The quality profession has provided guidance that has helped businesses trim billions of dollars in waste using various improvement processes and training. More is needed, however, from quality leaders as well as business leaders. While the world is faced with global economic challenges, we need to ensure we are working on the right things, for the right reasons.
Organizations should put forth efforts at reducing costs through analysis of non-quality costs. Traditional quality cost categories were established many years ago, but the tendency still is to focus on things easily identified and then reduce those.
The main culprit is the cost of poor quality. 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.
In a perfect world there would be no waste. Workers would always machine and assemble parts correctly and there would be no need to test products. When a product is supposed to live 1,000 hours, 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 a good reliability prediction.
Everyone is looking for a silver bullet that will help win the war on waste, but there is no single approach that will cause this to happen. It takes a well-designed arsenal of approaches and well-trained personnel to fight and win this war.
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 approaches that had been working and look for new weapons.
Similarly, some organizational managers abandon approaches such as TQM, ISO 9000, ISO 14000, Six Sigma, self-managed work teams or continuous improvement programs, not because the approaches don’t work, but because they were ineffectively deployed. Training in the weapons of quality must come from the top levels in the organization and permeate down to the floor level.
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. There are numerous studies that show highly trained employees deliver higher quality and increased production levels. Training is a preventive cost category that delivers about a $10 to $1 payback.
Significantly cutting back quality staff also may lead to higher non-quality costs. While the front-line soldiers are usually seen as non-value-added-these are the people 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 of surviving the troubling economic times that the world is currently experiencing.
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.
As an example, even as organizations are downsizing their workforce, they should be identifying or even creating opportunities for their quality staff, as well as continuing workforce learning. Wise organizations will take advantage of these times of low demand to invest in their employees and create opportunities for employees to invest in themselves.
When the business climate regroups, 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!
Wise organizations will take advantage of these times of low demand to invest in their employees and create opportunities for employees to invest in themselves.