Quality control should contribute to the bottom line

The stereotype of a quality control person often conjures up an image of someone in a white lab coat intently locating defects under a microscope. The reputation is well deserved because the history of quality control is based on having personnel checking the work of those who are producing it. Whether it is someone in a lab coat at a drug manufacturer, a foreman at a construction site or an auditor at a bank, inspecting for defects is an integral component of our culture.

Business leaders have traditionally had disdain for these inspection functions because they are most often manifested as overhead activities that drain profit dollars.

To further distance ourselves from our leaders, we are given to publishing negative-data reports such as scrap rate, error rate, failure rate, defect and rework statistics. We dwell on the dark side and report "reduction in errors" as our only good news to the world.

Quality as a Profit Center is the evolutional tool that takes us from traditional quality control to a new paradigm of quality contributing to the bottom line. The first step in this transition is to involve all levels of management in the quality process to challenge what data is collected and what it really means to the company. For instance, if you are tracking the number of customer complaints each month, reducing the number from 50 to 36 may be statistical good news (a 28 percent reduction), but how does that translate to the key business performance indicators? Does it mean we have improved performance or there are now 14 fewer customers who bother to call and complain? For quality statistics to be relevant, they have to steer us to the root cause of problems with the intent of preventing them from happening again.

If half of the customer complaints are about late delivery, the statistical data has to be dissected into the exact cause(s) for late deliveries and the departments that are causing the late deliveries must be held accountable for finding the root of recurring problems and eliminating them. Just as important is defining how the late deliveries and their root impacts customer retention, cost of goods sold, profit or some other key indicator that directly impacts business performance.

If there are 25 late deliveries out of 50 shipments, the company is in peril. If there are 25 late out of 25,000 deliveries last month, is it worth spending the money to remove .1 percent defect rate? The company must decide which key indicators are the most important to overall success and dwell on optimizing those processes responsible for causing errors.

The Quality as a Profit Center model causes companies to work on each area currently causing measurable problems and moving them from recurring inspection events to eliminating the root cause and, ultimately, to reporting relevant statistical data that shows positive impact on the bottom line. Is quality helping your bottom line?

Tom Taormina is a local expert in quality and business processes with more than 35 years experience and 10 books written on the subjects. He can be contacted through www.TaorminaGroup.com.


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