Issues You Face

Quality Pays, Non-Quality Costs

Just 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. Non-quality 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, they are:

The Gaps On the Surface

Mistakes, reworks, defects, inspections, overtime, rewrites, change orders, overruns, scrap, across the board budget cuts, hiring freezes, layoffs, elimination of services. The venting of both internal / external suppliers / customers, finger pointing, quick fixes. Everyone tells you what to do, “but not how to do it”. Long days for salary workers, management putting out fires all day - every day. Other gaps are troubled billing hours, incomplete tasks, not enough time to get my job done. Things just keep piling up with no relief in sight. Late and last minute rush orders, doing things over, late charges, past due, excessive inventory/equipment, as well as excessive assets, space and inventories.

The Gaps Below the Surface

Frustration, low morale, shut down employees, customers just leave, conflict with employees and even customers. Confusion, absenteeism, customers not served, wasted time and energy, fatigue. Fear, No Communication, No Written Procedure and No Training, putting out fires, hidden agendas. 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. 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 suppose 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.