How to Improve Profits Through the Use of Quality Control
July 17, 2018 | Grow Your Business | No Comments
Quality control extends well beyond checking for defects of a manufactured product or service prior to delivery. Effective quality control is ubiquitous in an organization. It supports the complete and effective performance of each job while ensuring every interaction with the customer is successful. Expectations made clear for every position as to how each job should be performed and the ways departments should communicate/interact is key to successfully embedding quality control into your organization.
Where does quality start? It starts with the culture of the Company and the procedures in place to achieve the desired quality. If the transfer of poor quality products within your business is not accepted, they will never get outside the organization. Quality control is universally implicit in each process and position. Each person in the Company must understand how to do their job at the highest level of quality possible with the resources to actually do it.
How Strong Quality Control Will Benefit Your Company
Quality control involves more than checking for flaws prior to delivery. Whether a manufactured product or a delivered service, if top quality is not being achieved, something in your Company’s process needs fixing. While some make the distinction between Quality Control (removing the inferior parts from the process) and Quality Assurance (the practice of preventing defects), we will use the term quality control as a comprehensive term.
Over the last several decades, many concepts introduced apply directly to quality control, further emphasizing its importance. Kaizan internalizes continuous improvement while ISO certification ensures documentation and consistency of the process/product. However, the real purpose of quality control is to assure customer satisfaction resulting in higher profitability. A lack of quality control is inefficient and extremely costly; it eats away at your profits and hurts your business.
The easy-to-spot costs of a lack of quality control start with the return of a product or dispute in the payment for services. The Company has the obvious costs of accepting the return and resolving the dispute; these costs include shipping costs absorbed, use of internal resources to mitigate the customer dissatisfaction, issuing a credit memo or refund check, restocking the product and review of the process which allowed the low-quality product to be delivered in the first place. The path to correcting these financial burdens and small annoyances within the business starts with a brainstorming process to really understand what went wrong and in which department.
Understanding the Root of a Quality Control Problem
What is the analysis to keep this problem from happening again? A few obvious questions to ask include: How did a defective part get to a customer? Did quality control fail at an inspection point? Does the warehouse have a separate area for defective parts? Did the inspection of material take place? Was there adequate supervision of the shipping department? Was there adequate training for the service provider? Was the supervisor aware of the problem? Have we had issues with this employee in the past?
The more important questions to assure high quality and customer satisfaction start at the beginning of the process. If you refuse to accept the execution of poorly made products, they won’t exist within your organization. Quality must be pervasive and each person in the Company must know how to do their job according to the effective procedures established.
How does each person’s understanding of high-quality performance contribute to profits? Profits improve with the smooth integration of all processes and knowledge transfer of pertinent information. Customer satisfaction is the ultimate objective and setting a high expectation of performance by each team member will improve the overall quality of products and services. Customer satisfaction without costly delays, wasting assets (money, time, materials, and equipment) and duplication of effort, results in higher profits. Therefore, each team member has the responsibility of producing high-quality work.
What Does High-Quality Performance Look Like?
With knowledge of high-quality expectations, each department operates correctly with a clear understanding of their role. Defining quality control expectations for each role in the company is an important part of achieving quality.
So, what does high-quality performance look like?
- Salesperson – As the customer is defining their needs, the salesperson focuses on meeting those needs. Let’s say the customer is looking for an outcome requiring special handling, the salesperson will work closely with manufacturing, pricing, and possibly others to solve the problem. They will also document the solution, the costs and pricing to assure customer satisfaction. (We avoid over promise/under deliver and take the first step toward customer satisfaction.)
- Order Entry – This team is aware of the importance of variances from the norm and clearly notes such in the order. (We avoid misunderstanding the customer’s expectations and move closer to customer satisfaction.)
- Purchasing – After providing input on the solution, purchasing gives vendors a “heads up” on possible needs. They adjust quality, timing, and quantity of the order, taking into account any special recommendations. (We avoid rush deliveries, prevent quantity and quality issues with raw materials, and integrate the customer’s needs with those of manufacturing.)
- Receiving – They understand the importance of the quality differential in this order and perform a qualitative as well as quantitative test of the material. Thanks to effective procedures, receiving knows to pass on the appropriate “paperwork”. (We avoid expending internal manufacturing resources using the wrong raw material.)
- Accounts Payable – Properly paid vendors make the process easier for purchasing to arrange special requirements. Quality control procedures and a clear budget for the business help them better understand the Company-wide importance of timely and accurate processing. (We avoid ordering delays and special processing for inaccurate or slow payments.)
- Manufacturing – Production planning and scheduling is prepared to meet the customer requirements. All processes support the timely, accurate, and efficient production of the customer’s needs: materials are ready in the quantity and of the quality necessary, shop schedules move efficiently through the stages of production with virtually no delays and operations perform without error wasting no material or labor. Production can now fulfill the order with the least resources and waste possible. (We avoid waste and delay to meet the customer’s needs effectively and profitably.)
- Shipping – Customer satisfaction hinges on the receipt of the right product at the right time. The goods are provided at the time and place required with proper notice to the internal team. (We avoid customer dissatisfaction from delays or inaccuracies, ultimately getting closer to complete satisfaction and higher profits.)
- Billing – Billing the customer accurately and in a timely manner will assist in the collection of money due to the Company. They send the invoice to the proper customer with the correct amount and mail to the correct address. (We avoid unneeded customer questions, consuming internal resources and collection problems related to improper billing, as well as maintain cash flow to support operations.)
- Cash Receipts – Accounting posts payments timely and accurately to customer accounts. (We avoid waste of internal resources, answering unneeded customer questions, and diluting collections efforts.)
Quality control is a mindset that should be a strategic part of each process in an organization. Random problems are likely to occur in any system causing unforeseen errors to happen, but when quality control is the basis for the performance of each position in the Company, a higher level of work is expected and achieved. Customer satisfaction means higher profits and there is no better reward for a growing business.
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