Collecting data and cutting quality related costs
“If you can’t measure it, you can’t manage it“ – one of the most cited “managerial truths“. Some say it’s not an absolute truth. Even the author of this idea is uncertain, some says it was said by Dr. Deming, other say that Deming only refer to Lloyd S. Nelson.
Anyway what You measure it is more easier to improve. Is it possible that the author of this quote which is so often cited in management schools or meeting may be wrong? A specification says that he actually stated that “the most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them”. More simply Deming realized that many important things, that must be managed, cannot be measured. Both those points are important. One, you can’t measure everything of importance to management. And two, you must still manage those important things.
Some similar situation was in industry when talking about improving quality or cutting quality related costs. A major improvement appeared when IT solutions where introduced to production and quality controlling. New production control systems can significantly improve productivity and reduce quality related costs. For example production control systems using bar code, or radio frequency identification can significantly improve data collection and processing. Precise data can be used for motivating people, for making better plans, for correcting quality problems etc.
First managers have to find out (by measuring data) the major sources of quality related costs, by number, by value, by wasted time. These data are oscillating by industries, by companies, but we have a clue which can be.
Main category of quality related costs include the costs of scrap, reprocessing, and guarantee claims. These costs may be caused by poor design, deficiencies in product engineering, neglected operative training, by poor workmanship, etc. All these can be included in failure costs category, or the costs associated with correcting any difference from standards.
When talking about cutting quality related costs specialist sometimes use to forget about importance of product design on cutting cost. Good design saves cost first at the design stage, then at production and testing stage. Successful design is needed not only when creating the product, but also when conceiving systems for production and quality control.
Planning comes first, then measuring and improving. Now repeat.