all new PCs purchased are dead on arrival and fail to start up on the first boot, according to a recent survey by Windows Magazine. "If 13% of all new cars failed to start on the first turn of the key, Detroit would be faced with a tremendous outcry," says executive editor Eileen McCooley.

As explained by Mikel J. Harry, an ex-Motorola engineer and one of the developers of six sigma at that company, the Greek letter sigma designates the standard deviation, from the average in a bell curve, of any process or procedure. The common measurement index under six sigma is "defects per million units." A unit can be almost anything-component, piece of material, line of code, administrative form.

The sigma value indicates how often defects are likely to occur, and the differences are vast: Three sigma means 66,807 defects per million, four sigma 6,210 defects, and six sigma only 3.4 defects. Ideally, as sigma increases, cost and cycle time go down and product quality rises. Harry thinks that the average company in the Western world is still operating at a four-sigma level, while in Japan the attainment of six sigma is not uncommon.

This doesn’t mean that Toyota, say, produces only 3.4 defective cars per million. The 3.4 figure applies to one million "opportunities" for errors, which can occur in any of 1,000 different components of a car being built. That’s why, even among Japanese cars, J.D. Power found 69 defects per 100 cars last year, compare with 91 among American cars.

Six sigma is a complicated system, full of abstruse statistics and math. Harry concedes that it’s difficult to put in place. That may be one reason small companies are charged $40,000 per participant in a four-week course licensed by the Six Sigma Academy in Scottsdale, Ariz., which he heads. The course is given by the American Society for Quality in Milwaukee. Big companies pay the academy a hefty $1 million per $1 billion in sales to participate in its program, with the fee topping off at $6 million. For the fee, the company gets consulting help as well as the academy’s books, teaching materials, and simulations. Harry says companies that have tried to put six sigma in place on their own-without the help of consultants like himself-often have given up. Whirlpool, on the other hand, successfully uses its own version of six sigma in product development.

CEO Jack Welch of GE, which embraced the system in 1995, says he wants his managers to be "committed zealots" of six sigma. The company credits it with adding $300 million to last year’s operating income, and the commitment shows at GE Plastics in Pittsfield, Mass. Six sigma, says general manager Ferdinando "Nani" Beccalli, forces GE Plastics to try harder to meet stringent client demands. For example, Beccalli says, the color consistency and processibility of GE’s Lexan plastic have improved under the six-sigma discipline.

GE aims to build better appliances too. Many of them get good marks for performance from Consumer Reports. But an article in the magazine last May, based on subscribers’ repair experience with machines between 1992 and 1997-machines designed before the company’s six-sigma effort was fully under way-described GE refrigerators, washing machines, and dryers as among the "less reliable" makes.

To the rescue of U.S. companies struggling to improve product quality-and improve it faster-comes what many product developers view as a more effective system than six sigma. This is Robust Design, whose originator, Genichi Taguchi, is Japan’s counterpart of the late, legendary W. Edwards Deming, the American who set Japan on its quality road. Long after he won recognition in Japan, Taguchi in 1997 was elected to America’s Automotive Hall of Fame. Among his countrymen, only Eiji Toyoda and Soichiro Honda have received this honor.

Taguchi’s methodology has caught fire at companies as diverse as HP, Ford, GM, Chrysler, Boeing, Eastman Kodak, Honda of American, ITT Defense & Electronics, Hughes Aircraft, LSI Logic, and Rockwell Space Systems, as well as Xerox. With initial help from Ford, Taguchi established the American Supplier Institute in the Detroit suburb of Livonia in 1980, with Deming as one of its founders. Now 75, the quite-spoken Taguchi, a Ph.D. in science Japanese degrees don’t specify what field, but his thesis was in quality engineering spends most of his time running his consulting business in Japan. Among other things, he’s designing an anticollision sensing system for Japanese automakers.

