editor’s choice
Missing the point
ensuring quality management objectives are met
In this article, Eric Stoop, CEO of EASE discusses the need to meet quality objectives and how by not investing in quality management you are effectively handing your customers to a competitor.
management objectives. And what many leaders fail to realise is that quality could cost them greatly both in terms of stunting revenue growth and their ability to lower the costs associated with raising quality levels. An LNS Research report, which surveyed more than 500 manufacturing executives, investigated which financial and quality management objectives were most important to business strategies. Unsurprisingly, growing revenue was identified as the top financial aim for execs with the goal of growing their businesses, whilst cutting costs associated with quality was top of the list when it came to quality management objectives. This highlights manufacturers’ increasing desire to cut costs, while continuing to increase revenue through providing exceptional products. One surprising insight, however, was that
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few executives selected both reducing cost of quality and revenue growth as their most important goals. Instead, the survey revealed:
Those who said revenue growth was most important put other quality management objectives above cost of quality.
Those whose top quality management objective was reducing cost of quality put other financial objectives above revenue growth.
10 Summer2021 UKManufacturing
eglecting quality can have a huge effect on manufacturers, especially when it comes to meeting quality
This point reveals a fundamental error in thinking on the part of manufacturing leaders—one that may actually prevent them from achieving their quality management goals. For example, with manufacturers that are looking to cut costs on their quality management may end up paying more as objectives aren’t enforced and defunct products are put on the production line than require remakes and recalls. Here we look at the true connection between cost of quality and revenue, and how manufacturers can leverage the 1-10-100 rule to improve performance.
GOInG hAnd In hAnd: thE lInkS bEtwEEn quAlIty And rEvEnuE Every pound saved on the cost of poor quality adds directly to bottom-line profits. What is also true is that reducing cost of poor quality also enables revenue growth. The reason is that when you are making
fewer bad products, you are wasting fewer resources on scrap and rework. Those resources shift from producing defective products to manufacturing additional good products that are able to increase your growth. For instance, let us look at what happens if a company is able to reduce production
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