Quality Improvement Program, star Disk Corporation manufactures computer disk drives that it sells under its own brand name to computer manufac¬ turers and to large retail outlets. Several years ago the company’s sales volume and market share began to deteriorate. Top management became concerned and initiated an investigation to determine the causes of the decline. Based on a survey of customers, poor product quality was determined to be a major cause of the com¬ pany’s declining sales. Immediately, top management issued a statement to all company personnel that the company’s most important mission is the manufacture of the world’s highest quality disk drives. A campaign was initiated, the supervisor of the most productive manufacturing department was placed in charge of the quality improvement program and given a pay raise, and banners were posted throughout the company pro¬ claiming Star disk drives to be the highest quality disk drives in the world. Inspection of the product was increased, and units that did not meet the quality stan¬ dard were repaired or discarded if not repairable.

For the next few years sales continued to decline. Despite the fact that new advanced-technology products were introduced and top management con¬ tinued to stress the importance of quality, promo¬ tions and bonuses appeared to be awarded to individuals who were high-volume producers. The supervisor of the quality program could not get the cooperation of the design engineers (who were pri¬ marily concerned with designing new technologies into the product) or the production department man¬ agers (who appeared to be primarily concerned with meeting production quotas). The number of units of product rejected continued to rise, and the amount of rework increased. Production cost per unit of product climbed to a point that exceeded the sales price of identical units sold by competitors, and product quality did not improve substantially. As a result of continuing declining sales, the company was forced to lay off 30% of its work force, and top management is now facing the possibility of bank¬ ruptcy. LO6 Required: Explain why the quality improvement efforts at Star Disk Corporation failed and make suggestions for turning the problem around.