Jones article 12/20/04 11:15 AM Page 41
Selected Quality Practices
of Small Manufacturers
STEPHEN C. JONES, TAMI L. KNOTTS, AND KAREN L. BROWN,
SOUTHWEST MISSOURI STATE UNIVERSITY
This article examines the criteria used in an independent
evaluation program to assess 1690 small manufactur-
ing enterprises (SMEs) that applied to become suppliers
for the national mass merchandising market. Success for
firms in this study meant getting their product forwarded
for buyer review. Results indicated that the forwarded
firms had a higher degree of conformity with the buyers’
criteria in each of the quality management areas. The
majority of the SMEs participating in this program were
not prepared to do business at the national level, but the
study shows that adopting quality management practices
improves a firm’s chances of success.
Key words: management, quality, supplier
© 2005, ASQ
INTRODUCTION
Quality issues have become increasingly important for
small businesses. In business-to-business (B2B) pur-
chasing relationships, buyers consistently expect higher
quality from their suppliers than in years past. One of
the downfalls in the manufacture of consumer goods
has been that the suppliers have failed to address cus-
tomer concerns about initial quality (Roper, Hewitt-
Dundas, and McFerran 1997). Townsend and Gebhardt
(1990) suggested that defining what quality means
might be important in framing the entire company.
This study examines the quality management practices
of small manufacturers and their ability to meet the
quality expectations of large retail organizations. First,
the authors discuss product and management quality
and the importance of meeting quality standards for
supplier selection. Next, they explain a supplier assess-
ment program and state the research questions. The
final section of this article provides conclusions and
research implications.
LITERATURE REVIEW
Quality Practices
During the 1980s, quality became a concern for
American manufacturers as global competition cut
into markets that previously had been dominated by
the United States. American manufacturers responded
to the loss in market share with a renewed interest in
quality manufacturing practices, and researchers
began examining the quality phenomenon. Even the
U.S. government became interested in the lag in quality
and, in 1987, established the Malcolm Baldrige
National Quality Award. Drawing on the views of quality
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Selected Quality Practices of Small Manufacturers

Figure 1 Quality components.

generally supporting the findings of Saraph, Benson,
and Schroeder (1989), subsequent researchers have
Product components Management components
(Garvin 1987) (Saraph, Benson, and Schroeder 1989)
modified and expanded their work. Black and Porter
(1996) distilled a list of 39 items into 10 broad fac-
Performance Top management leadership
tors, adding customer satisfaction, external interface
Features Role of the quality department management, and teamwork structures into the mix.
Reliability Training
Similarly, Ahire, Golhar, and Waller (1996) made
three notable changes to the 1989 study by including
Conformance Product design customer focus and benchmarking and redefining
Durability Supplier quality management “employee relations” as employee involvement,
training, and empowerment. Some concern, however,
Serviceability Process management
has been raised as to whether this quality discussion

© 2005, ASQ
Aesthetics Quality data reporting is applicable to small manufacturers (Ahire 1996;
Perceived quality Employee relations Ahire and Golhar 1996).

gurus W. Edwards Deming, J. M. Juran, and Philip B. Supplier Selection

Crosby, Garvin (1987) developed a framework for ana-
lyzing product quality. His eight dimensions are shown
in Figure 1. Saraph, Benson, and Schroeder (1989)
also examined quality practices and built a construct
of management components based on a review of the
literature (see Figure 1).
Udell, Atehortua, and Parker (1995) proposed that
both product quality and management quality are part
of the strategic process. The quality of the product may
be defined by the user, by the manufacturer, or by stan-
dards inherent in the choice of inputs or processing of
the product (Heizer and Render 2001). In lieu of a
production history, an analysis of the system used to
produce the product may serve as a proxy (Ward et al.
1998) for addressing the supplying firm’s manage-
ment practices as well as product characteristics.
Product quality has been identified as a characteristic
of success in some studies. O’Neill and Duker (1986)
found that unsuccessful firms were more likely than
successful firms to have inferior products, and Hills
and Narayana (1990) reported that a high-quality
product or service was an important success factor for
entrepreneurs. Tan and Tay (1994) also found that
quality products and services were important for
manufacturing firms in Singapore.
Quality of the supplier’s management typically
refers to technical skills, financial stability, and admin-
istrative ability (Burt, Dobler, and Starling 2003). While
From a practical standpoint, large buying organizations
(LBOs) cannot afford to enter into an unprofitable
arrangement with a low quality small firm (St. John
and Heriot 1993). Firms that cannot document specific
quality criteria do not have a chance at a contract with
an LBO. LBOs use purchasing agents to define a set of
selection criteria as a barrier to identify acceptable
suppliers and prevent poor buyer-supplier relationships
(Piercy, Katsikeas, and Cravens 1997). This philosophy
allows for the discovery of potential problems before
they occur so that future transaction problems can be
resolved without the buyer-seller relationship being
terminated (Flanagan 1994). Small manufacturers
wishing to enter the national retail market must meet
or exceed these buyer-defined standards in order to
gain a supplier relationship (Udell, Atehortua, and
Parker 1995). That set of criteria may vary—in both
number of criteria and area of concern—from one
firm or industry to the next (Li, Fun, and Hung 1997).
However, Ellram (1990) suggests that three supplier
criteria are important in any context: production
quality, on-time delivery, and performance history.
Research shows that production quality contributes to
manufacturing success (Roth and Miller 1992; Steiner
and Solem 1988; Tan and Tay 1994). Roth and Miller
(1992) also found that “superstar” manufacturing
firms or high performers placed more value on quality
programs than low-performing firms.

