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.
Showing posts with label quality. Show all posts
Showing posts with label quality. Show all posts
Sunday, April 18, 2010
Tuesday, December 29, 2009
Quality
Quality, in general, addresses four main points: Process Compliance, Work Product Creation, Work Product Quality and Process Improvement.
Process Compliance
Organizations spend a great deal of time and money creating processes. To not follow them is to waste the time and effort that went into creating them. If the processes are not useful, that is more properly addressed in topic 4, Process Improvement. Even if the processes are less than optimal, they should still be followed, at least until enough data is collected such that you can make an effective process improvement suggestion.
Typically, people follow the processes using tools to create the work products in accordance with a contract and complying with standards. Following the process usually leaves some type of “paper” trail that can be used to determine that the process was followed. The “paper” trail is composed of things like: meeting minutes, measures of the process, audit trails, activity logs, attendance sheets, etc. These types of process records tell us that the right people, spent the right amount of time doing the right things to create the work product.
Work Product Creation
All organizations are in business to create/deliver a product/service. The work products are created by following the process. Work products can be destined for internal or external use, deliverable, or non-deliverable.
Work Product Quality
It is essential that the work products created are fit for use by those for whom they are intended. Essentially there is no purpose in following any process unless it creates a work product that is intended for use by the author(s) or another, now or at some time in the future. Work product quality is determined by assessing the work product against its requirements: format, content, function, performance, etc. (generally, Verification). Work product usefullness, or fitness for use in its intended operational environment by its intended users, is determined by those who must use it (generally, Validation).
Process Improvement
Never confuse doing it differently with doing it better. Running away from the old bad process is not the same as moving with intent toward a new and likely better process. The processes we follow ought to result in our being able create/deliver a quality product/service profitably. That means the total cost of creating, following, assuring and improving the processes plus the cost to create/deliver a product/service ought to be less than the revenue the business derives from delivery of the product/service. The data we collect ought to be able prove this. If the data tell us differently, we have a decision to make, do we keep losing money, or do we improve our processes so they drive us to be profitable.
Process Compliance
Organizations spend a great deal of time and money creating processes. To not follow them is to waste the time and effort that went into creating them. If the processes are not useful, that is more properly addressed in topic 4, Process Improvement. Even if the processes are less than optimal, they should still be followed, at least until enough data is collected such that you can make an effective process improvement suggestion.
Typically, people follow the processes using tools to create the work products in accordance with a contract and complying with standards. Following the process usually leaves some type of “paper” trail that can be used to determine that the process was followed. The “paper” trail is composed of things like: meeting minutes, measures of the process, audit trails, activity logs, attendance sheets, etc. These types of process records tell us that the right people, spent the right amount of time doing the right things to create the work product.
Work Product Creation
All organizations are in business to create/deliver a product/service. The work products are created by following the process. Work products can be destined for internal or external use, deliverable, or non-deliverable.
Work Product Quality
It is essential that the work products created are fit for use by those for whom they are intended. Essentially there is no purpose in following any process unless it creates a work product that is intended for use by the author(s) or another, now or at some time in the future. Work product quality is determined by assessing the work product against its requirements: format, content, function, performance, etc. (generally, Verification). Work product usefullness, or fitness for use in its intended operational environment by its intended users, is determined by those who must use it (generally, Validation).
Process Improvement
Never confuse doing it differently with doing it better. Running away from the old bad process is not the same as moving with intent toward a new and likely better process. The processes we follow ought to result in our being able create/deliver a quality product/service profitably. That means the total cost of creating, following, assuring and improving the processes plus the cost to create/deliver a product/service ought to be less than the revenue the business derives from delivery of the product/service. The data we collect ought to be able prove this. If the data tell us differently, we have a decision to make, do we keep losing money, or do we improve our processes so they drive us to be profitable.
Subscribe to:
Posts (Atom)
Posts
