Part 2 More of ‘What’s in it for you?’…

As you know, I have been talking about efficiency for quite a while. Of the many definitions, I see efficiency as the ability to accomplish a job with a minimum expenditure of time and effort. I have to believe that a company’s main objective is to reduce costs, increase quality, increase revenues and, finally, increase profits.

The last ‘ideas’ covered reducing costs, this one covers Increasing Quality.

On the Topic of Increased Quality

In a manufacturing environment, quality improves reliability and increases production. Fewer defects translate to fewer warranty claims and increased profits. It costs money to improve quality, let’s look at where you are likely to spend money…

Prevention – New product review processes; Quality planning; Supplier approval process; Process capability evaluations; Quality improvement team meetings; Quality education and training; etc.

Internal Failures - You are able to discover the failure before it gets to the customer, but now spend cash on scrap, rework, re-inspection, re-testing, materials reviews or downgrading.

External Failures – After the customer has the product, you are processing customer complaints, customer returns, warranty claims and doing product recalls. We know one large aerospace company that delivered a faulty product and it cost them over $2 million to correct it.

Most companies looking to improve quality will revisit their processes and re-engineer them to prevent quality defects and internal/external failures. They look to Six Sigma, Lean manufacturing and TQM strategies for help. The bottom line: A large number of manufacturing companies are achieving real success and real success increases their profits.

Next topic – increase Revenues

Your Thoughts…