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Jones article 12/20/04 11:15 AM Page 43
Selected Quality Practices of Small Manufacturers
Because meeting quality standards is a competitive
requirement for small manufacturers, it is important to
understand how these firms can improve their quality
level. Roper, Hewitt-Dundas, and McFerran (1997)
suggest that small firms might benefit from develop-
ment programs to assess a company’s relative position
and market strength. Dollinger, Enz, and Daily (1991)
see development programs as being especially helpful
to minority small business owners, but the transaction
costs of a separate assessment program are prohibitively
high for most firms. This article examines the quality
management practices used in one such program to
evaluate 1690 small manufacturing enterprises (SMEs)
that applied to become suppliers for the national mass
merchandising market.
SUPPLIER ASSESSMENT
PROGRAM
Program Development
A Midwest regional university developed a supplier
selection and development program targeted at SMEs
wanting to enter the mass merchandising market.
This program was designed for two purposes. First, it
screened potential suppliers to reduce the cost and
workload for LBOs associated with an in-house
assessment program. Second, the program served as a
post-assessment educational tool for SMEs to improve
their general management practices and help them
become more attractive as suppliers. Dollinger, Enz,
and Daily (1991) found that low-level buyers are
negatively predisposed toward unsolicited products
from unknown manufacturers. A program such as
this could help bring together SMEs and LBOs and
reduce the quality perception gap.
The 34 questions used in the assessment instru-
ment for this program were developed through an
evolutionary process that began with retail buyers.
Buyers were asked to submit a list of specific manage-
ment practices that they considered critical for their
suppliers. This method followed a type of focus group
format to elicit suggestions from practitioners as
proposed by other work in the area (for example,
Spekman 1988). Their responses were compared with
current research and with responses from academics
from various disciplines (accounting, marketing, and
so on) to further refine the criteria to be used in the
program. The instrument implemented in this pro-
gram was constructed of action-specific questions
across multiple disciplines. For each question, there
were five possible levels of conformity, typically ranging
from “not at all” to “complete.” For example, to assess
the extent of a firm’s marketing plan, the following
question was asked: “Does your firm have a marketing
plan for this project?
1. We do not need a marketing plan for this project.
2. We have an informal, unwritten marketing plan.
3. We have an informal, written plan.
4. A formal, written marketing plan is in progress.
5. We have a formal, written marketing plan.”
In the original instrument, the responses were
scrambled to reduce respondent bias and ensure that
the preferred answer was not clear. The least-preferred
answer was assigned a value of 1, and the most-
preferred answer was assigned a value of 5. Firm
owners were asked to complete all 34 items of the
self-assessment instrument, and respondents were
advised that falsifying information was cause for
immediate removal from the program. The overall
management score was calculated by aggregating the
scores from all 34 items, with each one weighted
equally. A firm typically had to score at the 80 percent
level (136 points) to pass minimum buyer require-
ments. Critical weaknesses in any area (a score of 1),
however, were reported to the firm and were addressed
immediately. All 34 management assessment areas
are shown in the appendix.
Program Participants
All participating SMEs contacted a mass merchandiser
regarding their potential retail product, and the retailer
in turn referred the SMEs to the assessment program.
Study participants were required to submit a final,
packaged version of the retail product along with
documentation regarding the firm itself (financial
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Selected Quality Practices of Small Manufacturers
Figure 2 Management practice statistics by forwarded (success) status.
Management practice areas Forwarded (successful) (n=539)
Mean
Finance and accounting management 4.11
Production management 3.87
Strategic direction 3.87
Marketing management 3.61
Technology management 3.53
Note: Forwarded firm means are significantly greater than unforwarded firm means at the p < 0.001 level.
statements, quality reviews, and so on). The firm and
product data were then reviewed and evaluated by an
independent organization affiliated with the program
but not with any retail firm or buyer. Of the more
than 2100 SMEs that initially began the evaluation
process, 1690 completed both the firm self-assessment
