A Publication of WTVP

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 philosophies and methodologies that have helped businesses meet the demands of its customers.

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. 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 is still to focus on things easily identified and then reduce. The cost of poor quality 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 products.

Waste due to poor quality is the biggest thief on the planet today. The cost of waste is not easily identified, but it far exceeds the costs that criminals and wars inflict on society each year.

In a perfect world, there would be no waste. 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 live 1,000 hours, then it would live to 1,000 hours 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.

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 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 Work Teams, Quality Circles, Continuous Improvement Programs, People Involvement, etc., not because the approaches are no good, but because they were ineffectively deployed. Training in the weapons of quality must come from 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 by reducing or eliminating training programs which are easily identifiable and seen as expendable. But if we truly believe that people are our greatest asset, then cutting training budgets may not be in an organization’s best interest. Numerous studies show that highly trained employees deliver higher quality and increased production levels. Training is a prevention cost category that delivers about a $10-to-$1 payback.

Significantly cutting back quality staffs (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 are usually seen as non-value-added. However, 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 to survive troubling economic times.

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.

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. Learning institutions are seeing growth in registrations as wise individuals seek to advance their skills and knowledge during this economic crisis. Wise organizations will likewise 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! iBi
This article was originally published in the May 2009 issue of
Quality magazine.