QUALITY - Cost Center or Profit Center

QUALITY - Does it cost you money or make you money?

Crosby's message was that a quality program, properly applied, returned money to the business bottom line, far in excess of the costs of operating the quality system.  Quality saves/makes you money in a couple of ways: real savings, and cost avoidance.

Real Savings
If you add/delete/modify your production processes it is quite likely that you will become both more efficient and produce better products.  Efficiency translates directly to profit; you can make more with less, and it'll be better.  You may be able to charge more for better products.  This is the typical argument made for process improvement.

Avoiding Costs (Real Savings Too!)
Avoiding costs that historical data shows you would have otherwise incurred is equivalent to profit; it is money that you can now use productively to advance the business rather than to fix defects.  Just because you don't have a production development phase on the project schedule for fixing defective products does not mean that it's not there.  You have to allocate resources, time, money, equipment, etc. to fix the defective things before you deliver them.

The Problem that the Quality People Face
The sooner that quality organizations can convince management that the quality organization is a profit center rather than a cost center the better off the quality organization(s) will be.  The numbers come out the same; however, everyone likes profit, it sounds so much better than we avoided costs.  This is a marketing problem that the quality folks have not yet become very adept at solving.