and product evaluation. These firms make up the
sample for this study.
These 1690 firms met the basic definitions of
small firms (less than 500 employees, not dominant
in their industry, low capitalization relative to larger
firms, and so on), but the level of development varied
greatly from firm to firm. The SMEs were geographi-
cally distributed throughout the United States and
Canada with no one region dominating the sample.
While some products could be useful for B2B sale or
for use by a retailer as an internally used product (for
example, paper towels), the consumer-oriented retail
use of a product was the primary focus for the evalu-
ation program. Participation in the program was
voluntary, but the SMEs understood that a positive
program evaluation was necessary for the product to
receive subsequent review by the mass merchandiser.
Success for firms in this study meant getting their
product forwarded to a retail buyer of the firm for
review.
Scope of the Study
Both firm management practices and product char-
acteristics were critical to the final evaluation score,
44 QMJ VOL. 12, NO. 1/© 2005, ASQ
Not forwarded (unsuccessful) (n=1151)
Std. dev. Mean Std. dev.
0.66 3.57 0.99
0.65 3.42 0.72
0.59 3.36 0.74
0.66 3.17 0.69
© 2005, ASQ
0.88 2.97 0.91
but this study is limited to examining behaviors
exhibited by management to control the operations
of the firm. Additionally, as shown in the appendix,
factors such as marketing and financial manage-
ment were also a part of the firm’s self-assessment.
This study, however, focuses on those management
behaviors that were characteristic of the firm’s orien-
tation toward a quality management philosophy. For
this reason, the authors will only be concerned with a
subset of quality-related questions from the 34-item
management assessment instrument.
SELECTED QUALITY PRACTICES
This section presents a profile of selected quality
management questions used in the evaluation pro-
gram. The standards used in this study were set
through extensive discussions with retailers with
respect to their expectations and needs. The graded-
scale nature of the questions was the basis for scoring
the firm’s readiness to enter the mass merchandise
market; each question offered five alternatives, with
the middle alternative (3) meeting the average
buyer’s minimum requirements. Two unacceptable
responses and two above-minimum (including the
preferred) responses were constructed. While not all
possible responses were included, buyers considered
them to be representative of actual SME behaviors.
This scaling departs from other quality surveys in
the literature such as Powell (1995) or Spencer and
Loomba (2001).
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Selected Quality Practices of Small Manufacturers
Because the program evaluated SMEs on the basis of
the buyer-determined ratings, it would be disingenuous
to “discover” that a significant proportion of the firms
with low ratings were not forwarded to the retail buyers.
As shown in Figure 2, the means for forwarded firms
were significantly higher in all management practice
areas than for nonforwarded firms. The successful firms
in this program were more likely than unsuccessful
firms to meet buyer expectations in all areas. The
authors’ perspective in this study, however, is to explore
the nature of the quality management expectations of
buyers in large retail organizations, the extent to
which small manufacturers in this program were
prepared to meet these expectations, and possible
reasons for gaps in this scenario.
Of the 34 practices examined for participating
SMEs, a few (quality commitment, quality control
measures, in-process inspection system, first-piece
approval, continuous improvement, and manufac-
turing technology upgrades) are relevant to quality
management. The behaviors can be categorized by
the following research questions:
1. To what extent is management committed to the
use of quality management practices?
2. To what extent has management adopted industry-
standard quality control practices?
3. To what extent has management internalized
product inspection systems?
4. To what extent is management committed to
planning for continuous improvement?
5. To what extent is management committed to using
modern manufacturing technologies?
To examine each research question, the authors first
present literature on the quality practice. Then they state
the research question, present their results, and discuss
the findings in the context of the SME responses. Each
table that is presented lists the assessment statement, its
accompanying standard answer choices (in ascending
preference order), and the number of forwarded and
unforwarded firms that fell into the answer categories.
Forwarded firms were those that met the basic manage-
ment specifications in all fields (quality, marketing,
finance, and so on) as well as met product specifications.
