The need of the time is how you are equipped


Mar 08 - 14, 2004





Today's, World Trade Organization (WTO) is very common for us; everywhere in Pakistan the debates are in full swing with supportive and non-supportive arguments. The clouds of fears, misconceptions and misunderstanding about WTO are felt. In our discussion we will try to find out what is it related challenges and solutions.

WORLD TRADE ORGANIZATION: The WTO established in 1995 and it is only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. Almost the 90% of world is its member, the decision-making are truly by consensus. General Council and numbers of other committees try to analyze the various aspect of trade among the nations working under it.

BENEFITS OF WTO: The main objective of WTO is to facilitate the producers of goods and services, exporters and importers to conduct their business in friendly environment. This organization also desires to eliminate discriminations, trade barriers and unfair activities. Everyone has scarce resources to meet his unlimited desires. Everyone wants to deal with necessities and enjoys luxuries within his available resources. This is not only beneficial for producer of goods and services but also for consumer. Consumer can enjoy more choice, broader range of quality products to choose from and competitive environment may lead to low prices.

WTO provides opportunity to Pakistanis producers and exporters to export their goods and services to other countries. At the national level exports can increase governmental revenues which adds to national income and translates into better standards of living to its people. As a whole the economy grows, economic growth means more jobs. European Union calculates that creation of the single market means it will provide 300,000 to 900,000 more jobs. The ten major benefits of the WTO trading system are listed as under:

o The system helps to keep the peace.
o The system allows disputes to be handled constructively.
o A system based on rules rather than power makes life easier for all.
o Freer trade cuts the cost of living.
o It gives consumers more choice, and a broader range of products to choose from.
o Trade raises incomes.
o Trade stimulates economic growth, and that can be good news for employment.
o The basic principles make the system economically more efficient, and they cut costs.
o The system shields governments from narrow interests.
o The system encourages good governance.

MISUNDERSTANDINGS OF WTO: The few misunderstanding about the WTO are spreading:-

o The WTO serves only the interest of multinational corporations.
o WTO is a stacked court.
o It dictates governments' policies that lead to undermining national sovereignty.
o It destroys jobs, widens the gap between rich and poor.
o The WTO is only concerned about commercial interests. This takes priority over development.
o In the WTO, commercial interests take priority over environmental protection.
o WTO is killing people. The WTO dictates governments on issues such as food safety, and human health and safety. Again commercial interests override.
o Weaker countries have no choice; they are forced to join the WTO.
o Small countries are powerless in the WTO.
o The WTO is undemocratic.

CURRENT AND FUTURE CHALLENGES: Although the issues of higher power rates and taxes are very important, yet we put aside these issues for a while. There is another major element, which highly influences on the price that is quality. The future market competitive advantage will depend on price and quality advantage as compared to the current quota regime. Pakistani manufacturers have for long time under quota regime produced goods and services of substandard quality for its people. The real challenge today is to ensure that produces/manufactures, industrialists and managers do not lose sight of the basic principles on which quality management and performance excellence are based. The domestic and international competition has made organizations around the world realize that their survival depends on high quality. Many countries such as Korea, India and Pakistan are mounting national efforts to increase quality awareness, including conferences, seminars, radio shows, school essay contests, and pamphlet distribution. In the case of Pakistan, it has established Pakistan Institute of Quality Control (PIQC) in 1991. PIQC has provided training to around 15000 persons and practical facilitation/consulting services to more than 200 firms within and outside Pakistan. PIQC is also conducting postgraduate level professional diploma/certificate programs in collaboration with the NED Engineering University Karachi and the National University of Sciences and Technology (NUST); to make awareness in the industry and preparing future managers. Spain and Brazil are encouraging the publication of quality books in their native language to make them more accessible. These trends will only increase the level of competition in the future.

WHAT IS QUALITY? Competitive Advantage means a firm's ability to achieve market superiority. The powerful tool, which enables to compete with challenges, is quality. Quality is a confusing concept, because people view quality in relation to different criteria based on their individual thinking. Neither consultants nor business professionals agree on a universal definition of quality. A study that asked managers of 86 firms in the eastern United States to define quality produced several dozen different responses, including the Perfection, Consistency, Eliminating Waste, Speed of delivery, Compliance with polices and procedure, Providing a good, usable product, Doing it right the first time, Delighting or pleasing customers and Total customer service and satisfactory.

Quality can be judgmental which is "both absolute and universally recognizable, a mark of uncompromising standards and high achievement" in products and services.

Product-based quality would be a function of a specific, measurable variable and that differences in quality reflect differences in quantity of some product attribute, such as in the number of paper sheets in a ream or in the number of common pins in a box. That is higher levels or amounts of precut characteristics are equivalent to higher quality. As a result, quality is often mistakenly assumed to be related to price; the higher price, the higher quality.

For users quality is determined by what a user wants. Individuals have different wants and needs and hence, different quality standards. For example motorbike and motorcar both are fit for use, but they serve different needs and different purpose of customers.



Quality is also based on value; that is the relationship of usefulness or satisfaction to price. From this perspective, a quality product is one that is as useful as competing products and is sold at a lower price, or one that offers greater usefulness or satisfaction at a comparable price. Thus, one might purchase a generic product, rather than a brand name one, if it performs as well as the brand-name product but is cheaper.

