Quality might in theory be top priority, but most manufacturing operations run on ROI (return on investment). You have to show a one-to two-year payback to get something funded at an existing plant. The new plant is more 10-year payback. Quality is always tough to find ROI for. Better product often costs more money. Quality specs often only exist at contract boundaries, not internally to the organization to understand process capability. The quality specs in the contract often don’t match reality, but asking to change them as a customer is an opportunity for the vendor to up the price, so no one wants to talk about that. Changing them as a vendor to hit a higher spec also defies contract logic as the customer currently is accepting all the product we ship, so why bring up that it may not quite meet spec.

This often leaves only internal quality initiatives. These often start with the scope of automating an inspection job, but that’s often difficult because of all the things the person is really doing. One person’s job is often 3+ systems when you really break it down. The automated quality system also needs to interact with the manufacturing process. It gets tricky fast. Typically, you want to break the process down differently as you automate. But if the automation system isn’t yet proven that’s high risk for hypothetical reward. Best to spend small amounts of money on pilot systems, designs, breaking up the problem to solve the problem with technology. Jobs for people are often designed around combinations of related problems they are responsible for. Technology is often best designed around physics.

Correspondingly, very few quality-centric projects get funded. Fewer people see the value and necessity of investing in quality. More and more finance and non-technical types come into manufacturing but can’t really see how to improve the processes they manage. They task everyone with coming up with one-to-two-year ROI ideas. However, the problem is those often don’t exist. It’s difficult for manufacturing opportunities let alone opportunities in quality to compete for capital investment with Apps and AI.

However, as I’ve been around this industry for a while now, I’ve noticed something. Customers that I interacted with early in my career that were entirely narrow ROI-focused and could never really find an ROI on quality aren’t really around anymore. They’ve been bought out in shotgun mergers / acquisitions, sold off in bankruptcy, just shut down, or are shadows of their former selves. Did they miss something? I’ve come to think that they did.

The true ROI of quality is the data collection in pursuit of process control and process understanding so you can tweak the process and do better. You have to fund these things at some decent rate over some decent timeframe or they never get figured out. Your competitor figures out how to do it. You lose out. You also don’t even know how to build the next new plant. Not in the sense that you can’t duplicate the plant you have, but that you should, over 10-20 years operating a facility, have figured out a lot of things from formally measuring and observing things in your production process. You’ve realized all the little things that should be different in the new plant. You can build a facility that churns out more widgets at higher quality and lower cost. Quality improvements are often back doors into lower costs as you can now start trimming material and cycle time. They are also a path to greater profit when you earn a reputation for high quality product. You don’t have to look everywhere to find improvements. It’s in the physical process right in front of you. Control it better and you can up speed, remove material, or use a lower grade of material (like recycled steel or aluminum) while still hitting the same overall spec. But you need lots of numbers to confirm you are really controlling things the way you think you are, and hitting specs the way you should.

 In short, if you don’t spend your time on these things you miss “it.” “It” being the idea that comes from all the measurement and the data and all those observations and thoughts that point the path forward. “It” will not be found very far from the production line and production data. The only times “it” isn’t found close to your production line are times when “it” is found very close to another production line, that allows your part to be made a new way for instance via extrusion instead of a mold. “It” will be found close to the physical process. Don’t look far. Then conduct a small test, see what happens, test again.

In a lot of these processes too, there are just very few one-to-two-year ROI ideas. There are a lot of ideas that can trim out costs, but just a little bit at a time. Fewer machining passes because the forging is just a little more accurate, narrowing the weld seam by another little bit, automating changeover just a little more, so it can be done with one fewer manual adjustment. But to see these opportunities you have to have all kinds of systems taking measurements, doing quality checks, feeding you the information from which you can understand how to make small changes to the process.

Often the way forward is indirect. It’s figuring out how to have better process control and thus quality, but then using that to trim down the design a little bit, save weight, save material, meet the same specifications at lower cost. An organization that hammers only on costs all the time is going to miss this tweak, this “it.” The problem is it came dressed up as a quality improving idea, and it only led to savings later.

Organizations that get obsessed with quality and process are the organizations that don’t seem to miss “it”. They find the way forward, how to make something really work. That’s the true ROI on quality.

The better way to think about it in my mind is you just need to steadily devote 1-5% of the revenue stream the plant generates to really understand the plant and what it makes. For a lot of these businesses that’s a jaw dropping figure, and well beyond what they spend today on quality or quality-adjacent things. The alternative though is that 10 years from now, when planning the “new” facility the only idea anyone has is copying the old facility (in a place with cheaper labor) and there’s no way to just walk into the room in year 10, spend all the money, and make up for 10 years of not coming to truly understand your product and your process. The only way is steady investment in quality.

In short, quality deserves a bigger slice of the pie. It just has to figure out how to justify it. The ROI in my mind isn’t insurance on the entire revenue stream, it’s the existence of the revenue stream 10 years from now.