His approach, known in Japan as quality engineering, gets some of the credit for those high-quality Sony TVs and Toyota cars, among other fine Japanese products. Taguchi’s teachings are spreading through U.S. industry, thanks in part to his energetic son Shin, 43, who lives in Michigan and runs the American Supplier Institute. Informally called the Taguchi Institute, the not-for-profit organization charges $15,000 to put an engineer through a four-week training course.

The Taguchi quality-building philosophy is powerful and elegantly simple. Six sigma is an elaborate system-some would say overelaborate-for changing an entire organization’s mindset to minimize errant processes and parts. The Taguchi method grabs a quality problem by the throat. It goes directly to the basic physics and thermodynamics of the phenomenon-torque, electrical charge, heat flux, whatever-that’s causing trouble, and solves the problem during the early design phase.

While engineers at Italian tiremaker Pirelli, for example, struggled in vain in the early 1990s to eliminate an annoying squeal produced by a rubber timing belt that links automobiles’ crankshafts, camshafts, and water pumps-its failure can ruin a car engine-they applied the usual trial-and-error approach. This included changing the belt’s width, tightening the assembly, and so on. Nothing worked. The Italians called in experts from the Taguchi Institute, who got to the essence of the problem: energy transfer by the belt.

In this case, the energy input is power from the crankshaft, and the useful output is power transferred by the belt to the camshaft. The squeal was a product of energy being wasted. Looking at the ratio between useful output and wasted output, Taguchi engineers concluded that the materials in the belt had to be changed. This was done at no increase in cost, and the life of the belt was doubled.

The basic difference between six sigma and Taguchi’s robust engineering, says John F. Elter, vice president and chief engineer in the office products division at Xerox, is that "six sigma yields parts that meet specs, while Taguchi produces parts that avoid failure. The six-sigma process is okay, but the Taguchi method is more robust both in its logic and its methodology." Counters Six Sigma Academy’s Harry: "Ours is a much more global methodology, encompassing not just design but research and development, and reaching back into the sales process."

One of the most impressive applications of the Taguchi method was carried out by Elter as he led the development of the jack-of-all-trades DC265 copier. This was no ordinary model change, since Elter and his team faced the challenge of building Xerox’s first digital copier, a sharp departure from analog machines. Yet the DC265 was ready in seven years, three years faster than its predecessor.

Robust Design is not the only reason DC265 machines, now being produced at a rate of nearly 250 a day, have won a dominant market share sooner than even Xerox expected. The company added a big dollop of American ingenuity. The project, says Elter, began as "a clean sheet-starting from scratch. We had the opportunity to rethink not only how a part is designed but how it would be manufactured and serviced." All told, 1,5000 people worked on the DC265 at one time or another.

Applying a brand-new product architecture-the internal structure of the machine-Elter and his colleagues designed the new copier in large modules. This improves quality because the parts of the machine more likely to fail are all in modules that the user can replace without waiting for a repair engineer to show up. The DC265, furthermore, can be fixed from afar by Xerox engineers through a digital remote repair service called Sixth Sense. DC265 has 250 parts, a tenth as many as earlier Xerox copiers. To avoid the use of brackets, which would have required additional parts and made the fit less precise, parts and subsystems were made to fit so snugly than no mechanical adjustments are necessary in this machine.

Robust engineering meant that the machine’s designers went to the core of quality problems and did things right the first time. The Taguchi father-and-son team was brought in to teach its principles to 190 Xerox engineers. The engineers applied this wisdom, among other things, to control paper movement tightly to reduce jamming. They accomplished this by reducing the variability in paper arrival time and its orientation within the machine by 66%. They also improved the uniformity of the optical coating in the scanner that reads the documents, coming up with the ideal thickness in 18 tries, instead of 4,000 it would have taken with conventional trial-and-error engineering.

From the outset, Xerox engineers gave their ear to potential users. Intimate contact with clients that goes far beyond focus groups, rarity as recently as six or seven years ago, is now commonplace in betterrun companies, including those using six sigma and other product-development approaches. The secret, as many manufacturers are discovering, is to grill users about how they use machines, not about the machines’ technology. The idea, born in a Japanese shipyard in the 1960s and belatedly spreading through U.S. industry, is called quality function deployment.

