This is another topic I wanted to write about for a fairly long time – Quality. When I think about quality – the first thing that comes to mind is cars. In fact just about 10 years ago (I was buying my first car back then) the quality was a big issue. I took some comfort though in knowing that there are lemon laws were around, and got a relatively trouble-free Nissan.
The situation has much changed since then. As this article reports:
The newfound emphasis on quality has closed the gap between best and worst in the industry. In 1998, J.D. Power and Associates, which surveys owners about trouble with their cars after three years, found an industry average of 278 problems per 100 vehicles. By this year, the number fell to 132.
In 1998, the most reliable car had 92 problems per 100 vehicles, while the least reliable had 517, a gap of 425. This year the gap closed to 284 problems.
As the car industry seems to have solved its quality problems, they still emerge at other, sometimes unexpected fields. This one is from Federal reserve and has to do with brand new $100 bills.
Total face value of… $110 Billion. In a nutshell, about year and a half ago, the Fed wanted to print new Benjamins, but a peculiar creasing problem showed up that resulted in randomly dispersed unusable bills. This video describes the problem:
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Year and a half later, still no new Benjamins. The last update from the Fed is dated June 2011, here it is. Now, why is it taking so long and how to avoid this kind of mishaps? First, there are lots of bills -1.1 billion of them, or 11 million packs @100 bills each. It is not exactly clear what is Fed doing with all of them, but it seems that they are still trying to identify which ones are usable. This sounds awfully like fixing a defective car after it’s got off the production line. GM and Ford were doing that and it proved to be quite ineffective and costly. Most importantly, the rework is done after the production process. An alternative would be to build in quality controls into the production process, monitor the process continuously, and stop it if it starts producing defective items. Of course with the product like bank notes, you really need to have 100% quality, so the final inspection is hard to avoid. Still the glitch could have been caught much earlier and the pile of unusable bills would be much smaller.