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Quality control - address to Australian Organisation for Quality Control



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v'MR CHAIRMAN

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· . THE THEME SET FOR YOUR SEMINAR - "PRODUCTIVITY THROUGH

QUALITY MANAGEMENT" - IS A MOST APPROPRIATE ONE IN TODAY'S

ECONOMIC AND COMPETITIVE CLIMATE ·

- . A CLIMATE IN WHICH OUR INDUSTRIES HAVE TO SURVIVE

AND COMPETE NOT ONLY ON THE INTERNATIONAL MARKET

. BUT MORE PRESSINGLY, AT HOME.

PRESSURES ARE CONSTANTLY BEING EXERTED ON THE EXCHANGE

RATE, AND INFLATION IS A MAJOR PROBLEM IN AUSTRALIA AS IT IS J N • ■ · \ ■

EVERY INDUSTRIALISED COUNTRY: INCREASING DIFFICULTY IS BEING \

EXPERIENCED IN GAINING ACCESS FOR OUR PRODUCTS OVERSEAS, AND

WE ARE FACED WITH THE IMPLICATIONS OF THE INDUSTRIAL EXPANSION )■ :

IN RECENT YEARS IN ASIA AND SOUTH AMERICA. WHO WOULD HAVE

· = THOUGHT A FEW YEARS AGO THAT SOUTH KOREA, TAIWAN, THE PHILIPPINES

AND SINGAPORE WOULD HAVE INDUSTRIALISED SO RAPIDLY AND BECOME

KEEN COMPETITORS IN THE AUSTRALIAN HOME MARKET. .

■ ' IN THE LAST 10 YEARS THE MANUFACTURING SECTOR IN

. AUSTRALIA HAS REDUCED ITS CONTRIBUTION TO THE GDP FROM 28% TO

22%. · ·

ADVANCES IN TECHNOLOGY SHOULD PROVIDE GREAT ADVANTAGE

(zr TO A COUNTRY LIKE AUSTRALIA WITH OUR ABUNDANCE OF NATURAL .

RESOURCES AND A HIGHLY EDUCATED WORK FORCE. '

BUT WE MUST RECOGNISE THAT NEW SCIENTIFIC AND

TECHNOLOGICAL ADVANCES ARE BROADCAST TO THE WORLD ALMOST

SIMULTANEOUSLY IN THIS DAY OF MODERN COMMUNICATION SYSTEMS.

. ACCORDINGLY,

. . TECHNICAL INNOVATIONS CAN BE INTRODUCED IN MANY

COUNTRIES AT THE SAME TIME; AND IF WE FAIL TO

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' κ . . ,

. . . KEEP UP WITH THIS RAPID INTRODUCTION WE CAN FIND

■ . IT INCREASINGLY DIFFICULT TO COMPETE AGAINST

' ; * COUNTRIES WHO HAVE PROGRESSED MUCH FURTHER ALONG

· THE LEARNING CURVE

• * . THE COST OF PRODUCTION IS PROGRESSIVELY BEING

LEVELLED BETWEEN COUNTRIES AND HENCE OTHER FACTORS

SUCH AS QUALITY BECOME CRITICAL IN THE FIGHT FOR

. OUR INDUSTRIES TO REMAIN COMPETITIVE AND VIABLE.

THERE ARE OF COURSE MANY INDIVIDUAL FACTORS WHICH CAN

. CONTRIBUTE TO THE VIABILITY AND PROFITABILITY OF INDUSTRIES AND

^ . COMPANIES, AND I AM SURE THIS AUDIENCE WILL BE AWARE OF THE ( . V

BENEFITS FLOWING FROM BETTER MANAGEMENT TECHNIQUES, BETTER

MARKETING STRATEGIES, THE IMPORTANCE OF INDUSTRIAL RESEARCH AND

DEVELOPMENT AND INDUSTRIAL DESIGN, THE INTRODUCTION OF INDUSTRIAL

STANDARDISATION AND SO ON. BUT IN MANY WAYS THE VERY REASON WE

ARE HERE TODAY, QUALITY CONTROL MANAGEMENT, IS CENTRAL TO ALL

OF THESE. .

' IT MAY WELL BE THAT MY REMARKS WHICH FOLLOW ON THE

IMPORTANCE OF QUALITY CONTROL MAY BE PREACHING TO THE CONVERTED.

