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96 CHAPTER 3 • SubSTiTuTES foR STRATEgy

customers testifying to its product’s quality and durability. The following story from one engi-
neer is typical:
‘I was installing a new piece of equipment in a sewage treatment plant. One morning, as I was crossing
the bridge over the aeration tank of the treatment plant, I saw that the setting on one of the instru-
ments was incorrect. I took out my Swiss Army knife to make the necessary adjustment. The knife
slipped out of my hand and fell into the aeration tank whose function is to oxidise organic waste –
the oxidising environment which is extremely corrosive to metals. Four years later, I received a small
parcel with a note from the supervisor of the plant. They had emptied the aeration tank and found my
knife at the bottom. The parcel contained the knife, which was in astonishingly good condition. The
plastic casing and cover had only suffered very minor damage. I can assure you that very few products
could have survived treatment like this, the components would have dissolved or simply disappeared.’
Today, the Victorinox factory assembles 27,000 knives a day (plus nearly 100,000 other items).
More than 450 steps are required in the knife’s manufacture. But times have not been easy for
the Victorinox Company. Airport security restrictions after 9/11 hit sales of the knife. ‘Our sales
plummeted almost overnight’, said Carl Elsener, the company’s CEO and the great-grandson of
its founder. ‘All airport shops were suddenly banned from selling knives and we lost 30 per cent of our
income that came from spontaneous airport purchases.’ But rather than shut down some of its pro-
duction lines and get rid of a considerable chunk of its workforce to cut costs (the factory hasn’t
fired a single person for economic reasons in all of the 125 years of its existence), Victorinox
developed new products including laser-fronted ballpoint pens, bladeless ‘in-flight’ knives and
Swiss Memory and Swiss Flash foldable USB drives. Another major threat to sales that has been
growing is the appearance on the market of fake ‘Swiss Army’ knives, made mostly in China.
Many of them look similar to the original; they even have the familiar Swiss cross on the handle.
So what is their defence against these fakes? ‘Quality’, says Carl Elsener. ‘We have exhausted all
legal means for the brand protection of our popular products. Our best means of protection is quality,
which remains unsurpassed and speaks louder than words.’ And the three components of the ‘Vic-
torinox total quality management system’ is at the heart of this quality defence. First, incoming
materials are checked to conform to quality specifications. Nonconforming products are iden-
tified, evaluated and reviewed according to set procedures. Only steel and plastic that comply
with Victorinox’s rigorous quality standards are used in the manufacturing of the products.
Second, process control is employed at all stages of the production process. Third, the Final
Inspection Department employs 50–60 people who are responsible for ensuring that all prod-
ucts conform to requirements. Any nonconforming products are isolated and identified. Non-
conforming parts are repaired or replaced at the repair department.

Criticisms of Tqm
Many of the criticisms of TQM tend to fall into two slightly conflicting categories. The
first is that, historically, many TQM initiatives fail – or at least are not entirely successful.
The second is that, even if TQM is not the label given to improvement initiatives, many
of the elements of TQM, such as continuous improvement, have now become routine.
As far as the first criticism is concerned, not all TQM initiatives that are launched,
often with high expectations, will go on to have a major impact on performance. Com-
panies who were in the vanguard of the TQM movement, such as Hewlett-Packard,
admit that at one time they pushed quality for its own sake, and have shifted too much
responsibility down to the shop floor. Similarly The Economist magazine, reporting on
some companies’ disillusionment with their experiences, quoted from several surveys.
For example:

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