Framingham, MA-In 1987, a special auditing team from Nissan Motors visited the Bose Corp. manufacturing facilities on a follow-up inspection tour. The Japanese company was delighted with Bose sound-system technology, and wanted to install the systems in their new cars. But, in a special test, they had found two defective systems in 3,000 cars.

That discovery had prompted an inspection tour six months earlier in which Nissan claimed to have uncovered 78 problems with Bose manufacturing procedures. Convinced that Bose could not correct the problems, Nissan had pushed for a licensing agreement rather than have Bose build the systems itself. But Bose engineers had a different idea, and invited Nissan back for this reinspection. The auditing team walked into the Bose building certain the company could not have corrected the problems.

They came. They saw. They were conquered.

Bose engineers handed the Nissan team thick folders documenting how they had corrected the alleged deficiences-and improvements they had made in procedures Nissan had not cited.

"They couldn't believe we reacted so fast," recalls Dr. Amar Bose, company founder, Massachusetts Institute of Technology professor, and acoustics-technology legend. "And they were delighted we had done more than they had originally requested."

Wounded pride. Unbeknownst to them, the Nissan team had challenged something important at Bose Corp: the company's perception of itself as a world-class manufacturer. But rather than sulk, the engineering team looked on the Nissan audit as a blessing-and as the impetus for a major overhaul of their manufacturing operation and systems. "We respected the audit team, so we were open to their suggestions," says Warren Harkness, Bose director of Total Quality. "Besides, this was a matter of pride."

In many circles-not to mention living rooms and cars-Bose sound systems are synonomous with quality. Its reputation has catapulted the company to the top echelons of the acoustics industry, and has made Bose the leading seller of component audio systems in the U.S. and Japan. Coupling its noise-cancellation technology used by the aerospace industry, and its various speaker and sound systems, the company has been averaging about 20% growth per year. Latest figures show about $500 million in annual sales worldwide.

With sales results like that, Bose certainly has the ear of a lot of consumers. But what of the industry gurus? They seem impressed too:

Consumer Reports magazine gave the company's 301 Series III system its highest overall score in "Guide to the Gear."

And that engineering excellence starts at the top.

"Dr. Bose has enormous technical breadth and creativity, and is a critical thinker at a level I've never seen before," says Richard Paynting, Bose director of new product development.

Adds Engineering Vice President Joe Veranth, "He sets the example. He lets us know that one element of quality is not accepting anything that's less than perfect, even if it means going beyond your own job."

Detail-oriented. Amar Bose, it seems, cannot stand imperfection. Employees relate how he even picks up gum and cigarette wrappers from the floor in the cafeteria. "Once, when a group of engineers demonstrated a new speaker design, he praised the technology but complained about the demonstration," Veranth recalls. "He said everyone should be able to properly demonstrate a system, and proceeded to show the team how."

Bose has said that he wants all departments in the company to be models for the rest of the industry. It was his own commitment to perfection-and his broad technical curiosity-that drove Bose into the sound-system business in the first place. After spending nine years as an electrical engineering student at MIT, the last several of which he devoted to his doctoral research, he decided to buy a stereo system to help him relax as he prepared to write his thesis.

He knew all the electronic theory, so, like the engineer he is, he bought the hi fi system with the best specs. Then, since he had played the violin for seven years, he bought a violin record and got ready to enjoy the music. "It sounded terrible," he says. He couldn't understand why, and the contradiction between the actual sound and what he expected based on the system's specs launched him on a lifelong quest for the perfect system.

Using the facilities at an M.I.T. lab, he dove into acoustics research with the passion of a crusader chasing the Holy Grail. That was in 1956. Soon, the then-president of M.I.T., the late Jerome Weisner, granted coveted "project status" to his work. In 1964, after garnering several acoustical and electronics patents, he formed the Bose Corp. to design and manufacture sound systems and other technology.

Originally, he wanted to stay at M.I.T. and simply license the patents, but no one would buy them. "Companies didn't want the patents; they wanted the person behind the patents, me," recalls Bose. One of his professors encouraged him to go into business for himself.

He knew that hiring the right people was critical for success, and here he had an advantage: He had some of the brightest people around as graduate students, and he already knew their abilities and character. He hired a few of them after they graduated. "Then it just snowballed," he says. "Those first good hires attracted others."

Bose believes that a product can't really be better than its competitors unless it's different. "But differences can scare people," he says. Or at least make them initially skeptical.

The company's first product-the 901(R) Direct/Reflecting(R) loudspeaker system-bewildered techies in the industry. Speakers generally have tweeters and woofers, but the 901s had neither, yet were full-range speakers. Audiophiles didn't think they could play.

They were wrong. The 901s were electronically equalized, a radical departure from accepted technology in the late '60s. The speakers had nine drivers that covered all the frequencies, and eight of them faced away from the listener. Which represents the real world.

