The Risk and Cost of Doing Nothing About Quality
Doing Nothing is a Quality Concern
You don’t have to be an economics expert to know that doing nothing about quality control is not really a cohesive business strategy. A low-quality product will always come with a price. Mistakes happen, but quality should not be compromised due to wrong actions by the company.
It’s almost impossible to calculate, but there is a consensus that the actual cost is less related to inactivity and more in line with a company’s failure to control or maintain quality in the first place. It goes without saying that the act of literally doing nothing is unlikely to be part of a company-wide quality strategy.
Every organization will do something related to quality management, even if that is maintaining the status quo of using paper and manual-based processes. The caveat is that the status quo is insufficient in the modern business world. Therefore, companies that don’t invest in quality management are taking a huge risk, a decision that may usher in some or all of the following outcomes:
Reduced competitive position
Risk of repeated failures
Inability to anticipate, predict, and prevent quality issues
Manual time-consuming quality processes
Inconsistent documentation and training
Risk of errors from manual data entry across multiple, disparate systems
Lack of visibility into supplier performance
An additional cost if a company falls short in managing quality in a comprehensive way is a loss of potential gains. Choosing to “save the expense” of investing in quality will forego the potential cost efficiencies and expense-reducing revenue gains that can be achieved through tighter quality management and process control.
The Cost of Poor Quality
More often than not, the cost of quality (COQ) is aligned with the cost of poor-quality (COPQ). And although these two concepts might seem similar, COPQ relates more to the actual costs of delivering poor quality products to an end-user or consumer.
According to the knowledge-based quality community, American Society for Quality (ASQ), COPQ can be separated into four categories — prevention, appraisal, internal failure, and external failure costs.
Manufacturing companies integrating both COQ and COPQ into their quality management processes are more likely to understand the long-term effect of doing nothing. The key is to accept that organizations will pay for poor quality.