These firms had their buyer review applications sent on
to a mass merchandiser. Buyers then examined each
product for adoption based upon firm- and market-
related criteria. Buyer adoption of a product for retail
sale was not assured simply because the SMEs product
had been forwarded on for review. In fact, only 93 of
the forwarded products (17.6 percent) eventually
passed all evaluation levels and made their way onto a
mass merchandiser’s shelves.
Quality Commitment
Research shows that small firms do not readily adopt
total quality management (TQM) (Powell 1995).
Powell explains that the full TQM philosophy entails
10 to 12 factors, some of which managers avoid
through resistance to change, risk aversion, or the
expectation that current methods are sufficient.
Financial success for TQM firms appeared most related
to the factors of management commitment, open
communication, and employee empowerment rather
than the more tangible and measurable factors,
including those related directly to quality measure-
ment. Yusof and Aspinwall (2000) also linked employee
involvement in quality to success. In SMEs, however,
quality control is often vested in a single individual
who may have other duties (Sun and Cheng 2002).
Powell (1995) concluded that while a firm may still be
successful without adopting a TQM ideology and
vocabulary, a potential customer might impose this
requirement on the manufacturer.
Greiner’s (1972) model of organizational growth
describes the smallest stage of a firm as having a simple
structure, with decision making done by the owner-
manager with an informal communication pattern. At
this stage, SMEs view leadership and people as more
important than TQM (Rahman 2001). With continu-
ously close control of the business, managers tend to
resist cumbersome structures, especially when research
finds that informal and formal quality control systems
lead to similar rates of success (Chittenden, Poutziouris,
and Mukhtar 1998). Unfortunately for these firms,
LBOs may not share the same perspective. To explore
the use of quality management practices in this study,
research question 1 is proposed.
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Selected Quality Practices of Small Manufacturers
Table 1 Quality commitment: “In our company…”.
Response
1. No formal system is in place to assure quality.
2. Employees are expected to produce quality without reward.
3. Management is primarily responsible for product quality.
4. Management and hourly employees meet regularly to discuss quality.
5. We have a formal employee reward system to promote quality.
Total
RQ1: To what extent is management committed
to the use of quality management practices?
The forwarded firms in this study exhibited a statisti-
cally higher level of commitment to quality programs
than the unforwarded firms. Table 1 shows that
almost three-fourths of forwarded firms adopted
quality systems that involved all employees, while
unforwarded firms were more likely to rely on man-
agement control of the quality process. A chi-square
procedure performed on these data showed that the
responses of forwarded firms were more likely to meet
buyer expectations than those of unforwarded firms
(p<0.01; X 2 =75.57).
These results reflect buyer expectations that SMEs
should enhance their own commitment to quality by
empowering employees to participate in a TQM envi-
ronment (Ahire, Golhar, and Waller 1996; Powell
1995). Unforwarded firms were more likely than for-
warded firms to put control of the quality process
with management and not with employees (Sun and
Cheng 2002).
Quality Control Measures
A formalized quality management program tends to
be an important factor for manufacturing success
(Roth and Miller 1992). Smaller firms, however, may
use more informal means of quality assessment, such
as inspection rather than statistical control methods,
because these firms lack personnel skilled in more
sophisticated techniques (Abdul-Aziz, Chan, and
Metcalfe 2000). These firms tend not to adopt formal
quality programs without powerful external pressure
46 QMJ VOL. 12, NO. 1/© 2005, ASQ
Not forwarded Forwarded Total
26 (2.3%) 4 (0.8%) 30 (1.8%)
128 (11.4%) 47 (8.9%) 175 (10.6%)
379 (33.8%) 86 (16.3%) 465 (28.2%)
463 (41.3%) 290 (55.1%) 753 (45.7%)
© 2005, ASQ
126 (11.2%) 99 (18.8%) 225 (13.7%)
1122 (100.0%) 526 (100.0%) 1648 (100.0%)
(McAdam and McKeown 1999; Sturkenboom, Van der
Wiele, and Brown 2001; Sun and Cheng 2002).
Guilhon, Martin, and Weill (1998) describe this atti-
tude as a restrictive, short-lived, and rarely used
approach toward quality. Sun and Cheng (2002)
illustrate the attitude clearly by noting that small
manufacturers tend to view attaining certification as
the end of their quality responsibilities.
Many SMEs indicate that the quality of the prod-
uct or service they produce is very important, but
shun formal programs (Sun and Cheng 2002). This