"In a live concert, 90% of the sound is reverberant-it comes at you after bouncing off walls and the ceiling," says Paynting. The realistic sound from the 901s struck a favorable chord with musicians and consumers, and they were an immediate success.

The company followed the 901s with several other innovations, including its Acoustimass(R) system, the Acoustic Wave(R) music system, and the Wave Radio (for which the Intellectual Property Owners Association named Amar Bose Inventor of the Year). The latest innovation, The Auditioner(TM) system, released last fall, helps architects design buildings with good acoustics.

Behind all of these products is a multi-layer quality program. It includes extensive use of Total Quality Management concepts, engineering software, in-house testing of parts and prototypes, and geometric dimensioning and tolerancing on all drawings. Just as important are "listening panels" of employees with a good ear for music who put every product to the test.

Quality relies on design. Bose emphasizes teamwork, but places primary responsibility for quality on the design engineers. Helping them is the 24-person department of design assurance, managed by Dave Smith. "We act as coaches and colleagues," says Smith, who knows a thing or two about teamwork. He spent several years as a crew member on a submarine before running quality control at Data General. "This is the most ethical and quality-conscious company I've ever seen," he says. Senior employees even have to sign an ethics policy annually.

Smith's group of engineers and technicians has expertise in virtually every area important in acoustics systems, from circuit design to finite element analysis to vibration testing. He assigns a staff member to work with an engineering team at the concept stage of product development, and that person stays with the team until the product launches.

"To have good quality, you have to be able to check your own work internally," Smith says. With that theory in mind, one of his first tasks at Bose when he joined the company five years ago was to bring virtually all testing in-house. It was a major investment-he has purchased about $1 million of testing equipment since then. "But it was an easy sell," he says, "because of Dr. Bose's committment to quality."

The investment paid off almost immediately. "When the testing was off site, it was sometimes difficult to get engineers to break from their busy schedules and travel to the test lab," Smith says. No wonder. EMI/RFI Emissions testing, for example, was done in Germany, a long and expensive trip for the engineers. The result was that the company was finding quality problems late in the cycle, and sometimes customers caught the problems first.

In-house testing improved quality in several ways, not the least of which was uncovering problems with the tests themselves. "For example," Smith relates, "the plastic enclosures and amplifier cards for our automotive systems consistently failed door-slam tests at one outside testing facility." When he brought the test in house he discovered that their test fixtures were wrong, and that his staff could do better using Abaqus and ANSYS finite element analysis software. "In the last 18 months, we've had no failures at all," he says.

The extra mile. Fussiness about quality affects the bottom line, sometimes in unanticipated ways. Smith pulled the plug on a re-designed music system that was about to go into production for availability during the lucrative Christmas season.

"The product was better than its popular predecessor in every way except one," Smith says. His tests showed him that a major component that had caused some problems on the previous model would probably still cause problems on the new version. Putting quality first, he suggested to the project manager that despite the potential loss of revenue, they should delay the product and fix the problem.

Sounds like an easy call except for one complicating factor: Bose had already terminated its contract with the vendor supplying critical parts for the earlier product. Delaying the new product would require renegotiating a new, short-term contract at a higher price than Bose previously paid just to have some version of the product on the market. That, plus the lost opportunity with the new product during Christmas, would be costly.

"Nevertheless, the project manager agreed on the need for improving that component, and we took the financial hit so we could perfect that new version," Smith says.

That attitude illustrates the fact that when it comes to quality, everyone at Bose goes the extra mile, says Robert Ramrath, manager of the engineering services group. He recalls the time one of his staffers carried a pair of Model 802 speakers into an engineering staff meeting and made an impassioned plea for changing the snap-fits on the cover. "The subject wasn't even on the agenda, but he convinced us that the latching wasn't right, so we started a project to change it right then," Ramroth says.

Engineering VP Veranth recalls the first visit Bose engineers made to General Motors when they were trying to break into the high-end automotive sound-system market: "We drove a car with speakers in it all the way to Detroit from Framingham to be sure the system worked well," he says. "But on the way, the speakers developed a problem." The team spent the entire night before their presentation in a garage fixing the problem.

Where the quality quest starts. To cite such extreme examples of dedication in a crunch may unfairly imply that quality efforts at Bose are always crisis-oriented. That would ignore the disciplined approach to design and manufacturing that goes on day-in and day-out. In fact, the quest for quality and leading-edge technology begins before the product-concept stage.

Product-development Director Paynting continually surveys demographics, technology trends, and the general marketplace to see where different technologies may be coming together. And, he has teams of staffers who visit so-called "lead-user" customers to find out what they're looking for in new sound-system technology.

"We never actually ask customers what they want for new technology," Paynting says. Instead, they ask customers to demonstrate how they use their existing products. That tactic can uncover a world of opportunities.

