Quality Pays, Non-Quality Costs

 

How well does quality improvement really pay and how much does it cost? That question is best answered by examining the cost of non-quality improvement. Non-quality improvement can have a serious impact on an organization’s performance. Typically, the cost of non-quality amounts to about:

 

15 to 20% of SALES

up to 25% of ASSETS

up to 25% of the PEOPLE

up to 40% of the SPACE

up to 50% of the INVENTORY


The gap between quality and non-quality will show up in two ways:

 


          THE GAPS ABOVE THE SURFACE:

 

"Everyone tells you what to do, but now how to do it"                  

- Long days for salary workers                                          

- Management exterminating fires each day

- Mistakes

- Reworks

- Defects

- Inspections

- Overtime

- Rewrites

- Change Orders

- Overruns

- Scrap

- Accross the board budget cuts

- Hiring Freezes

- Layoffs

- Elimination of Services

- The venting of both internal/external suppliers and customers

- Finger pointing

- Quick Fixes

- Troubled Billing Hours

- Incomplete Tasks

- Lack of Time

- Never-ending assignments

- Late and last minute rush orders

- Late charges

- Redoing tasks

- Past due dates

- Excessive inventory/equipment

- Excessive Assets and Space

 

THE GAPS BELOW THE SURFACE:

  • - Frustration
  •  
  • - Low morale
  • - Shut-down employees
  •  
  • - Customers lose interest
  •  
  • - Conflict with employees and customers
  •  
  • - Confusion
  •  
  • - Absenteeism
  •  
  • - Customers not served
  •  
  • - Wasted time and energy
  •  
  • - Fatigue
  •  
  • - FearNo Communication, No Written Procedure and No Training
  • - Putting out fires
  •  
  • - Hidden agendas
  •  
  • *Remember that the 1 to 5 % affect up to 20% employee base with negative attitude responding to the organization and employees in a negative manner. At the end of my work day “I don’t do what I thought I was supposed to do and I feel like I’m the only one that cares. I am not excited about work and/or life, have no peace, joy, happiness and fear for my job/family. Additionally, the 1 to 5% of the employees (1% bad employees) are subtly undermining everything in the organization having to deal with responsibility / accountability, to both co-workers and internal / external customers.

 

 

 

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