reluctance is due to concerns such as time, cost,
appropriateness, resources, relevance, and bureaucracy,
among others (Chittenden, Poutziouris, and Mukhtar
1998; McAdam and McKeown 1999; Sturkenboom,
Van der Wiele, and Brown 2001). Small firm owner-
managers find that formal standards stress conformity
and deemphasize other quality factors (Roper,
Hewitt-Dundas, and McFerran 1997). The standards
are not so much irrelevant as insufficient to meet
their customers’ needs. The 1994 ISO 9000 standards,
for example, were designed to document processes,
but did not assure the production of a quality product
(Sun and Cheng 2002). The implication is that this
certification process is more form than substance.
Newer ISO standards incorporate customer needs and
leadership, but the drastic change may scare small
firm managers into believing that the goal continues
to be elusive and expensive.
Guilhon, Martin, and Weill (1998) found that SME
managers think that SMEs view these standards as
documentation oriented, and Hodgetts, Kuratko, and
Hornsby (1999) noted that they believe leadership is
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Selected Quality Practices of Small Manufacturers
Table 2 Quality control measures: “We or our contract manufacturer(s)…”.
Response
1. Do not need quality control measures in our firm.
2. Use our employees to monitor quality control.
3. Use statistical process control for product inspection.
4. Use standard MIL statistical process control.
5. Use ISO 9000 or equivalent standards.
Total
deemphasized, while operations results are stressed
too significantly. Small manufacturers find that flexi-
bility is an important part of their ability to take
advantage of entrepreneurial opportunities (Kuratko,
Goodale, and Hornsby 2001), and the formality of
these quality programs often restricts that ability to
adapt. Indeed, Chittenden, Poutziouris, and Mukhtar
(1998) found an inverse relationship between for-
malization of the quality system and satisfaction with
that system in SMEs.
Sun and Cheng (2002) suggested that awards
models have operationalized quality and that some
SME managers see positive aspects of formal quality
systems. Hodgetts, Kuratko, and Hornsby (1999) com-
ment that even though Baldrige (and other awards)
applicants often do not succeed on their first attempt,
the feedback they receive is invaluable. McAdam and
McKeown (1999) found that SMEs did like the
emphasis on achieving quality standards, and other
research has found that managers are aware of the
existence of formal quality assessment programs,
but think that self-assessment of quality is for large
organizations that are applying for a major award
(Wilkes and Dale 1998). In sum, SMEs tend to disre-
gard acronym-based quality programs (Sturkenboom,
Van der Wiele, and Brown 2001). Research question 2
examines the adoption of quality control measures.
RQ2: To what extent has management adopted
industry-standard quality control measures?
In this study, both forwarded and unforwarded firms
were unlikely to make general use of more advanced
Not forwarded Forwarded Total
57 (5.1%) 8 (1.5%) 65 (3.9%)
723 (64.5%) 274 (52.0%) 997 (60.5%)
163 (14.5%) 94 (17.8%) 257 (15.6%)
47 (4.2%) 38 (7.2%) 85 (5.2%)
© 2005, ASQ
131 (11.7%) 113 (21.4%) 244 (14.8%)
1121 (100.0%) 527 (100.0%) 1648 (100.0%)
quality standards; however, forwarded firms were
almost twice as likely to adopt standards like ISO
9000 or MIL processes (28.6 percent to 15.9 percent).
Table 2 shows the results of the firms’ responses to
this question. A chi-square test confirmed that for-
warded firms were statistically more likely to adopt
advanced quality control programs than unforwarded
firms (X 2 =52.70, p<0.01). Even so, fewer than half
of the firms in this program met the minimum
expectations of buyers for this area.
These results seem to support the Sturkenboom, Van
der Wiele, and Brown (2001) conclusion that SMEs are
more reluctant than large firms to adopt formal quality
programs. They also seem to support the conclusions of
Sun and Cheng (2002) and Kuratko, Goodale, and
Hornsby (2001) that these smaller firms shun formality
and embrace flexibility concerning quality standards.
Internalized Product Inspection
Systems
Although small firms may avoid formal programs,
they do not ignore quality. They tend to employ
Zipkin’s (1991) selective “toolbox” approach rather
than embracing the entire philosophy of any particu-
lar program. For example, Abdul-Aziz, Chan, and
Metcalfe (2000) found that use of an in-process
inspection system (along with pre- and post-process
inspection) was critical for success. Yusof and
Aspinwall (2000) noted such quality practices as
process improvement, statistical process control (SPC),
and employee involvement in the TQM program were
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Selected Quality Practices of Small Manufacturers

