Linking Quality to Profits
To increase bottom-line profits as well as customer delight, it is vital that we kill the distinction between financial results and quality results.
Strategic business planning must accept quality as a primary business goal. Similarly, strategic quality planning must recognize financial results as a primary quality goal.
I believe the quality council should be an integral part of the business council. This will simplify the business and quality review process, as well as assure, at speed, quality and financial results.
What do you think?
I am part of ASQ’s Influential Voices and this post is in response to ASQ’s Blog: A View from the Q.
None of this is rocket science! The greatest opportunity we sit on is the waste and inefficiencies in our organizations.
One third of costs in a batch mode manufacturing organization are dedicated to waste, rework, inefficiencies, inventories, after-sales-service, etc. These costs are even higher in our service organizations such as airlines, hotels, hospitals, and so on.
How high do you estimate these costs to be in municipal corporations? In educational institutions?
In sync. This is already happening in some companies where quality teams are being asked for hard results. While most in quality profession may not like this initially, in the longer run this will bridge the gap between quality and finance.
(Sir – Welcome to blogosphere…looking forward to your gems.)
Thanks Anshuman.
Quality should be top of the agenda in any senior management meeting if they are looking for hard financial results. Can you be confident of bottom line results without product and service quality?
My belief is that if India has to “make it better” and prosper, Indian manufacturing organizations must focus on Reliability Engineering & Management. In particular, senior management dashboards in the auto, engineering, and consumer durable sectors should include Life Cycle Costs, MTBF and MTTR.
SL
Dear Sir,
I agree with you and well said.
However taking an holistic approach, Business goals in achieving higher turnover & Gross margins is inivitable. Strategic Quality Planning must address the Operational excellence which should target to achieve its contibution through reducing COPQ and enhancing customer requirements by acting on VOC.
Regards,
Hello Cyril
I agree.
VOC should in fact be a core competency of any aspiring world-class organization. I advocate that VOC should not be outsourced. We also need to remember that the customer defines quality and pays your salary! Customer focus should therefore be the beginning and end of all our business endeavors. It should translate to higher market share and revenue.
Quality improvement and COPQ reduction should simply be a habit. However, audacious strategic goals such as “double your profit without capital investment” can make all the difference.
Thanks for encouraging me with your comments.
Suresh