In many organizations, managers perceive the choice between cutting costs and managing quality as an either-or decision. The truth is, quality and cost are two sides of the same coin. The objective must always be to meet the customer’s requirements perfectly, at the lowest cost possible.

That doesn’t mean products need to be over-engineered or cost-prohibitive. Actually, you can achieve cost-effective quality by following W. Edwards Deming’s famous 14 steps for quality management.

Here’s an overview of the 14 steps of quality management:

1) Create constancy of purpose for improving products and services.

In short, make sure quality and continuous improvement are at the core of your corporate strategy.

2) Adopt the new philosophy.

Spread the word. Only when employees see that management is firmly behind quality improvements will they achieve the quality levels customers expect. If you think it’s okay to do less than your best, so will they.

3) Cease dependence on inspection to achieve quality.

Don’t rely on end-of-production inspection for quality. Build quality into your processes and designs.

4) End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.

We all know choosing the lowest bid can be a dangerous practice. Instead of looking at price as the single qualifier for selection, look at each supplier’s commitment to quality in their own processes, as well as their on-time delivery performance.

5) Improve constantly and for every process of planning, production, and service.

Continuous improvement is a good thing. Get committed to it, and ensure employees have the time and resources to test new methods.

6) Institute training on the job.

The best way to ensure quality and safety is to ensure that employees know the best method for performing their assigned tasks.

7) Adopt and institute leadership.

Stand up for what you believe in. Encourage collaboration. Create an environment in which employees can reach their full potential.

8) Drive out fear.

Don’t punish people for honest mistakes. Treat mistakes as a learning experience and use each mistake as an opportunity to add error-proofing tools to the process.

9) Break down barriers between staff areas.

Don’t pit departments against each other, and don’t let them use other departments as the fall guy for problems. Every department should have the same objective, and they should work together to achieve the objectives. Note: You can’t make this happen if you haven’t made a practice of step 8.

10) Eliminate slogans, exhortations and targets for the workforce.

Make it clear what the job is, provide the necessary training and tools, and then let your people get on with it. You must do this either before or in conjunction with steps 8 and 9. Slogans trivialize your goal. Targets, whether for productivity or quality, are the enemy of quality and will incite people to reach the goal rather than work toward quality.

11) Eliminate numerical quotas for the workforce and numerical goals for management.

The only thing you should measure is defects, and the team should work toward a performance standard of zero defects. If your processes are out of control, it may take time to reach this goal. Don’t punish the team in the meantime if they don’t meet it.

12) Remove barriers that rob people of pride of workmanship and eliminate the annual rating or merit system.

Employees will maximize the metrics that control their performance reviews and pay rates. If your metrics are about speed, shipments, or anything else, expect that metric to take precedence over quality. Also note that setting up other metrics tells the team you didn’t really mean it when you claimed quality was important.

 13) Institute a vigorous program of education and self-improvement for everyone.

Training improves quality and gives employees a sense of self-worth while assuring them that management cares about employees as well as product quality. The right training will improve quality and safety automatically.

 14) Put everybody in the company to work accomplishing the transformation.

This can’t be a quality assurance project or the province of a small team. Quality belongs to everyone, at every step, and in every process. If it doesn’t, you’re doing it wrong.

Using Quality Management to Cut Costs

While the wording of some of Deming’s rules may seem slightly quaint now, it’s hard to deny their wisdom. Here’s another inspiring quote from Deming: “Improve quality, you automatically improve productivity.”

If you’re focused on reducing costs, you may find that your costs go up because of shortcuts or workers’ desires to please you and meet your objective. The result will be an increase in defects.

Defects are expensive. Defects slow down production, delay deliveries, and cost a lot to fix or scrap. If bad units reach the customer, they damage your reputation and annoy the customer. Fixing defects at the customer site is the most expensive place to implement quality.

But if you focus on quality right from the start, at every step — even during the design phase — productivity and costs will improve. Employees won’t have to stop to fix defects. Materials won’t sit around waiting for disposition or rework. As your productivity and throughput increase, on-time deliveries will increase, making customers happy.

A quality focus is the best, most effective cost-cutting measure at your disposal.

Change the way your company approaches quality management. View CEBOS’ webinar How to Implement APQP Right: the Process & the Benefits.