Culture & Cost of Quality
2 sides of the same coin
The profit pulling power of quality
An old Dutch proverb says:
Great wealth comes from great care.
This is especially true in quality management.
A culture of quality helps businesses to pave their way to wealth – by creating top-tier products that people want to buy and helping to avoid the financial pitfalls associated with poor quality and neglect.
It stands to reason that the opposite is also true. As revealed by the American Society for Quality, the cost of poor quality within an otherwise successful company ranges between 10 to 15% of its operational costs. In worst case scenarios, these costs can escalate to a mind-boggling 40% of total business expenditure.
When it comes to quality, the stakes are high. That’s why we’ve put together this detailed guide to building a culture of quality and how it impacts profitability.
We’ll dissect what it means to create a quality-centric culture and how it can help to mitigate costs and minimize overheads. Additionally, we’ll look at specific examples of a culture of quality in practice and how it’s likely to impact your profit margins and operational efficiency.
Building a Culture of Quality
Let’s start by looking at what we actually mean when we talk about a “culture of quality”.
The best way to think about it is that a culture of quality is a code of conduct that everyone in the business adheres to. It guides every decision and action – big or small.
A culture of quality is more than just ticking boxes for compliance or meeting minimum standards. A culture of quality means going above and beyond, striving for excellence in every facet of the business, from product development to customer service.
For this reason, good quality equals good business. In fact, you can check out an in-depth whitepaper on how improving quality also improves business outcomes right here.
You don’t need to look any further than Apple to see how good quality translates to business success. The whole experience, from the moment you walk into their store to the after-sales service, is designed to exceed customer expectations. Apple products are also well-respected for their quality craftsmanship and style. It's no coincidence that Apple has one of the most loyal customer bases in the world.
Or how about Toyota? Their dedication to continuous improvement and elimination of waste (also known as the Toyota Production System) is the stuff of legends in the manufacturing world. Toyota’s culture of quality has helped them maintain their position as one of the world's top car manufacturers, despite facing fierce competition.
In manufacturing, one of the most impactful ways to build a culture of quality is to invest in digital technology. A digital Quality Management System (QMS) acts as a framework that can guide organizations to achieve quality objectives and focus on improvement– By automating tasks, organizations ensure efficiency, save time and significantly reduce costs - more on this later.
Benefits of a quality-driven culture in manufacturing
Before we move on to look at some examples of how to build a culture of quality in your organization, let’s first understand some of the benefits that arise from it.
How to implement a Culture of Quality
Starting a journey towards a culture of quality may seem daunting. However, it can be compared to preparing a good meal – you start with quality ingredients, follow a clear recipe, and add a dash of innovation to create something excellent and memorable.
Here are seven tips to guide you on your way:
- 01 Set a clear vision and goals
- 02 Encourage employee engagement
- 03 Lead by example
- 04 Implement robust processes
- 05 Make quality a part of everyday work
- 06 Invest in the right tools
- 07 Encourage continuous improvement
Set a clear vision and goals
To make any substantial change, you need to know where you're heading. Paint a clear picture of what a 'culture of quality' looks like for your organization.
Start with your vision statement, emphasizing the role of quality, and align your objectives accordingly. Remember, it's like picking the perfect destination for your road trip - you need to know what you’re aiming at so that you head in the right direction.
Next, set a series of goals that are specific, measurable, and realistic.
For example, let’s say that you’re the quality manager of a manufacturing company. Your vision and goals may look something like this:
Vision Statement: "We aspire to be the industry leader recognized for superior quality. We want to make our brand synonymous with trust, delivering flawless products that exceed customer expectations every time."
Goal 1: Improve Product Quality
Decrease defect rate by 25% in the next 12 months.
Goal 2: Enhance Customer Satisfaction
Increase customer satisfaction score to 90% over the next year by improving product quality and addressing customer feedback proactively.
Goal 3: Boost Employee Engagement in Quality
Implement quality training programs for all employees within the next six months and aim for at least 80% participation.
Encourage employee engagement
Creating a culture of quality isn't a one-person show. You need senior management buy-in if you want to improve quality management – check out this guide on how to nail your QM business case which will help you get any stakeholder’s approval. Employees are the backbone of this transformation, and their active engagement is key.
Let's say you're managing a production line in a manufacturing company.
Start by sharing your vision and goals in a team meeting - like reducing product defects by 30% in the next quarter. Then, launch the 'Quality Ownership Program' where each team member becomes responsible for the quality of a specific part of the production process.
To equip your team, provide specialized training on best manufacturing practices and quality control techniques.
To amplify employee voices, hold bi-weekly 'Quality Talks' for feedback and discussions about potential improvements. These steps create shared responsibility, empowering everyone to play their part in the quality improvement journey.
Lead by example
In the journey to quality, leadership is the compass.
As a leader, you can embody the principles of a quality culture in your actions and decisions. Show your team that you prioritize quality over everything else, and they'll be more likely to follow suit.
Imagine you're the plant manager at an automobile assembly line. A new model is in production and the launch deadline is fast approaching. Your team is under immense pressure to meet this deadline.