Table 3a In-process inspection system: “We or our contract manufacturer(s) have…”.

Response Not forwarded Forwarded Total

1. No in-process inspection systems in use at this time. 59 (5.2%) 8 (1.5%) 67 (4.1%)

2. An informal in-process inspection system in use part of the time. 52 (4.6%) 8 (1.5%) 60 (3.6%)

3. An informal in-process inspection system in use all of the time. 492 (43.8%) 157 (29.8%) 649 (39.3%)

4. A formal in-process inspection system in use some of the time. 36 (3.2%) 15 (2.8%) 51 (3.1%)

© 2005, ASQ
5. A formal in-process inspection system in use at all times. 485 (43.1%) 339 (64.3%) 824 (49.9%)

Total 1124 (100.0%) 527 (100.0%) 1651 (100.0%)

Table 3b First-piece approval: “At our firm or at our contract manufacturer’s facility…”.
Response Not forwarded Forwarded Total

1. We have no first-piece approval system. 118 (10.5%) 17 (3.2%) 135 (8.2%)

2. Only rarely do we conduct first-piece inspections. 32 (2.9%) 5 (1.0%) 37 (2.2%)

3. First-piece inspection is done only with a difficult setup. 79 (7.1%) 32 (6.1%) 111 (6.7%)

4. First-piece inspection occurs every other production cycle. 65 (5.8%) 27 (5.1%) 92 (5.6%)

© 2005, ASQ
5. Each production cycle has a first-piece approval system. 825 (73.7%) 445 (84.6%) 1270 (77.2%)

Total 1119 (100.0%) 526 (100.0%) 1645 (100.0%)

characteristic of successful smaller manufacturers.
Hodgetts, Kuratko, and Hornsby (1999) found that
Baldrige Award applicants tended to use Six Sigma, a
process control program with exceptionally rigorous
statistical standards, allowing no more than 3.4 defec-
tive parts per million. St. John and Heriot (1993)
found that some firms used an informal control system
initiated by ownership rather than SPC and/or control
charts. These firms were less likely to be bypassed
entirely than those with no quality system at all.
Small firms often place an emphasis on quality
information rather than the quality assurance prized
by large manufacturing firms (Sun and Cheng 2002).
They also tend to measure customer satisfaction with
traditional methods such as customer surveys, along
with nontraditional approaches such as counting the
number of customer complaints and counting the
number of items returned under warranty (Kuratko et
al. 2001). Another qualitative control technique, first-
piece approval, reflects the tendency of firms to
inspect the initial output of their production cycles.
Research question 3 examines the use of both in-
process inspection and first-piece approval in an
internalized quality control system.
RQ3: To what extent has management inter-
nalized product inspection systems?
Table 3a displays the tendency of this study’s partici-
pating firms to use an in-process control system. The
results of this study show that more than two-thirds of
the forwarded firms used a formalized in-process
inspection system, while fewer than half of the unfor-
warded firms admitted to having such a system. In fact,
more unforwarded firms used informal systems than
formal systems (48.4 percent to 46.3 percent), but
both sets of firms were unlikely to admit to using no
in-process inspection system at all. A chi-square test
on these data showed that forwarded firms had a sta-
tistically higher response level to this question than
unforwarded firms at the p<0.01 level (X 2 =72.07).

