Lockheed Martin is well known for including quality circles in its manufacturing process starting in 1974, after executives observed quality circles at visits to Japanese manufacturing plants. Other aerospace firms soon followed suit, including Northrop and Westinghouse. By the 1980s, quality circles spread to other industries. GM used them extensively.
A quality circle is a group closely related manufacturing plant employees who periodically meet to discuss how their section of the process can be improved in order to address specific manufacturing quality issues. Quality circles are considered autonomous and are usually led by a supervisor or senior worker. Participants receive formal training in problem-solving skills, Pateo analysis and cause and effect diagrams. Pateo analysis is a process of prioritizing possible changes according to their level of impact on the overall process. Quality circles present their findings to management and implement approved solutions.
U.S. manufacturers became interested in quality circles in response to the increased quality of Japanese goods, which they believed was attributable, at least in part, to quality circles. Japanese quality circles focus on the minimization of the scrap and downtime that result from part and product defects. U.S. quality circles have tended to focus more on cost reduction, productivity improvement and employee involvement. Quality circles fell out of favor in the United States after the 1980s.