Our Government has established a process to ensure continual improvement and the sharing of knowledge among all organizations within our country. This process is the Malcolm Baldrige National Quality Award. The Award provides recognition for organizations that have achieved preeminent quality leadership and provides a process for sharing knowledge among all U.S. organizations. With respect to other areas in which our Government can help improve the competitiveness of American industry, the chairman of the board and chief executive office of Eastman Kodak, Colby Chandler, made the following statement, and I quote: "In the last decade manufacturing has reordered our priorities, putting a premium on long-term results and quality. We are doing everything that we can to compete, and will be better able to do so when our government lets us compete. We are seeking neither protectionism nor a handout. We are seeking economic policies which promote economic growth, not just for manufacturing, but for the economy at large. We need an informed and thoughtful debate on these matters. We face very hard choices and difficult adjustments." Thank you. [The prepared statement of Mr. Jackson follows:] U.S. House of Representatives Eastman Chemicals Division of Eastman Kodak Company Eastman Chemicals Division, a division of Eastman Kodak Company, has a proud history of meeting customer needs with products and services that are high in quality and value. However, we recognize that quality that was good enough yesterday may not be good enough today. Likewise, products that meet today's quality standards will not meet tomorrow's requirements. Therefore, Eastman Chemicals Division (ECD) is taking aggressive measures to continually improve the quality of its products and services. We ECD produces most of its products in a large number of diversified processes with highly integrated material flow at four major United States plant locations and operates several other U.S. and offshore plants. Total employment is 16,350. In addition to the four major U.S. manufacturing sites, ECD has a research and development organization, a marketing organization, and six business centers. are managed through a matrix of functional line organizations and business centers organized by product streams or special end-use products. ECD is primarily a supplier to industrial customers. Our goal is to satisfy customers by being the leader in product quality on the basis of fitness-for-use and consistency, as well as the leader in product value on the basis of being the best choice for competitive cost combined with superior reliability, technical service, customer service, and knowledge of the market in customer/supplier relationships. We strive to be an exemplary corporate citizen concerned about our employees, the environment, and the communities in which our operations are located. ECD is achieving excellence and meeting tomorrow's challenges by effectively using quality management principles. Quality management is being used at all levels and in all functions of the organization as the system for managing our business. ECD is achieving its mission and vision through the broad application of a "quality control and improvement model." By doing this, we are attaining our quality goal to be the leader in product quality and value. - The Eastman Chemicals Division started the implementation of quality management concepts as a result of losing market share in a major product during the late 70's. The strategy that was used to regain the market share focused on improving quality of products as well as improving the quality of managing our processes. The result of this effort allowed us to regain our market share position but, more importantly, demonstrated that focusing on improving quality also yields improvements in productivity and reductions in manufacturing costs. Our successful experience in the application of quality management concepts resulted in a massive management-led project to implement quality management concepts in every aspect of managing the Eastman Chemicals Division. Page 2 This journey began with the development of the Eastman Chemicals Division Quality Policy. This document establishes the quality goal of ECD to be the leader in product quality and value. In addition to the quality goal, the policy outlines our management principles and key elements that guide the development and application of management processes throughout the organization. A primary management principle is continual improvement. We must never be satisfied with our current level of performance. We achieve improvement through two distinct and essential processes. First, through the routine control of our processes, we will continually achieve improvement by identifying and permanently removing causes of deviations from desired levels. This process utilizes current resources already allocated for operations. Second, a further improvement process consists of allocating special resources to bring about major shifts in desired levels. This improvement process may require new or improved technology. It is essential that all resources be properly allocated to achieve continual improvements. Defect Our second management principle is defect prevention. prevention is achieved through job design, procedures, and process control. This principle ensures consistency in our routine operations resulting in high quality, defect-free products and services. The ECD Operational Policy, a component of our Quality Policy, gives top priority to establishing process capability and controlling every process to the desired target within the process capability. This resulted in ECD defining quality as uniformity about the desired target. As a result of the successful application of this Operational Policy, 99.5% of the products