Quality Magazine conducted a survey to determine how much manufactures plan to spend during 2001 on new test, measurement and inspection equipment, software and services to increase manufacturing efficiency, and decrease cost. Discrete manufactures plan to spend more than $4 billion on quality assurance. The article also states that surveyed manufactures expect to increase spending by 8 percent next year. The top three manufacture motivators were to reduce cost, tighten quality standards, and increase production capacity. The primary target for quality expenditures in accordance to 69 % respondents to
Quality Magazine survey was to increase efficiency. Reducing rework was second most often cited reason at 58 %.
Quality Cost Areas
Quality comes with a price tag but benefits out weigh cost due to improving customer satisfaction, reducing cost, and operation efficiency. Quality costs are segmented into major categories. These categories are: ·Prevention Cost - cost to plan and execute a project so that it will be error-free ·Appraisal Cost - cost of evaluating process and outputs of processes to ensure product is error-free ·Failure Cost - costs of activities specifically designed to prevent poor quality in products or services. ·Internal Cost - cost incurred due to duplication of work ·External Cost - cost incurred due to errors detected by customer. This includes warranty cost, field service personnel training cost, complaint handling cost, and future business losses
The goal of any quality cost system is to facilitate quality improvement efforts that will lead to operating cost reduction opportunities. This strategy is based on premise that ·For each failure there is a root cause ·Causes are preventable ·Prevention is always cheaper
Project Cost Avoidance
How do you know which quality improvement project you should select? First, identify a process improvement area within your business or department. Once project is selected, then decide on team members and a leader. Selecting right quality project will have direct impact on your operations. Ideally, quality project should have 3 to 6 months duration to gain most benefit and support from team.
The project needs to be aligned with your business priorities. Here are five basic guidelines to assist selection of quality project according to iSixSigna quality organization. ·Ask your business leader for three greatest issues facing business. Make sure project addresses one of issues or is directly related. ·What are greatest issues as seen from eyes of your customers? Look review customer complaints logs, listen to call center telephone conversations and call back customers that have stopped your company’s service. ·Is project manageable? Can project be completed within 6 months? If project will take longer than 6 months there is a possibility of losing team members due to job changes or feelings of frustration. ·Will team have a measurable impact on business processes or financial bottom line? Take on a project knowing what benefits are to business. ·What is your capability? If you haven’t been measuring your process. How do you know it needs improvement? Make sure you know what amount of defects process is currently producing and define your project desired outcome.
Comments
As leaders, your accountability for operational cost is greater now than a decade ago. Contact center technology advancements have led to multi customer channels such as web sites, web chats and emails. As a result, contact center costs have increased every year due to labor and support costs. One action taken by corporations to address labor issue is outsourcing operations. Whereas, support costs continue to increase within organization. Now, organizations are faced with supporting not only their contact centers and staff but also multiple vendors.