Early in the DC265 project, potential users interacted with design engineers at Xerox’s development center in suburban Rochester, N.Y. The users included 250 secretaries and other administrative personnel. From the future users’ comments, Xerox engineers selected three principal requirements: The machine had to produce printed matter of professional quality; it had to be free of jams; and it had to be easy to fix in case of breakdowns. One user-friendly idea-making the DC265 one of the few office copies that can be rolled across carpets-apparently had never occurred to Xerox’s design engineers.

In the jargon of engineers, this newly respected user input is called the voice of the client. Says Elter: "We took the voice of the client to production on the factory floor. For example, to make the machine’s output look professional, we wrote specs for granularity of the toner. That spec is met by going into and fixing the subsystem that puts the toner on the roll."

Xerox’s solicitude for clients is a dramatic change from American industry’s practices eight years ago, when HP executive Edith Wilson did a study to find out why some new products gain market share and profitability while others don’t. She concluded that when products fizzle, in seven out of ten cases the developers failed to learn about users’ wishes. Even today, Wilson believes, "the biggest trap for manufacturers to overcome in product design is for engineers to do client research with preconceived notions of what the solution is going to be."

Wilson’s company goes out of its way to avoid this kind of insularity. Diligent consumer soundings, as well as Robust Design, have contributed to HP’s success. The company derives 60% of its revenues from products introduced in the past two years. "The old paradigm said that you could have either quality or time to market," says Patrick J. Byrne, general manager of HP’s big instrument-making division in Colorado Springs. "The new paradigm says that you can have both. Our central competitive advantage comes from the excellence of our product generation process."

During product development, says Byrne, "there comes a point where you have to look yourself in the eye and ask, ‘Do I really understand this?’ That’s when we use the Taguchi method to evaluate the underlying mechanism of failure." The evaluation takes place when groups of the instrument division’s engineers pile into a conference room. Each is issued a pad of Post-it notes and asked to list his ten best ideas on how to solve a problem.

Similar answers are grouped together, stuck on a whiteboard, and diagrammed. The participants are then able to arrive at a clear statement of the problem. Byrne likes this participatory aspect of Taguchi’s method, and the ability to rely on the expertise of many specialists closest to the problem. "Taguchi has really led the way in turning this into a methodology," he says. "I call it structured common sense. That’s what a good process is."

Just how productive HP’s dialogue with clients can be is illustrated by one of the instrument division’s newest products. Following a brainstorming session with clients-a "high-octane engagement," Byrne recalls-HP came up with that oscilloscope that can be operated with a keyboard and mouse. The electrical engineer’s counterpart of a doctor’s stethoscope, the device is used to measure such things as timing and voltage signals. The new oscilloscope, called Infinium and priced at $9,995 to $29,999, is also the first that can be plugged into a computer network to make its measurements accessible to many engineers directly on their computer screens.

Few companies have greater enthusiasm for Taguchi than Ford, one of the earliest U.S. companies to show interest in his methods. "We use Taguchi techniques in almost every aspect of our business, from design of experiments to process control in manufacturing," says Paul Plumberg, the automaker’s director of computerized product-development systems. In one project, his company chopped ten months off the development time for a new and better fuel pump.

"This program is being implemented to give us the ability to see the whole vehicle digitally, to give the right information to the right people to make the right decisions," says Richard Riff, manager of the C3P project. Riff jets around the world to make sure the system is being installed correctly not only at Ford’s far-flung facilities but also at Jaguar, which Ford owns; at Mazda, in which Ford holds a minority stake; and at major suppliers, all of which are being linked via the Internet. Looking at a proposed part design, says Riff, a supplier will be able to say. "My process can be a bit cheaper if you make this hole 100 millimeters wide."

At Ford, as they do at other automakers, designers start by sketching cars electronically on their computer screens. That enables them to test all sorts of things. A 3-D computer model of the car’s interior, for example, can be blended into the electronic body to see if it is compatible with engineering data. For purposes of solving design problems, the car on the screen, built from math equations, is just as real-and more useful-than one made of metal. Parts can be subjected to dynamic testing on the computer to see how they hold up to heat, pressure, impact, or wear.