HOWEVER, I HOPE THEY WILL BE NOTED BY A WIDER AUDIENCE THAN

G a THE ONE WE HAVE HERE TODAY.

■ FROM THE OUTSET HOWEVER I WILL MAKE THE POINT THAT

THE GOVERNMENT IS STRONGLY ENDORSING AND SUPPORTING THE EFFORTS

WHICH ARE BEING MADE BY FIRMS AND ORGANISATIONS, SUCH AS - AND

PERHAPS PARTICULARLY - THE AOQC, TO PROMOTE QUALITY CONTROL

. THROUGHOUT INDUSTRY.

. . THE IMPORTANCE OF QUALITY CONTROL HAS BEEN LONG

. RECOGNISED BY A GOOD NUMBER OF MANAGERS IN AUSTRALIAN INDUSTRY.

A TANGIBLE RESULT OF THIS RECOGNITION HAS BEEN THE ESTABLISHMENT

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SV- IN MOST STATES OF THE AUSTRALIAN ORGANISATION FOR QUALITY CONTROL

' WHICH HAS BEEN IN EXISTENCE NOW FOR 10 YEARS,

MY OWN ASSOCIATION WITH THE ORGANISATION ALSO STEMS

. > FROM ABOUT THIS TIME, AND I HAVE BEEN VERY PLEASED TO OBSERVE

THE PROGRESS WHICH HAS BEEN MADE IN THIS PERIOD.

TEN YEARS AGO AOQC HAD ABOUT 200 MEMBERS IN TWO

DIVISIONS. TODAY IT HAS 800 IN FOUR DIVISIONS AND A NATIONAL”

. ADMINISTRATION WHICH WAS ESTABLISHED IN 1970. IT NOW NEEDS

ONLY TO ESTABLISH BRANCHES IN TASMANIA AND WESTERN AUSTRALIA

r TO BE TRULY NATION WIDE .

. AND I UNDERSTAND THAT THIS MATTER IS WELL IN

HAND.

IT HAS ESTABLISHED LINKS WITH QUALITY AND RELIABILITY

ORGANISATIONS OVERSEAS, PARTICULARLY IN EUROPE, AMERICA AND .

NEW ZEALAND. · ■

ITS PROMOTIONAL AND TRAINING PROGRAMS ARE WELL KNOWN,

AND IT MAINTAINS CLOSE WORKING RELATIONSHIPS WITH KINDRED .

ORGANISATIONS SUCH AS THE STANDARDS ASSOCIATION OF AUSTRALIA.

Or '

FOR THE GOVERNMENT’S PART AND AS FAR AS MY MINISTERIAL

RESPONSIBILITIES ARE CONCERNED, AOQC IS A HIGHLY REGARDED

ORGANISATION. INDEED THE COMMONWEALTH GOVERNMENT HAS PROVIDED

FINANCIAL AND OTHER KINDS OF ASSISTANCE TO HELP AOQC PROMOTE

THROUGHOUT INDUSTRY THE BENEFITS TO BE GAINED BY COMPANIES THAT

HAVE ADOPTED QUALITY CONTROL POLICIES AND PRACTICES.

. . YOU WILL ALL HAVE RECEIVED BY NOW A COPY OF THE JOINT

SURVEY CONDUCTED BY THE'DEPARTMENT OF PRODUCTIVITY AND THE AOQC

WHICH HAD AS ITS AIM TO EVALUATE THE EXTENT AND SIGNIFICANCE OF

. QUALITY CONTROL IN THE AUSTRALIAN MANUFACTURING SECTOR.

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y. IT WILL BE LEFT TO OTHERS TO DISCUSS IN DETAIL THE

;■ / SIGNIFICANCE OF THE SURVEY'S RESULTS, BUT I WOULD LIKE TO MAKE

" SOME OBSERVATIONS.

, I NOTE PARTICULARLY THAT THE SESSIONS THIS MORNING

' WILL BE SPECIFICALLY ADDRESSING THE SUBJECTS OF COMMUNICATIONS,

. TRAINING FOR QUALITY AND THE COSTS ASSOCIATED WITH QUALITY. THIS

AFTERNOON YOU WILL BE TAKING THE OPPORTUNITY TO DISCUSS IN SYNDICATE

SESSIONS OPPORTUNITIES - FOR FUTURE ACTION AND I HOPE THAT MY QBSERVA-

TIONS WILL ASSIST IN OPENING UP SOME OF THAT DISCUSSION. .