shipped during 1987 met customers' fitness requirements. In comparing ECD to other chemical companies, seven out of ten customers rate us #1. Key elements of our Quality Policy include management leadership and involvement; teamwork; involvement of all employees in continual improvement; and training of all personnel in job functions, quality responsibilities, quality disciplines, and statistical methods. Our Quality Management Process is founded on the premise that all employees are managers of processes. Thus, everyone is responsible for leadership and involvement in the operation and improvement of the processes under his or her control. Management is responsible for creating a vision for the future and an environment which facilitates the overall process. Management is also responsible for obtaining total involvement, for demonstrating leadership in carrying out its functions in a defect-free manner, and for providing the resources that will make continual improvement a "way of life." Management leadership and involvement starts with the general manager Page 3 of ECD and his management team providing a management role model that is being repeated throughout the organization at all levels including at the technician and operator level. Teamwork exists when members of the company work together to achieve common goals. There are two specific types of teams used to carry out the management principles of continual improvement and defect prevention. The first type of team is referred to as the management team. These teams generally consist of a supervisor and those reporting directly to the supervisor. These teams have the primary responsibilities for operating the processes for achieving the improvements that evolve through process control and defect prevention. These teams are also responsible for meeting regularly to review the team's performance, identifying improvement opportunities within their management systems, and establishing quality improvement teams. The second type of team is a problem-sovling or quality improvement team. These teams are formed for a specific purpose and cansist of members making unique contributions. These teams may cross organizational boundaries and management levels and are dissolved when the purpose or task is achieved. The strength of an organization is the full utilization of the knowledge and skills of the people. Training is an essential strategy for improving knowledge and skills. Training and the search for knowledge are continual processes requiring internal and external training resources. Our management process is designed to enhance the quality of worklife by providing each employee with the appropriate training, tools, and environment to enable meaningful participation in the management of the Eastman Chemicals Division. ECD recognized over seven years ago the importance to both the local and national economy of encouraging and facilitating the spread of quality management techniques. An executive vice president of one of our largest units compared it to our treatment of safety information as an area in which the public good outweighs any short-term competitive advantage. This recognizes that in the long term, ECD's best interest is served by strengthening the local and national economies generally and our customers' and suppliers' operations specifically. Therefore, ECD has allocated resources to meet the needs of specific outside organizations. Members of management and quality facilitators/consultants have given quality presentations and quality training programs to customers/suppliers as a part of our customer/supplier partnership program. Page 4 With encouragement from ECD management, local presidents of 15 technical and professional societies combined to form the Appalachian Quality Council to promote the quality concepts in the local community. Through their efforts, a Quality First program has been under way for two years, with over 70 local enterprises having participated in the Transformation of American Industry training model. This program has resulted in documented savings in the millions of dollars in improvements for these organizations. In addition, our company has assisted the Kingsport Area Chamber of Commerce in its quest to establish a National Center for Quality. The mission of the NCQ is to create communities of excellence by achieving improvements in quality and productivity in government, business, industry, and service organizations. The National Center for Quality will complement the Quality First program, which is project oriented, by providing the training for managers and executives in order to sustain the quality movement beyond the project phase. The Center will be committed to providing training and consulting to communities regardless of their location. This center offers an opportunity for federal government assistance in supporting the technology for training government and business leaders in the implementation of quality management principles. The staffs of Congressmen Quillen and Ritter are aware of the work being done and are looking for ways which the federal government can be supportive. The Eastman Chemicals Division is on a journey to improve our competitiveness on an international basis. As a result of our focus on quality improvement, the following performance factors have been realized since 1985: In achieving these reuslts, we have also attained the following 1987 indicators of excellence: Quality of products Quality of service Customer satisfaction 99.5% met customer fitness requirements Within ECD we are using many quality management techniques that are unique to our industry. With quality as a way of life throughout our entire organization, we are using aggressive, innovative methods to continually improve the quality of our products and services. |