"For example," Paynting relates, "when we asked one customer to show us how he used a particular system, he got off his chair, walked over to the system and pushed a button to turn it on. We said, ""Why didn't you use the remote control,' and the customer said it was too difficult and he couldn't be bothered." That prompted the company to design what it calls "Do as I want" software that makes the remote easier to use.

Once the company approves a new-product concept, the pre-assigned engineering team goes to work on transducer, circuit, cabinet and other design tasks using a variety of software packages. For 2-D drafting, engineers use CADRA, from Adra Systems; for solid modeling, they use MSC/Aries, from the MacNeal-Schwendler Corp., Unigraphics, from EDS, Inc., and the Master Series from SDRC. For analysis, they use Abaqus, from Hibbet and Karlson, and ANSYS, from ANSYS, Inc. And for product-data management, they use Sherpa.

"Software is critical," says Ramrath, who heads up the software support activities. "With SDRC's Master Series, we've discovered interferences and lack of clearance that we wouldn't have caught until the prototype stage. And our data management system gets the right information on product design to the right people at the right time." In fact, it gives access to design data to manufacturing facilities in Massachusetts, Michigan, Arizona, Ireland, Canada, and Mexico in real time.

Steps toward quality. Dennis Gagne, manager of the amplifier technology group, was a key soldier in the quality wars even before the company implemented TQM following that 1987 Nissan visit. Since then, he has led several projects targeting specific quality goals. One project was to reduce the field-failure rate of transducers by 50% within one fiscal year.

His team set up a system for collecting defects from the field and analyzing the causes. Not an easy task, since they had to get parts back from factories throughout the U.S., Germany, and Japan, including the names of the customers and the serial numbers of the products that contained the failed transducers. "It took us a year to see a decline in the failure rates, but we applied the improvements to new-product designs immediately," Gagne says.

In another project, he led a team attempting to create standardized capacitor drawing formats. Prompting the project were repeated inconsistencies in parameter specifications in drawings created by different engineers. The team's proposed standard capacitor-drawing format is now being incorporated into the Bose Standard Drawing Operating Procedure.

Accurate drawings are critical in ensuring quality. That's why geometric dimensioning and tolerancing (GD&T) is integral to product-design at Bose. It's a language used on all prints that forces engineers to think through and articulate their design intent to improve accuracy and quality in manufacturing. Consultant Hugh Hamilton gave Bose engineers, draftsmen, and others a ten-week training course in GD&T two years ago, and now spends one day a week at the company helping them implement the concept.

"The increased accuracy from GD&T saves engineering changes, and therefore lowers costs while improving quality," Hamilton says.

Part of the culture. Getting people at Bose to talk about their quality efforts is easy, which indicates how much a part of the corporate culture quality really is. Getting a single definition of quality is difficult. Yet, the one thread that runs through all definitions of quality at Bose is concern for the customer. "Quality," says Design Assurance Manager Smith in a statement that echoes the sentiments of his colleagues, "is whatever it takes to enrich the lives of our customers by making it easy for them to enjoy our products."

And the drive for that kind of quality comes from the character of the people building the products, says Amar Bose. "Ethics, the way you treat others, the notion that you should be straightforward and honest-that's where quality comes from."

An ear on building design

A new Bose product helps architects ensure high-quality sound in their building designs. Engineers say the Bose tools can help architects avoid the costly and embarrassing problem of designing buildings such as the Lincoln Center's Philharmonic Hall, which opened several years ago and received howling reviews from musicians who couldn't hear one another and patrons who couldn't distinguish notes in the music they did hear. History records hundreds of examples of similarly acoustically flawed buildings, Bose engineers say.

The company's Auditionera System is a computer-modeling system that produces sound nearly identical to the sound people will hear in a building after the building is constructed. The result of a nine-year development effort at Bose, it incorporates several technical advances, company engineers say:

Acoustic modeling to analyze how sound emanates from a source, travels through an environment, and arrives at the entrance to a listener's ear canals

Bose will license the tools to architects and others designing buildings so they'll know ahead of time what the acoustics implications of their designs will be. And, the company guarantees the sound quality in any building designed with the Auditioner system.

More than just a speaker company

Though primarily known for developing systems that reproduce sound clearly and distinctly, Bose also develops products that get rid of nerve-jarring sounds in the aerospace and other noisey industries.

Bose noise-cancelling headsets reduce noise energy about 93 to 97% at the ear-nearly twice as much reduction as possible with conventional headsets, the company says.

Tiny microphones in the headsets' earcups monitor and measure the sound that reaches the ear. Special electronic circuitry compares the sound with what the ear "wants" to hear-radio communications, music, or silence. It reduces the unwanted noise by sending out opposite, mirror-image correction signals.