. I CAN ASSURE YOU THAT MY DEPARTMENT WILL BE MOST ANXIOUS

C TO DISCUSS WITH THE A.O.Q.C. ANY THOUGHTS OR PLANS WHICH COME OUT , OF THE SEMINAR.

■ ■ FROM THE SURVEY RESULTS IT WOULD APPEAR THAT A LARGE

PERCENTAGE OF AUSTRALIAN FIRMS DO HAVE A QUALITY CONTROL SYSTEM.

HOWEVER,CNIY ABOUT 20% OF SMALL FIRMS AND AROUND 50% OF THE LARGER "

ONES COMPUTE THE COSTS ASSOCIATED WITH THEIR QUALITY CONTROL. THIS

LEADS ONE TO MAKE THE POINT THAT THOSE FIRMS WHICH DO NOT KNG7 THE

■ NATURE AND EXTENT OF THE COSTS ASSOCIATED WITH THIS AREA COULD.BE

LACKING IN BASIC DATA FOR EFFECTIVE DECISION MAKING BY MANAGEMENT.

c. - '

; THIS IS PARTICULARLY AN IMPORTANT POINT WHEN WE NOTE THAT

QUALITY CONTROL IS A MANAGERIAL SYSTEM FOR COORDINATING AND ANALYSING

PRODUCTION ACTIVITIES.

' THE SURVEY FURTHER INDICATES THAT IN THE CASE OF ABOUT

80% OF RESPONDENTS OPERATIONAL RESPONSIBILITY FOR QUALITY CONTROL

WAS LOCATED IN TECHNICAL OR ADMINISTRATIVE AREAS OF THE ORGANISATION.

PERHAPS MANAGEMENT NEEDS TO BE MORE INVOLVED IN DEVELOPING A POSITIVE

APPROACH TO QUALITY. SUCH ISSUES AS QUALITY POLICY, OBJECTIVES,

PLANNING, ORGANISING, MANNING AND THE MEASUREMENT OF RESULTS ARE .

INDEED A RESPONSIBILITY OF MANAGEMENT. ‘

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, . _ FOR THE SMALLER FIRMS THE MANAGING DIRECTOR HIMSELF

WILL USUALLY HAVE TO TAKE ON THE TASKS OF ESTABLISHING THE

NECESSARY CONTROL AND ASSIGNING SPECIFIC DUTIES TO INDIVIDUALS

AND OF ENSURING ACHIEVEMENTS ARE MEASURED AND A FEEDBACK OF

INFORMATION EXISTS TO GUIDE DECISIONS. . .

FOR THE LARGER FIRM THERE WILL BE A NEED TO DELEGATE

AUTHORITY TO AN APPROPRIATE STAFF SPECIALIST WHO WILL DIRECT

QUALITY CONTROL ACTIVITIES BUT OVERALL RESPONSIBILITY MUST STILL

REMAIN WITH AND BE EXERCISED BY TOP MANAGEMENT.

" .WHEREVER THE AUTHORITY LIES, THERE APPEARS TO BE A LOT

MORE ROOM FOR IMPROVEMENT BY MANAGEMENT IN HAVING DATA UPON WHICH

MEANINGFUL DECISIONS CAN BE MADE. .

. · . · ·

WHILST WE CAN POINT TO MANY AREAS OF EXCELLENCE IN

QUALITY IN AUSTRALIAN PRODUCTS AND SERVICES, I BELIEVE THERE HAS

IN GENERAL BEEN A FAILURE TO RECOGNISE AND THEN RESPOND TO REQUIRE­

MENTS FOR THE ASSURANCE OF QUALITY IN TERMS OF THE PERSONNEL, SKILLS,

SYSTEMS, PRACTICES AND TECHNOLOGIES NEEDED TO ACHIEVE THEM. I

WONDER AT THE WASTE OF RESOURCES AND LOWERING OF PRODUCTIVITY WHICH

OCCUR AS A CONSEQUENCE AND THE DISSATISFACTION OF CUSTOMERS WHO

RECEIVE UNACCEPTABLE PRODUCTS WITH ALL THE FRICTION, INEFFICIENCY

AND ECONOMIC LOSS THAT CAN FLOW FROM THAT SITUATION. '