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Selected Quality Practices of Small Manufacturers
Table 4 Continuous improvement: “We have…”.
Response
1. No continuous improvement program (CIP) at this time.
2. An informal CIP, but it is not yet comprehensive.
3. An informal but comprehensive CIP.
4. A formal CIP, but it is not yet comprehensive.
5. A formal CIP with a comprehensive plan.
Total
Table 3b shows the results of firms’ responses to
having a first-piece approval system. While a chi-
square test showed that forwarded firms had a
statistically higher usage of this quality system
( X 2 = 35.39, p < 0.01), both sets of firms reported
having formalized first-piece approval processes as
the norm. Almost 80 percent of unforwarded firms
and almost 90 percent of forwarded firms reported
using first-piece approval at least every other cycle,
and most of these firms reported using the system for
each cycle. However, only 10 percent of forwarded
firms were unlikely to use this system regularly, and
that same percentage of unforwarded firms reported
having no system at all.
The results of this study strongly support the find-
ings of Abdul-Aziz, Chan, and Metcalfe (2000) in that
the successful firms in this program were more likely
to use in-process inspection than unsuccessful firms.
However, all firms tended to use a first-piece approval
system even though the percentage of forwarded
firms using this technique was statistically higher
than the percentage of unsuccessful ones. Perhaps
Zipkin’s (1991) toolbox approach is supported by this
method because some techniques were used by all
firms, but no consistent pattern was found.
Continuous Improvement
While large firms use training to support continuous
improvement, small firms tend to rely on traditional
incentive and suggestion programs (Sun and Cheng
2002). Yusof and Aspinwall (2000) found that few
Not forwarded Forwarded Total
228 (20.2%) 38 (7.2%) 266 (16.1%)
254 (22.5%) 109 (20.8%) 363 (21.9%)
417 (36.9%) 207 (39.4%) 624 (37.7%)
42 (3.7%) 28 (5.3%) 70 (4.2%)
© 2005, ASQ
189 (16.7%) 143 (27.2%) 332 (20.1%)
1130 (100.0%) 525 (100.0%) 1655 (100.0%)
small firms use continuous improvement tools and
techniques. In addition, employees may not recognize
the difference between continuous improvement and
productivity improvement programs; they are often
wary of efforts that may result in the loss of jobs
(Townsend and Gebhardt 1990). Even managers may
be disillusioned by improvement efforts, as the results
may diminish over time (Lillrank, Shani, and
Lindberg 2001). Wilkes and Dale (1998) suggest that
SMEs need continuous improvement training and a
development guide that outlines critical practices. To
examine management’s commitment to continuous
improvement, research question 4 is proposed.
RQ4: To what extent is management committed
to planning for continuous improvement?
Formal continuous improvement programs (CIPs)
were unlikely to be used by either set of firms, but
chi-square analysis showed that forwarded firms in
this program reported a statistically higher level of
usage than unforwarded firms (X 2 =60.39, p<0.01).
About one-third of forwarded firms reported using a
formalized CIP, while fewer than 20 percent of unfor-
warded firms reported similar usage. However, similar
percentages of both types of firms used informal pro-
grams, although unforwarded firms were twice as
likely to have no CIP at all. Table 4 shows the results
of the firms’ responses to this question.
These results strongly support Yusof and Aspinwall
(2000) showing that CIPs were uncommon for both
forwarded and unforwarded firms. While the differ-
ences between forwarded and unforwarded firms are
www.asq.org 49
Jones article 12/20/04 11:15 AM Page 50
Selected Quality Practices of Small Manufacturers
Table 5 Manufacturing technology (MT) upgrades: “We…”.
Response
1. Have no plans to upgrade our MT.
2. Hold informal reviews when the need arises.
3. Perform informal reviews of our MT annually.
4. Conduct formal reviews every two years or so.
5. Have a formal review of our MT annually.
Total
statistically significant, the results are still disap-
pointing. Wilkes and Dale’s (1998) suggestion for a
quality-training program for SMEs is probably justi-
fied. The program discussed in this study could be the
first step in a development guide for continuous
improvement.
Manufacturing Technology
Upgrades
Successful firms are more likely than unsuccessful
firms to update their production technology (Steiner
and Solem 1988). Steiner and Solem found that 50
percent of the successful firms in their study updated
production technology, while only 13 percent of
unsuccessful firms did. Both sets of firms acknowl-
edged technology changes in their industry, but
unsuccessful firms did not have the resources to
change. Ariss, Raghunathan, and Kunnathar (2000)
echoed the importance of advanced technology in
assisting manufacturing designers in maintaining
higher quality production levels; interestingly, few of
the firms in their study found that advanced manu-
facturing technology (AMT) was influential in design
quality, despite the existence of CAD/CAM.
Small-firm managers may perceive that AMT (like
quality programs) has more benefits for large firms
than for SMEs (Ariss, Raghunathan, and Kunnathar
2000). Schroeder, Gopinath, and Congden (1989)
found that AMT led to greater precision but not higher
quality; in fact, improving quality was actually a pre-
requisite to AMT. In addition to the large investment in
50 QMJ VOL. 12, NO. 1/© 2005, ASQ
Not forwarded Forwarded Total
77 (6.9%) 11 (2.1%) 88 (5.4%)
590 (52.9%) 195 (37.1%) 785 (47.8%)
181 (16.2%) 115 (21.9%) 296 (18.0%)
36 (3.2%) 16 (3.0%) 52 (3.2%)
© 2005, ASQ
232 (20.8%) 188 (35.8%) 420 (25.6%)
1116 (100.0%) 525 (100.0%) 1641 (100.0%)
technology, firms must also allocate resources toward
quality programs, training, and technically literate
workers. These costs may cause SMEs to gamble the
life of the firm on a specific technology choice
(Schroeder, Gopinath, and Congden 1989). As in the
case of quality certification, SMEs tend to invest only
when required by customer demands and market
forces (Schroeder, Congden, and Gopinath 1995).
Research question 5 explores the use of advanced
technology by small manufacturers.
RQ5: To what extent is management committed
