Continuous Quality Improvement as a Survival Strategy: The Southern Pacific Experience

Subsequently, a rather successful joint quality improvement program was developed with Monsanto. The latter's CQI program required vendors to have a CQI program. If SP had not been moving in this direction, they might very well have lost a major customer simply because they weren't involved in CQI. SP began its own supplier quality certification program in 1991.

Indeed, because the company is privately held, this same group makes up a majority of the Board of Directors. This equivalency makes a separate designation of “quality council” unnecessary.

Some nontransportation divisions have not been pressured to develop programs.

Reduce the cost of non-conformance; improve safety; improve locomotive reliability; decrease derailments.

Until 1993, the top award to teams, beyond the honor of presenting their project, was “the President's Cup,” which is, in fact, a coffee mug on a walnut base.

Sees Jacobson continuous quality improvement as requiring continuous learning. His goal is for each of his staff to have twelve hours of formal training each year.