Focus on the True Enemy
Poor quality is a formidable enemy of profitability.
Quality professionals should feel proud of the accomplishments that they have helped bring about. The quality profession has risen to the tremendous challenges of the last century by developing methodologies that have helped businesses meet the demands of their customers.
In the last 30 years American Society for Quality membership has more than tripled, which attests to the value individuals and organizations place on the services of the quality professional.
The quality profession has provided guidance that has helped businesses trim billions of dollars in waste using various improvement processes and quality training. More is needed, however, from quality leaders as well as business leaders.
Organizations would do well to thoroughly understand their non-quality costs and put forth efforts at reducing or eliminating those costs. Beginning with Dr. Juran’s Quality Control Handbook in 1951, traditional quality cost categories were established but the tendency is still to focus on things easily identifiable. It is, however, the cost of poor quality that is the main culprit. Internal and external failures cost industry billions of dollars annually in rework, scrap and warranty expenses, not to mention loss of sales due to customer dissatisfaction caused by faulty product.
Waste due to poor quality is certainly one of the biggest thieves on the planet, though the cost of waste is not easily identified. (Remember Dr. A.V. Feigenbaum’s concept of the hidden factory, which pointed out hidden costs associated with poor quality.) In a perfect world there would be no waste. In that world, workers would always machine and assemble parts correctly; therefore there would be no need to test products. There would never be flaws in materials and products would always work properly. When a product is supposed to survive 1,000 hours then it would live to 1,000 hours of operation and beyond.
In the real world, however, waste and errors are everywhere. People make errors, equipment malfunctions, and devices break down the day after the warranty expires (that’s good reliability prediction).
Everyone is looking for a silver bullet that will help win the war on waste. However, there is no single approach that will cause this to happen. It takes a well-designed arsenal of approaches and well-trained personnel. In war the effective general has a strategy, picks the right leaders, and trains them to master the armaments that will be needed to attack the enemy.
Unfortunately, many organizational leaders don’t have a good strategy nor are they attacking the right enemy. Even if they win a few battles they may not win the war. As a result, some abandon the approaches that had been working and look for new weapons.
Similarly some organizational managers abandon approaches such as TQM, ISO9000, ISO14000, Six Sigma, Self-Managed Teams, Continuous Improvement Programs, People Involvement, not because the approaches are no good, but because they were ineffectively deployed. Training in the weapons of quality must come from the leaders and permeate down to the floor level.
As an example, in a period of belt-tightening, many organizations reduce expenses indiscriminately. It is easy for organizations to cut expenses through reducing or eliminating training programs, which are easily identifiable and seen as expendable. If we truly believe that people are our greatest asset then cutting training budgets may not be in an organization’s best interest. There are studies that show highly trained employees deliver higher quality and increased performance levels. In fact, training is a prevention cost category that delivers an estimated $10-$1 payback.
Significantly cutting back quality staff (prevention and appraisal costs) may also lead to higher non-quality costs. While quality has to be built in and not inspected into a product, the front-line soldiers, the quality staff, are usually seen as non-value-added. These are the people, however, who provide focus to the quality efforts. Organizations must learn to focus on the true enemy—internal and external failure costs—to help bolster the bottom line and better their chances to survive the troubling economic times the world is currently experiencing.
Now is the time for quality professionals to emerge as true business leaders to provide direction to their organizations. Too often aggressive cost reduction becomes the urgent focus and long term programs and structures are damaged or destroyed. Balancing short-term needs against long-term prosperity is imperative!
If organizations truly believe people are their greatest assets who make the difference in delivering quality and differentiating products and services, they will go to great lengths to preserve the capabilities of their workforce while managing costs.
The benefit will be more capable, passionate, and loyal workers—just what will be needed to respond to increasing demand. Let’s wage war on the right enemy and win the war!