The interior of the car can also be tried out on digital manikins for comfort and roominess. These "passengers" have both the exterior and interior features of real people, including 17 joints in their spines. Seated in the car, they can rotate their heads and bend their necks. Available on software from Engineering Animation, the manikins include "parents" named Transom Jack and Transom Jill, plus "children."

At Ford’s advanced engineering center in Dearborn, Mich., David B. Roberts, a supervisor in the C3P office, demonstrates other C3P possibilities. In a 3-D cutout model of a car’s interior displayed don a big computer screen, Roberts touches the gas tank with a mouse pointer and makes it disappear. He rotates the car’s undercarriage to see what parts adjoin the tank, to make sure none generate heat that could reach the tank and its combustible contents. In the past, a tape measure on a car model built of wood and clay would have been used to determine the distance between heat-generating parts and the fuel tank.

Many companies have taken their own paths in the pursuit of better products, using principles similar to six sigma or Robust Design without formally adopting those methods. At Goodyear, for example, science is replacing trial and error in tire development. "Using the old ways, you’d make an experimental tire and take it out for a spin to find out whether you’d done a good job," says Frederick "Rick" Vannan, Goodyear’s director of advanced-product and process technology. Today, he says, "we’ve moved from kindergarten-type testing to Ph.D-type testing."

Computer modeling tools now enable Goodyear designer to figure out whether a tire will be good for resisting hydroplaning, for wet traction, and for handling and cornering. "It saves a lot of money because you don’t have to build as many experimental tires," Vannan says. "You probably do just as many miles of testing as in the past, but you’re doing it on exactly the right candidate, not wasting it on the wrong one." The new methods have enabled Goodyear, among others, to develop a premium-priced tire that can travel 50 miles at 55 mph with a big hole and no air.

The voice of the client, too, is getting a response in many other corners of industry. In 1992, Baldor, the big maker of electric motors in Fort Smith, Ark., learned that some of its motors were too noisy to be incorporated into exercise treadmills made by Cybex of Medway, Mass. Sot the manager of its plant that made this kind of motor sent eight blue-collar workers by corporate jet to Cybex. Mingling with Cybex workers, the visitors established first-name rapport and determined what some of the problems were. The noise level was reduced to Cybex’s satisfaction.

Another key to quality, whatever the product-development methodology, is making suppliers toe the line. At Varian Associates Oncology Systems, headquartered in Palo Alto, President Timothy E. Guertin recalls how "it used to be that a supplier would change a form of coating or a composition of metals and not tell us." If every there were machines in which quality and reliability are absolute musts, it is varian’s linear accelerators, known as Clinacs, which are used to treat cancer patients with finely pointed beams of radiation.

The latest version of the Clinac, containing 7,000 parts, sells for $900,000 to $1.1 million. Since the machines weigh 17,000 pounds and as a practical matter can’t be recalled in case of a malfunction, they have to be built right the first time around. Purified water is used to cool the Clinac, and that can lead to problems. Some years ago, the water began damaging a part after is supplier made an unannounced change in the metal it was using. No more. Today suppliers are required to notify Varian beforehand of any changes hey propose to make.

To some experts, products like Varian’s Clinac and Xerox’s DC265 show that U.S. industry has found better ways to develop products than the Japanese have. Dimancescu of Nextera/Sigma says the Americans have gone beyond the "sine qua nons" of quality to a "simulation environment where we’re able to recreate complex solution very early in the game, based on a much more profound understanding of the information necessary to produce better products. I think we have developed the ability to understand the client, the regulatory environment, and the downstream effort far more sensitively than the Japanese. The Japanese still do well, but I think we, as a culture, have learned to do it better."

That’s undoubtedly true of outstanding American companies, though not of the others. And even those that have reached the championship category have done it with the aid of some very smart people from the Land of the Rising Sun.