AS REGARDS THE COST TO THE NATION, A RECENT ESTIMATE BY

YOUR N.S.W. DIVISION'S CHAIRMAN PUT THE ANNUAL COST OF QUALITY

FAILURES IN AUSTRALIAN INDUSTRY AT SOMEWHERE BETWEEN 800 AND 1 000

MILLION DOLLARS, A VERY SUBSTANTIAL WASTE OF RESOURCES INDEED.

AUSTRALIA HAS A NUMBER OF ORGANISATIONS, VITALLY CONCERNED

WITH QUALITY AND RELIABILITY, MAKING THEIR MARK IN THE FIELD. THEY

RANGE THROUGH DESIGN, TESTING, CALIBRATION, QUALITY ASSURANCE AND

QUALITY CONTROL. THE A.O.Q.C. IS OF COURSE ONE. OTHERS INCLUDE:

. THE STANDARDS ASSOCIATION OF AUSTRALIA

. THE INDUSTRIAL DESIGN COUNCIL OF AUSTRALIA

. THE DEPARTMENT OF DEFENCE THROUGH ITS QUALITY DIRECTORATES

. THE DEPARTMENT OF HEALTH

. STATE GOVERNMENT AUTHORITIES

. THE INSTITUTE OF QUALITY ASSURANCE

. THE NATIONAL ASSOCIATION OF TESTING AUTHORITIES.

I BELIEVE THAT THERE IS OPPORTUNITY TO DEVELOP A CLOSER

COLLABORATION BETWEEN THESE ORGANISATIONS AND TO FORM A NATIONAL

FOCAL POINT FOR ALL MATTERS CONCERNING QUALITY. THIS COULD LEAD .

TO A CONTINUING PROGRAM AIMED AT ENCOURAGING AND WHERE NECESSARY,

ASSISTING ALL SECTORS OF INDUSTRY TO ACHIEVE THE REQUISITE QUALITY

OF THEIR GOODS AND SERVICES IN THE MOST COST-EFFECTIVE MANNER.

I HASTEN TO ADD THAT IN NO WAY DO I SUGGEST THAT THE

INDEPENDENCE OF EXISTING ORGANISATIONS SHOULD BE CHALLENGED OR

THEIR ROLES USURPED. RATHER, I WOULD SEE THAT THE AIM WOULD BE

TO DEVELOP, MARSHALL AND COORDINATE THEIR ACTIVITIES AS PARTS OF

AN INTEGRATED SERVICE.

. INTERNATIONALLY THERE ARE COUNTERPARTS AND I WOULD

ENVISAGE THAT THE COORDINATED SERVICE COULD FOLLOW A SIMILAR

PATTERN TO THOSE PROVIDED BY THE NATIONAL COUNCIL FOR QUALITY AND

RELIABILITY IN THE U.K. AND BY THE E.O.Q.C., (EUROPEAN ORGANISATION

FOR QUALITY CONTROL). ;

TERMS OF REFERENCE COULD WELL INCLUDE:

. TO PROMOTE NATIONALLY AN APPRECIATION OF THE " IMPORTANCE OF QUALITY AND RELIABILITY IN AUSTRALIAN PRODUCTS AND SERVICES '

. TO FOSTER'AND WHERE NECESSARY INITIATE AND EFFECT WAYS AND MEANS OF IMPROVING OUR PRODUCTS AND SERVICES

. TO COORDINATE, CORRELATE AND ASSIST THE QUALITY AND ■ RELIABILITY ACTIVITIES OF ALL EXISTING RELATED BODIES

. TO FOSTER AND ENCOURAGE LOCAL QUALITY AND RELIABILITY GROUPS f

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; - - . TO ESTABLISH CENTRAL REFERRAL POINTS AND FACILITATE

' . INFORMATION EXCHANGE AMONGST INDIVIDUALS AND ORGAN L­

' . ' . SATIONS CONCERNED WITH QUALITY AND RELIABILITY

. .TO PROVIDE A FOCAL POINT FOR INTERNATIONAL AND ' REGIONAL LIAISON ON QUALITY AND RELIABILITY.