Manufacturing based criteria for quality says that quality is defined as the desirable outcome of engineering and manufacturing practice, or conformance to specifications. Whenever an engineer designs a product, he may emphasize the five basics elements (i.e. product, process, customer, standard and quality) as indicated by Mr. Kamran Mosa, one of the quality experts in Pakistan.

The manufacturer must translate customer requirement into detailed product and process specifications. Making this translation is the role of research and development, product design and engineering. Product specifications might address such attributes as size, form, finish, taste, dimensions tolerances, materials, operational characteristics and safety features. Process specifications indicate the types of equipments, tools and facilities to be used in production. Product designers must balance performance and cost to meet marketing objectives.

From customer point of view quality is "the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs." By 1980s many companies had begun using a simpler, yet powerful, customer-driven definition of quality, "Quality is meeting or exceeding customer expectations".

What or who is customer most people think of a customer as the ultimate purchaser of a product or service. Clearly, meeting the expectations of consumers is the ultimate goal of any business. But before a product reaches consumers, it may flow through a chain of many firms or departments, each of which adds some value to the product.

QUALITY GURUS: Dr. W. Edward Deming was Ph.D. in Physics and was trained as a statistician, during World War II he taught quality control courses but he realized that the teaching only would not serve the basic quality needs. After World War II Deming was invited to Japan, the Japanese had heard about his theories and their usefulness to US companies during the war. Deming preached beyond the statistics and emphasized on importance of top management leadership, customer/supplier partnerships, and continuous improvement in product development and manufacturing processes. Japanese managers embraced these ideas and become quality leaders. Deming's influence on Japanese industry was so great that the Union of Japanese Scientists and Engineers (JUSE) established the Deming Application Prize in 1951 to recognize companies that show a high level of achievement in quality practices. Deming also received Japan's highest honor, the Royal Order of the Sacred Treasure, from the Emperor. The former chairman of NEC Electronics once said, "There is not a day I don't think about what Dr. Deming meant to us".

Philip Crosby another quality expert viewed that improved conformance in production or service delivery leads to lower costs through savings in rework, scrap, resolution of errors, and warranty expenses. Philip Crosby popularized this viewpoint in his book Quality Is Free.

Quality is not only free, it is an honest-to-everything profit maker Every penny you don't spend on doing things wrong, over, or instead of, becomes half a penny right on the bottom line. In these days of "who knows what is going to happen to our business tomorrow", there aren't many ways left to make a profit improvement. If you concentrate on making quality certain, you can probably increase your profit by an amount equal to 5% to 10% of your sales. That is a lot of money for free.

Quality of Jannah: The most important is that Allah Subhanahu Wa Taala (SWT) also set up standards of aamal for true momin and Allah will reward Jannah to momin for his good deeds and mentioned the quality and standards of Jannah for example when Momin will enter into Jannah, it will be announced:

o You will remain in health forever and disease will never come.
o You will remain alive forever and death will never come.
o You will remain in bounties that will never be finished.
o Qualities of people of Jannah:

* In Jannah, height of Momin will be equal to the height of Hazrat Adam Alaihissalam (60 arms or 90 feet), beauty will be like that of Hazrat Yousaf Alaihissalam, age like Hazrat Eisa Alaihissalam (30-33), sweet of voice like Hazrat Haoud Alaihissalam, tolerance like Hazrat Yaqoob Alaihissalam, patience like Hazrat Ayub Alaihissalam and habits will be like that of Hazrat Muhammad (SAWS).

In the light of thorough discussion, we may derive quality as solution for Pakistan's survival and growth. The government of Pakistan can provide numbers of facilities to its producers of goods and services for example government can reduce power rates for manufacturer, can minimize taxes, can create quality awareness to industry but the real player of this game are the producers to compete with the global market who should ensure the implementation of quality.

In our industry the cost of poor quality element (the products which could not produce according to specification at the first time, these products needs rework, resolution of error etc. rate of rejection is 5% to 20% cost 2 millions to 200 millions per year) is very heavy that's why the production cost goes up and up. Accounting system is not designed to calculate the cost of poor quality. Unfortunately, our industry is not ready to understand this problem; they always blame government in terms of power rate or taxes etc. There are numbers of companies who got ISO 9000 certificate but they are using this certification as marketing tool.

In October 1887, William Cooper Procter, grandson of the founder of Procter & Gamble told his employees, "The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we provide it efficiently and economically, we will earn a profit, in which you will share".

When Ford executives visited Japan in 1982 to study Japanese management practices. As the story goes, one Japanese executive referred repeatedly to "the book", which the Ford people learned was a Japanese translation of "My Life and Work", written by Henry Ford and Samuel Crowther in 1926 (New York: Garden City Publishing Co.). "The book" had become Japan's industrial bible, and Ford Motor Company had strayed from its principles over the years. The Ford executives had to go to a used bookstore to find a copy when they returned to the United States.

In fact, US was the enemy of Japan but Japanese captured its evolutional philosophy of Dr. Deming, treated Ford's book as its bible and won technological war. I invite Pakistani producer of goods and services not to view WTO to whom it belongs, the need of the time is how you are equipped. Here I will not hesitate to repeat the title of documentary telecasted by NBC of United States in 1980, "If Japan can........Why can't we?"