Manufacturing Cost of Quality

Segment 5 of 5 




Other Measurement Considerations

• Measurements must be consistent with the company's vision and objectives. They must support those policies, procedures, practices that the company decides will achieve the objectives.

• The chosen measurements should be generated easily, and often can be from data already being collected. Good meas­urement data is consistently gathered by the same people, the same way, and at regular intervals, as determined by the frequency requirements of decisions.

• The measurements must support the drive to positive action. If all shoes require the same amount of labor, maximizing the consumption of leather tends to force an excess of size thirteen shoes. Minimizing leather consumption, yields more size six shoes. Which is the positive result, or is it something else? Be careful what you ask for, you might get it.

• Set stretch goals that are out of reach, but not out of sight. People respond to challenges, not to impossibilities. The pursuit of perfection (Zero Inventory) becomes an excuse to fail. When a goal is reached, celebrate the accomplishment and reset the goal to the next level.

• Develop benchmarks that show the starting points, and mile­stones that demonstrate progress. At some point, a change is validated by achieving a milestone. Then it can be documented as a permanent change.

• Daily and weekly reporting instigates actions. If short-term milestones aren't met, corrective action is indicated. Monthly reporting shows trends and a negative direction calls for investigation and correction.

• Measures must match the scope and span-of-control of the people involved. The best way of assuring this is to co-develop the measure with the people who participate in the process being measured.

• To get a consensus on the measure, make sure there is a clear definition of it. What and Why are we measuring? Who collects the data, and who does any calculations? Who reads the numbers, and what might they do? How and where do we collect data? How often and when do we collect data?

• To keep the consensus, there must be an absolutely objective calculation (no massaging). Footnotes to explain unusual spikes are acceptable, but if the same footnote appears fre­quently, some action should be taken.

• Reward successes and coach failures. Expectations must be understood and agreed to by the process participants. Account­ability means managers must delegate sufficient resources and authority to do the job, and the work-force must accept the responsibility to get it done.

Things to Watch for

Unexplained spikes in any measurement should warrant foot­notes. Probable causes are bad data or calculations (massaged),

notes. Probable causes are bad data or calculations (massaged), or an unusual event. Check the method of gathering, calculation, or reporting.

Missing data may indicate lost cooperation or motivation. If you don't investigate, you demonstrate that the measure isn't impor­tant. Again, check the method of gathering, calculation, or reporting.

Attitudes can be poor about a specific measurement, or for the whole effort. Know which is causing problems, they are markedly different problems and require very different solutions. Try to convert a must do it to a want to do it by improving understanding and being as objective as possible.

Any measurement has carrot-versus-stick implications. Measure­ments are sometimes used to justify prior opinions. Measurements should acknowledge inherent conflicts among functions and peo­ple and should not put a job or career in danger, or strengthen existing kingdoms.

Multiple formats and items left out or added indicate a lack of consensus on the original measurement(s). Comparisons and decisions are hampered by attitudes of I'm special! This measure obviously doesn't 't apply to me. I need more data, less data, a different format, etc. Early leadership intervention will prevent an explosion of conflicting signals and strengthen the consensus on priorities.


We don't have unlimited resources, but most of us recognize the need to improve. The increasingly competitive environment demands we do something now. Successful companies will find a way to prioritize improvements and leverage their time and money for the quickest impact.

There is great difficulty in comparing the impact of problems and activities among business functions traditionally measured via different criteria. This can be minimized by developing a common methodology of analysis and using an agreed on unit of measure.

The Cost of Un-Quality calculates the total impact by finding the
cost of an individual event and multiplying it by its frequency of
occurrence. Expressed as money or time, this measure can
compare line and staff problems and rank their priority for further
action. The costs of potential solutions can also be compared to
their corresponding problems to see if the net savings are worth
the effort.


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