Performance Improvement
H. JAMES HARRINGTON

I have heard quality professionals say hundreds of times, "Quality is first among equals (cost and schedule)." When I think about this statement, a lot of questions come to mind, including:

 If quality is something different from cost and schedule, what is it?

 If three things are equal, how can one of them be first?

 Is quality more important than cost and schedule? And, if so, who is it more important to--the supplier or the customer?

Answer to question No

 If you assume that quality is different from cost and schedule, you need to discard the belief that quality is simply satisfying the customer. To have a satisfied customer, the product or service must be priced right, be there when the customer needs it and perform to requirements (price, schedule and quality).

For this discussion, let's use Philip Crosby's quality definition: conformance to specifications (requirements). This separates quality from cost and schedule very nicely.

Answer to question No. 2

If quality, cost and schedule are all equal, then none of them come first. If they are all high priority, then one of them can be more important than the others. If these are the three highest priorities within an organization, then how important are profits, employees, customers and technology? Are these four items less important? I don't think so.

Answer to question No. 3

If quality is conformance to requirements from the supplier's standpoint, cost and schedule should always be sacrificed to keep service or products that don't meet requirements from being shipped to the customer. In this case, certainly, quality comes before cost and schedule, unless the customer is willing to sacrifice the specifications.

From a customer's standpoint, quality may or may not come first. I recently flew to Buenos Aires with a connection in Miami. I had two options: fly on an airline that had what I considered to be poor service, poor seats and bad food quality, but that would give me a 90-minute connection between flights; or fly on a quality airline and wait more than 11 hours between flights. In this case, schedule won out over quality; I took the lower-quality airline.

From a cost standpoint, I believe that the buyers of a full-sized, four-door Ford sedan would rather get a Lincoln Towncar if they could get one for the same price. Ask yourself this question: "Would you be willing to pay twice as much for your TV if you could get one that was twice as reliable?" I'll bet the majority of you would sacrifice reliability and quality for price under these circumstances.

From a customer's standpoint, neither quality, cost nor schedule always comes first. When customers evaluate the products and services they receive, they make trade-offs between all three key factors in order to maximize value. The challenge that suppliers face is to provide their customers with the maximum value, which often is a balancing act between quality, cost and schedule.

You aren't servicing your customer if you have the best-quality product or serv-ice, yet the customer can't afford to buy it. Likewise, having a high-quality product that is priced right but not available when your customer needs it doesn't lead to satisfied customers.

I recently saw a name brand videotape advertised at Service Merchandise for an extremely good price ($1 per tape). I arrived at the store one day after the seven-day sale started to find out that they were sold out. I asked for a rain check but they refused, stating they didn't think they would be getting more tapes in. (Note: They didn't advertise that the sale was good only for the merchandise in stock.) I left the store and went to another store--The Wherehouse--where I bought 15 videotapes at $2.10 each. I will be very reluctant to go back to Service Merchandise the next time I want something. In this case, schedule and price were more important than quality.

It is much easier to get to zero errors (perfect quality) and zero late shipments (perfect schedule) than it is to get to zero cost (perfect cost). As we reach closer to perfection in quality and schedule, cost becomes the major driver in the customer's value equation.

Your customers want value, so give it to them. Best value wins customers; best quality doesn't.

About the author

H. James Harrington is a principal at Ernst & Young and serves as its international quality advisor. He has more than 45 years' experience as a quality professional and is the author of 12 books.

Harrington is a past president and chairman of the board of both the American Society for Quality and the International Academy for Quality. He can be reached at 55 Almaden Blvd., San Jose, CA 95113; telephone (408) 947-6587; fax (408) 947-4971; or e-mail jharrington@qualitydigest.com .

Visit his Web site at www.hjharrington.com .