Abstract: From Product Inspection to Statistical Quality Control: The Reinvention of Manufacturing Quality Assurance Capabilities at the Bell System, 1877-1929

Paul J. Miranti

Abstract

This study evaluates how the Bell System integrated learning and organizational capabilities to support the development of its quality assurance function from 1877 to 1929. Quality assurance was vital because it certified the reliability of equipment and apparatus that the telephone network relied on to provide efficient and economical service. The transformation of this function progressed through two major stages that responded to changing strategic priorities and organizational structures. The first involved strong horizontal growth of the telephone system and the backward integration to acquire manufacturing capabilities. During this era, which also witnessed the beginning of the rise of professional management at the firm, learning involved the establishment of plant product inspection practices and the differentiation of quality assurance roles and responsibilities among AT&T, Western Electric and the regional operating affiliates. The second stage which began about 1913 compelled the telephone company to develop new strategies when its ability to continue to expand horizontally became severely curtailed by regulation and technological considerations. New inward-looking planning sought to bolster consumer demand and reduce costs through system automation and improvements both in the quality of transmission services and the reliability of network apparatus. Learning in this stage involved the development of a much more comprehensive organizational structure for coordinating quality assurance both at the staff and line levels and betweenthe three corporate elements that made up the Bell System and the newly founded Bell Telephone Laboratories. It also, however, fostered the development of innovative methods of quality analysis that incorporated knowledge of probability theory. This new regime, known as "statistical quality control," SQC, proved highly effective in broadening manufacturing knowledge, establishing quantitative definitions of quality, reducing costs and risk, and establishing clear parameters of product reliability. Eventually the upgrading of learning led to the formation of a new profession of quality engineering, which found adherents across many industries in the United States and abroad.