For too long, quality has been relegated to an end-of-the-line operation, treated like an afterthought in the production process, and considered a cost driver rather than a profit driver. Many C-level executives consider inspection a necessary evil, and in a sense, they are right.
Companies that don’t commit themselves to quality end up catching poor quality at the end of the line. Catching the problem at the end of the production line is better than at the customer site, but not by much.
The later in the production process a quality problem is identified, the costlier it is to correct. Building in quality up front is the cheapest way to ensure a quality product. Designing error-proof production processes as much as possible is the easiest and least expensive way to ensure quality.
The Cost of Delaying Quality Management
Error-proofing may require an upfront investment in jigs or tooling that help ensure parts are consistently produced correctly. Component designs may need to change slightly to ensure that they can be manufactured consistently. When amortized over the lifetime of the design, these upfront costs have a very small effect on total product costs.
Often, companies put pressure on engineering and manufacturing to bring designs to market before they have all the quality features and processes in place. While time to market is important, cutting corners at this stage will add to costs in the future. At this point in the product’s life, the quality focus becomes preventing future problems rather than containing existing problems.
Containing a quality problem — even early in production — is more expensive than preventing it. Finding problems at this stage leads to expensive rework and may cause production delays. Sometimes problems that happen early in the process can’t be corrected at all, leading to scrap.
The most expensive point to find a quality problem, however, is at the customer site. Corrections may require on-site service calls and parts or unit replacements.
Why Prevention Is Key to Quality Management
When poor quality is discovered after units are shipped, recalls can cost companies millions of dollars. Grocery recalls, such as the recent ground beef recall, can cost a company up to $30 million in recall costs and lost sales. A 2015 study at Ohio University estimated that the effects of foodborne illnesses cost the U.S. between $55 billion and $95 billion per year.
While your company may not bear the costs of the resulting illnesses, one of the biggest costs you will feel is the loss of customer trust. Customers are unlikely to buy from the company again when they become sick from the product or experience faulty out-of-the-box performance.
Being Accountable for Quality Management
Executives often respond by saying, “That’s the quality manager’s fault. I rely on the QA team to prevent this sort of thing.” That statement may be true, but it is a poor management practice.
Most quality frameworks directly refer to C-Level executives. These frameworks include MMOG/LE, ISO 9001, and most medical device standards, including the U.S. 21 CFR Part 11 and the Japanese Pharmaceutical and Medical Device Act, Health Canada, and EU regulations.
C-Level executives are required to provide tools and resources to manage and ensure quality and to assume the ultimate responsibility for the product’s quality. That makes quality a core responsibility as well as a strategic endeavor and one of the simplest tools available for keeping product costs low.
Promoting Quality Across the Business
If management looks at quality as a necessary evil or a cost driver, so will employees. They will treat quality as an afterthought while designing products and processes, and that will add costs over the life of the product.
When management makes it clear that they value quality and understand its value to the company, employees will work hard to ensure that products and processes are designed in a way that delivers consistent quality.
Given the framework requirement and the effect on costs, it is apparent that the C-Level executive’s role in quality is to be a leader and a driver. The thoughtful executive will find that quality cannot be ignored or left to chance.
Let CEBOS help your company promote quality management across the business. View our webinar How to Implement APQP Right: the Process & the Benefits.