In last month’s column five tips were given for organizations and their quality professionals to consider focusing on to bring about positive results. Together, with these additional five tips, organizations will be well positioned to improve performance and improve quality.
6. Cost of poor quality (COPQ) must be known and managed. Most organizations have no idea of their total cost of poor quality. The cost of poor quality is defined as the costs that would disappear if systems, processes and products were perfect.
There are few things that are perfect so every organization has a COPQ but precious few spend little time in trying to identify their COPQ. Dr. Juran and Philip Crosby said that the total COPQ can be as much as 25% to 30% of the cost of sales. Staggering! So why aren’t managers challenging their organizations to identify their COPQ and develop plans to improve? I don’t know the answer but most aren’t. This is hard to understand when every dollar of their COPQ saved goes straight to the bottom line.
A couple years ago I spent time with a company that focused their entire continuous improvement efforts at the work team level. Their primary tool was a COPQ analysis worksheet to identify areas of waste. Everyone was trained, involved and worked toward reducing their COPQ. The result was sustained, and real improvement was pulled through to the bottom line. Quality improved, costs were reduced and jobs added in a competitive market. Everyone won.
7. Real improvement doesn’t center on hard assets. Organizations should determine where to focus their improvement efforts to get the greatest return. Typically, the tendency is to focus on hard assets. However, rather than just focusing on equipment and other hard assets, organizations would do well to put their continuous improvement initiatives toward people and processes.
Organizations should implement disciplined day-to-day areas of review. In today’s lean manufacturing environment that effort would be part of the visual factory. Organizations should implement daily performance reviews to not miss opportunities for basic skills coaching, reinforcement and providing real-time feedback to and from the worker floor.
8. Enhance employee worth. Real, sustainable change can only happen in an environment where workers, supervisors and managers have real-time visibility into production performance, reduced administrative burden, and a structure that allows people to contribute their own ideas and turn them into actions. When employees feel valued and appreciated, they openly embrace their tasks with maturity and ownership.
The key is to create an atmosphere of openness in a trusting climate that shows employees they have worth and value. To support this environment, organizations should implement an appropriate reward and recognition process that will translate into an empowered workforce. These actions will be responsible for releasing an explosion of creative solutions which will produce exponential results.
9. Focus on action. Don’t procrastinate. Decide the path that will achieve real improvement and focus on the implementation plan. With any performance improvement initiative momentum is key, and quick wins provide the fuel needed to gain momentum early on. Early successes ensure that the organization’s focus remains fixed on the true goals: higher quality with lower operating cost is the target, but don’t confuse the two as they are not always complementary.
The proper resources need to be dedicated to making it happen. Too often organizations have great plans to create change but too few resources are actually committed and the result is less than satisfactory.
10. Expedite improvements. Many organizations take too long to implement major improvements and the efforts stall. Don’t assume that transformational improvements will take months or years to implement. Results can occur in a relatively short time if organizations enlist the help of their entire workforce, properly deploy effective resources, create meaningful metrics and focus on technology that will support the improvement effort. Don’t be unreasonable but challenge the current thinking and spend time “out of the box” for a new perspective. Think days or weeks, not years.
Quality professionals are positioned to help their organizations focus on the vital few initiatives. The roadmap to success has been laid by Deming and Juran. Let’s be an integral part of the transformation and be the beacon to light the way.