Monday, September 15, 2008

Defining the Value of Quality Management

The process of quality management has evolved of the years with increasing pressure from customers, government and shareholders driving manufacturers to produce higher quality products while reducing the cost of quality. Aberdeen Research has determined that Best-in-Class companies have a significantly lower cost of quality with:

  • 9% less revenue lost due to internal failures
  • 6% less revenue lost due to external failures
  • 2% less revenue lost due to assurance costs
  • 2 % less revenue lost due to prevention costs

    Totaling 19% less revenue lost due to cost of quality

In order to achieve these Best-in-Class performance levels, companies need to:

  • Create/Improve visibility of quality processes across the entire manufacturing operation and suppliers
  • Implement Quality Management Systems (QMS) at an enterprise wide level
  • Establish real-time or near real time links between QMS and other technologies implemented across the value chain

Are you Best-in-Class?