The not-so Economic Case of Quality

Cost of Quality (COQ) is a subject I have longed to master in order to present the most accurate scenario to my management, however with negligible success. Working in the Middle East, I have never got the liberal opportunity to understand the benefits that a US-centric Malcolm Baldrige National Quality (MBNQ) program has to offer, yet Paul Borawski’s take on the value of quality in his recent blog, after decades of efforts (and still continuing) to push the importance of quality even in the 21st century, is not only a matter of debate but a matter of deep concern.

To continue to convince a convoluted top management the benefits that implementing quality has to offer, after decades of doing quality in all sectors possible in the world, improving product quality to the 6th sigma level, streamlining business processes, developing works-for-all international standards, etc. and the most sought-after benefit — saving billions of currencies across the length and breadth of the globe, makes me point in only one direction – Lack of Awareness.

Paul’s blog on finding answers to justify the importance and value of quality through the economic study on Baldrige Performance Excellence program is a tip of the ever-bulging iceberg. Despite this, the MBNQA was discontinued by the ‘enlightened’ US government. This, from a nation where Quality is considered a healthy priority in doing business, comes as a lightning jolt to me. Where on earth stands the rest of the world then, it makes me think.

It made me recall an ASQ white paper I had read, ‘Making the Economic Case for Quality’ by John Ryan which recognized a groundbreaking research called PIMS linking quality and financial results going way back in the 1970’s! “In the long run, the most important factor affecting a business unit’s performance is the quality of its products and services, relative to those of competitors.” – Buzzell and Gale said from their findings. Of further significance is the histogram on Page 4 of the study comparing performances of award-winning companies to those of control firms. Please find the time to read this enlightening white paper. I leave the rest for you to ponder.

[P.S: I would like to know which year was this white paper published. If someone could apprise me, would be greatly appreciated]

Another abstract paper I read on quality costing is here done by Steve Eldridge and Mohammed Balubaid, for those interested. It provides insights into difficulties encountered during quality costing and the use of knowledge management tools as a possible solution.

Looking from Paul’s insights based on the social value study, the above two studies and the countless economic cases of quality worldwide, what made the authorities throw MBNQA out of the budget window? Probably the same reason why many top management of companies all over the world look at a QMS from a non-value adding perspective.

Its lack of awareness, my friends. Simple. And that is the single most difficult part.

Ciao.

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