to using modern manufacturing technologies?
More than three-fourths of the unforwarded firms in
this study reported either having no plans to upgrade
their manufacturing technology or having only
informal periodic reviews (76 percent). Forwarded
firms, on the other hand, had a much higher rate of
adopting formal review programs (38.8 percent),
with more than one-third of these firms performing
this review annually. A chi-square test on the data
showed that the responses of forwarded firms were
significantly higher than those of unforwarded firms
( X 2 = 71.73, p < 0.01). However, about one-third of
the forwarded firms chose to review their manage-
ment technology informally on an ad hoc basis.
Table 5 shows the results of firms’ responses to this
question.
While these results seem to support Steiner and
Solem’s (1988) contention that successful firms
update their production technology regularly, they
also seem to echo Schroeder, Congden, and Gopinath
Jones article 12/20/04 11:15 AM Page 51
Selected Quality Practices of Small Manufacturers
(1995) in that even successful firms may not change
their technology until the market warrants it. Perhaps
as Ariss, Raghunathan, and Kunnathar (2000) found,
these smaller firms thought that the benefits to
change were minimal.
CONCLUSIONS AND IMPLICATIONS
This article explored the nature of the quality man-
agement expectations of buyers in large retail organi-
zations, the extent to which small manufacturers in
this program were prepared to meet these expecta-
tions, and possible reasons for gaps in this scenario.
The quality management practices the authors
examined were expectations specified by the mass
retailer marketers themselves and are indicative of
current quality techniques. Both large and small
manufacturers were expected to meet these standards
to be suppliers.
The successful firms in this study — those that
were forwarded on to buyers — were significantly
more likely to meet these standards than unsuccess-
ful firms. While forwarded firms adopted a higher
level of quality commitment than unforwarded firms,
this does not mean that they met buyer expectations
across the board. In some cases, even successful firms
only met minimal qualifications for buyer accept-
ance. Unsuccessful firms, however, consistently failed
to meet buyer expectations in multiple quality areas,
and a failing performance in the quality area mir-
rored a failing performance in each of the other
management assessment areas. Overall, successful
firms met expectations in all areas, and unsuccessful
firms did not.
The literature seems to indicate that there are sev-
eral reasons why firms do not embrace formal quality
programs and practices, including scarce resources,
poorly perceived benefits, and weak management
commitment. Any or all of these could explain why
firms in this study chose not to adopt certain quality
practices. However, there were some positive findings.
While even successful firms found it difficult to adapt
to higher standards (for example, ISO 9000), both suc-
cessful and unsuccessful firms made use of practices
that seemed more within their grasp (in-process
inspection and first-piece approval).
Perhaps future research should examine the stan-
dards needed for success in a particular market seg-
ment and in developing guidelines to help SMEs meet
those particular standards. This study looked at quality
standards that were deemed critical to success in the
mass merchandising market. These and other stan-
dards may or may not be critical to international,
regional, or local markets or for niche or industrial
customers. Future research could also examine the
usefulness of development programs that identify
quality weaknesses and help SMEs adapt to market
expectations.
ACKNOWLEDGMENT
The authors would like to thank Dr. Gerald G. Udell, director of the
Center for Business & Economic Development at Southwest Missouri
State University, for his valuable contributions to this article.
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Market demand
BIOGRAPHIES Competitive product analysis
Promotional plan
Stephen C. Jones is an assistant professor of management at Company orientation
Southwest Missouri State University. He received his doctorate in
Strategic direction Mission statement
organizational theory from the University of North Texas. Jones Job description
has published in the Journal of Vocational Education Research, the Employee input
Journal of Business & Entrepreneurship, and the New England Management experience
Journal of Entrepreneurship. His research interests include small *Quality commitment
business management and business ethics and social responsibility. Firm’s primary objective
Use of consultants
He can be reached by e-mail at scj904f@smsu.edu .
Business plan
Board of directors
Tami L. Knotts is an assistant professor of management at
Board involvement
Southwest Missouri State University. She received her D.B.A. in
management from Louisiana Tech University. Knotts has published Technology Product testing
in the Employee Responsibilities and Rights Journal, Research and development
Psychological Reports, and the New England Journal of *Manufacturing technology (MT) upgrades
Entrepreneurship. Her research interests include small business
Production Planning and control systems
management and religious involvement in the workplace. Knotts
Delivery schedule reliability
can be reached by e-mail at tlk090f@smsu.edu . *Quality control measures
Maintenance program
Karen L. Brown is an assistant professor of management at Cost containment
Southwest Missouri State University. She received her D.B.A. in *First piece approval
management from Louisiana Tech University. Brown has published *In-process inspection system
in OMEGA: The International Journal of Management Science, The *Continuous improvement
International Journal of Operations and Production Management,
Finance and Use of cash flow analysis
and Project Management Journal. Her research interests include accounting Budgetary planning cycle
operational performance measures and supply management. Budget update cycle
Brown can be reached by e-mail at klb530f@smsu.edu . Cost accounting
General accounting functions
© 2005, ASQ

Financial planning

Note: (*) Signifies quality areas discussed in this article.

www.asq.org 53