Early Quality Control Problems Were Major Issues For PC And Auto Manufacturers

ibmscCompaq finds its stocks contaminated with faulty power supplies. Disney gets eaten alive by crashing “Lion King” CD ROMs. Intel makes Pentiums that can’t handle division. IBM short circuits with defective ThinkPad power adapters. H&R Block and Intuit stir a taxpayers’ revolt. It almost sounds like deja vu–to the days when poor quality sent U.S. automakers skidding out of control. The PC industry continues to cruise, but the recent spate of product flaws raises a crucial issue: Is the pressure to pump ou t more, faster, cheaper forcing vendors to fall beneath their own wheels by breaking the speed limits on quality?

No one is saying poor quality is about to besmirch the PC industry to the extent that it tainted Detroit. “Most of these companies are more focused on quality than in the past,” says Roy Bauer, a former IBM executive who’s now an examiner for the Malcolm Baldrige National Quality Award. Nevertheless, “they’re caught up in the explosion in demand, and when that happens you try to take shortcuts.” Adds Michael Slater, editor of the Microprocessor Report: “Everyone is trying to shave a penny here or there, an d quality costs money.”

But poor quality costs even more. Intel ate $475 million to write off its wayward Pentium chips. Intuit took a charge of $1.3 million for its glitchy MacInTax and TurboTax. And pity poor Golden Systems. With only $29 million in annual revenue last year, the Simi Valley, Calif., company had to book a $5 million