Measuring Quality Value, some reflections

In his latest publication on his blog, Paul Borawski developed the concept of measuring the Quality value.

Quality value is given by the clients, their experiences and perceptions, as reflected in the fact that he/she is willing to pay for products that an organization delivers.

While the customer feels that value received compared to the value paid, will produce lower costs and / or greater satisfaction in time, the product will have higher Quality.

From the point of ISO 9001, Quality is determined by the degree to which a set of characteristics of a product meets customer expectations, so the Quality level is mobile and is determined based in customer experiences.

If any other company in the market offers more features at the same price, the product in the comparison will set a higher Quality.

You can not improve what you can not measure, so if we want to improve the Quality we need to determine appropriate measures to enable to improve.

Within these measures and thinking from the perspective of the company, Quality methodology helps us to have more satisfied customers that are reflected in higher sales and the best use of resources.

In the best use of resources becomes important to analyze the Costs of Poor Quality (COPQ). Paul Borawski on his blog indicated that in USA COPQ represents 20% in manufacturing revenues, 30% in services revenues, 70% in health, 70% in the government sector. In Ecuador the figures should be similar or even greater.

COPQ corresponds to costs of non compliance (internal and external failure costs), but also should consider the costs incurred by avoiding generate poor quality, this is the costs of prevention and cost of evaluation.

COPQ can also be classified between visible and hidden. For example between costs often hidden we could consider the Gemba Kaizen 3M: Muda (waste), Mura (Irregularity / variability) and Muri (hard conditions for workers, machines or workflows). These 3M produce poor Quality.

COPQ projects can have a significant impact on results, without raising prices or making efforts to go out and find new customers.

For Taguchi, Quality, rather than by the satisfaction of specifications and customer requirements should be measured in terms of "loss function", which means the loss that society suffers as a result of poor Quality. In this approach a Quality product is which meets the expectations of use and performance every time the customer uses it, without fail and in any condition or circumstances.

Products that fail to meet these expectations cause losses for clients, companies that produce, as well as for the rest of society. Thus, for Taguchi, quality should be measured in terms of lost causes: the greater is the loss that occurs, the lower the quality.

The quantification of costs outside the boundaries of the company is harder and is a challenge that can be used to make a difference.

As indicated by Paul, the value reached by the study of the impact of applying MBNQA, conducted by professors at the University of California is really impressive: 820:1.

These data are sufficient to indicate that any effort made to encourage companies to implement Quality methodologies and best practice models will be highly compensated in any organization, regardless of size, business sector or market it serves.

The conclusion from all the above is that whether you do not have exact COPQ, and function that causes the loss, the efforts to develop Quality methodologies will be compensated in the long run.

César Díaz Guevara