» * . ' . - ’ . "

' A VERY IMPORTANT DEVELOPMENT IN RECENT YEARS HAS BEEN THE

. FORMATION AND ISSUE OF AUSTRALIA! STANDARDS 1821 TO 1823 WHICH SET

OUT LEVELS OF STANDARDS FOR SUPPLIERS’ QUALITY CONTROL SYSTEMS.

THE IMMINENT WIDESPREAD APPLICATION OF THESE STANDARDS AND THEIR

INTERNATIONAL COUNTERPARTS AS A CONTRACT REQUIREMENT WILL HAVE A

• PROFOUND IMPACT ON THE EFFICIENCY AND PRODUCTIVITY OF AUSTRALIAN

INDUSTRY. IN THIS CONTEXT, SUCH A COORDINATION OF SERVICES COULD

^ PLAY A MAJOR ROLE IN ACHIEVING THE COOPERATION NECESSARY TO "

ALLEVIATE THE NEED FOR SUPPLIERS TO UNDERGO NUMEROUS AND COSTLY

ASSESSMENTS BY CUSTOMERS AND SEPARATE APPROVAL AUTHORITIES.

IF THE NEED CAN BE FIRMLY DEMONSTRATED, A COORDINATION

COULD BE SPONSORED BY THE DEPARTMENT OF PRODUCTIVITY, WHO COULD

ALSO PROVIDE A SMALL PERMANENT SECRETARIAT.

BEFORE DEVELOPING THE PROPOSAL MUCH FURTHER, IT IS

PROPOSED THAT OFFICERS OF MY DEPARTMENT ENTER INTO AN EXTENSIVE

(L PROGRAM OF CONSULTATION WITH INTERESTED PARTIES BOTH INDIVIDUALLY

. ' AND COLLECTIVELY SO THAT BOTH THE NEED FOR AND CHARACTER OF SUCH

A SERVICE CAN BE FULLY ASCERTAINED. TODAY’S DISCUSSION REPRESENTS

BUT THE FIRST STEP IN THIS PROGRAM AND I WILL BE INTERESTED IN ..

YOUR CONSIDERED REACTION. . ' .

FINALLY, MR CHAIRMAN, BEFORE WISHING THIS SEMINAR EVERY

SUCCESS, I WOULD LIKE TO MAKE THE POINT THAT QUALITY CONTROL, LIKE

PRODUCTIVITY, IS NOT CONFINED ONLY TO- SPECIFIC INDUSTRY SECTORS. IT

IS MUCH WIDER AND ALTHOUGH MY REMARKS MAY HAVE BEEN INTERPRETED .

LARGELY AS RELATING TO MANUFACTURING.INDUSTRY IT WILL BE EVIDENT FROM

THE DISCUSSION THAT WILL TAKE PLACE AT THIS SEMINAR THAT QUALITY

CONTROL TECHNIQUES HAVE APPLICATION IN A WIDE RANGE OF AREAS OF THE -ECONOMY: , . . ‘ ~ · .

' . ' ■ · . _ ............................. .. · / R

. · IN TRANSPORT, IN GOVERNMENT AGENCIES - FOR . EXAMPLE, DEALING WITH SOCIAL SERVICE ISSUES - . IN BANKING, RETAILING AND SO ON. -

THE A.O.Q.C. HAS A MAJOR TASK AHEAD OF IT AND ONE WHICH

WILL CONTINUE FOR MANY YEARS. THERE IS A GREAT NEED NOT ONLY TO

ENCOURAGE MANAGEMENT TO PAY GREATER ATTENTION TO THE CONTROL OF

QUALITY BUT ALSO TO ENSURE A CONTINUING UPGRADING OF EDUCATION

AND INDUSTRY CAPABILITY IN THE FIELD. I BELIEVE THAT THE FORESIGHT

SHOWN BY THOSE DEDICATED PERSONS WHO ESTABLISHED THE A.O.Q.C. HAS

PROVIDED AN EXTREMELY VALUABLE RESOURCE FOR AUSTRALIAN INDUSTRY.

• ·I WISH YOU A VERY SUCCESSFUL SEMINAR. '