Despite frequent efforts to estimate the general effect of quality programs on corporate performance, managers have rarely tried to document the connection between specific actions and specific results. That attention to quality pays has become, for the most part, an article of nearly scriptural faith. What exact kind of attention, however, and what exact form and magnitude of payment—questions of this sort have usually been left among the apocrypha.

To help answer such questions as these, McKinsey, together with the Technical University of Darmstadt in Germany, undertook a detailed study of the quality practices of automotive industry suppliers in both Europe and Japan. A breakdown of the companies studied follows.

To identify the key success factors of quality management, we grouped the companies in our sample by two measures: a "process quality indicator" (PQI) and a "design quality indicator" (DQI). We defined process quality according to industry-wide, clearly quantifiable measures, both internal and external, which we calculated for each company so as to take into account the complexities of different processes and products. Because no corresponding measures exist for design quality, we developed a scoring system to assess each company’s quality goals, as well as the tools that it...