Quality Rules! This is the slogan at Mason Motors, a company that supplies engine components to major automotive firms. Mason’s management uses this slogan to communicate the message that quality is a critical success factor for the firm’s survival. In particular, automotive firms, which account for virtually all of Mason’s sales, will pay only for good items. These automotive firms also impose substantial penalties if component quality falls below prespecified levels.
Because of Just-in-Time practices, the automotive firms take an even dimmer view of missed shipments. Finally, Mason’s engineers are expected to attend “quality school” to learn and implement quality control procedures, as well as participate in “cost engineering” the next generation of components.
Mason is struggling with how best to measure the intangible item, quality. Brainstorming generates numerous measures from the functional areas:
Production: Percent reworked, scrap rates
Sales: Average outgoing quality rate, percent on time delivery
Accounting: Penalty payments for month
Operations: Cycle time from receipt of order to delivery
Management is confused because each of the suggested measures seems to measure quality. Yet, management knows that if they measure all items, no single item will be most important, and it will be difficult to drive change throughout the organization.
They have requested your help in sorting out how to translate a vaguely defined success factor. “Quality,” into a measure that they could use to motivate, direct, and evaluate employees.

Required:
Advise management as to their best choice. Please be sure to argue regarding the costs and benefits of using separate measures for each department, as well as employing multiple measures to measure the differing dimensions of quality.