During a routine quality check, a significant flaw is discovered in the braking system. Fixing the issue would require halting the production line and missing the product launch deadline.
This is a good opportunity to lead by example.
Despite the looming deadline and the potential fallout from delaying the product launch, you decide to halt production to address the flaw. You communicate this decision to your team and higher management, explaining that the safety of the consumers and the reputation of the company for quality are paramount and cannot be compromised for the sake of meeting a deadline.
Taking this kind of action demonstrates that quality is not just a buzzword, but a core principle that guides every decision. Your team sees this, and it reinforces their understanding that a culture of quality is truly valued and upheld in your organization. In this way, you're not just telling them about the importance of quality, you're showing them in the most impactful way possible.
Implement robust processes
Invest in setting up robust systems and standards to guide your team's work. Remember – it's not just 'set it and forget it'. Regularly review and update your processes based on feedback and changes in the market.
Make quality a part of everyday work
In the pursuit of a culture of quality, consistency is key. Make quality a part of the everyday conversation. Encourage team members to discuss quality at meetings, share quality-related success stories, and celebrate quality achievements.
Invest in the right tools
The right tools can make a huge difference. A digital Quality Management System (QMS), for instance, can provide better, immediate insights and proactively lower the cost of quality. It's all about finding the right tools that suit your needs.
A high-performance no-code digital QMS like AlisQI can help to improve quality and lower costs in the following ways:
- Streamline processes:
A comprehensive suite of quality management tools allows you to consolidate your quality-related procedures into one user-friendly platform. This simplifies and standardizes processes, helping to reduce errors and improve efficiency.
- Empower employees:
With its intuitive interface and real-time data reporting, AlisQI empowers employees at all levels to take ownership of quality. Employees can access the data they need, when they need it, enabling them to make informed decisions and take immediate corrective action when issues arise.
- Encourage collaboration:
AlisQI eases collaboration by providing a centralized platform where teams can share information, discuss issues, and develop solutions together. This can boost engagement and help to create a culture of continuous improvement.
- Provide actionable insights:
AlisQI's advanced analytics and reporting tools provide valuable insights into your company's quality performance. Leaders can use these insights to make evidence-based decisions, set realistic goals, and monitor progress towards a culture of quality.
- Make quality a part of everyday work:
With AlisQI, quality management becomes a seamless part of daily operations. Employees can report issues, track progress, and view quality metrics directly within the platform, keeping quality front and center.
For more information on how to persuade the decision makers in your company, as well as the wider team, that an QMS can help to build a culture of quality, check out these valuable tips.
Encourage continuous improvement
A culture of quality is never stagnant – it's dynamic and always evolving. In other words, it is a form of continuous improvement.
To get people on board with a continuous improvement mindset, it’s a good idea to clearly communicate the benefits. The main benefit of continuous improvement and quality-driven culture is cost savings, which we’ll look at in more depth in the next section.
The Cost of Quality
How lack of quality impacts business
The price of neglecting quality
Neglecting quality invites trouble and can come with a hefty price tag. Here's the damage you might be looking at if you don’t create a culture of quality in your business:
- Product returns
- Customer complaints
- Brand damage
- Additional training costs
- Regulatory fines
- Lost opportunities
- Lower employee morale
Additional training costs
Lower employee morale
The Power of Prioritizing Quality
Now, let's flip the script. What happens when you prioritize quality?
- Fewer defects, lower costs
- Decreased overheads
- Enhanced reputation
- Higher efficiency
- Increased customer satisfaction
- Customer retention
- Premium pricing
- Stronger supplier relationships
- Process improvement
- Employee pride and retention
Fewer defects, lower costs
Increased customer satisfaction
Stronger supplier relationship
Employee pride and retention
For a more detailed insight into the cost of quality and how a QMS can boost your quality management and impact your business, join our free ROI webinar. In this 1-hour webinar, you’ll learn exactly how much a QMS can save you, how you can use software to reduce waste and find out how you can assess the impact of any quality-related investment.
As we draw this journey to a close, it's clear that a culture of quality is more than just an industry buzzword. It’s the well-oiled machine driving your business towards sustained profitability and peak operational efficiency.
Cultivating a culture of quality isn't about overnight transformation or quick wins. Instead, it's about laying a sturdy foundation that paves the way for your company's long-term success, helping your business to stand firm, even amidst the shifting sands of market changes and customer demands.
From decreasing defects to increasing customer loyalty and enabling premium pricing, a quality-centric culture boosts your bottom line and creates a profitable, efficient business. It helps you navigate around the costly pitfalls associated with poor quality and paves the way to enhanced customer satisfaction and greater business opportunities.
However, creating this culture of quality doesn’t have to be an arduous task.
Enter AlisQI, a no-code QMS designed to empower organizations like yours. Without the need for software developers, you can seamlessly infuse quality into every part of your business operations. AlisQI makes it easier to manage, track, and continuously improve your quality management practices.
Experience firsthand how AlisQI can facilitate your journey towards a robust culture of quality:
3 easy steps to convince everyone that you need a QMS
On this page, you’ll find all the necessary resources to build a strong business case
for Quality Management and convince stakeholders that you need a QMS.