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Arun Hariharan

Management

Is Quality Only for Operations?

Rooting out the mindset that ‘quality isn’t relevant here’

Published: Tuesday, December 8, 2015 - 18:54

During my years of experience helping companies with quality, I’ve observed that in some, any conversation and initiatives related to quality seem to revolve around operations. In manufacturing companies, this tends to be the actual production plant or factory; in service companies, it’s their core operations and customer service areas.

Proof of this limiting mindset is the fact that, in some companies, the quality head reports to the operations head. In other words, the quality department is a subset of operations. In my experience, this immediately prevents, or at least limits, quality from spreading to areas other than operations.

Nobody can deny that operations is an important area for focus on quality initiatives. However, by restricting quality focus only to operations, are some organizations failing to get the full benefits that their quality programs potentially offer?

Isn’t quality—which includes standardized processes, customer focus, efficiency, waste consciousness, performance measurement, and continuous improvement—applicable to sales to HR to admin to (of all things) innovation?

The point is, if it’s worth doing, it’s worth doing well (that is, better, faster, cheaper), and the quality approach can help you to do that. In addition to operations, service, and product quality, I’ve had the opportunity to help companies bring the “quality touch” to areas that were traditionally not touched by it. Let me share some experiences with quality in nontraditional areas.

Sales

In many companies, there’s a mentality that sales is a “sacred cow” that mustn’t be bothered with mundane things like quality. Instead of “burdening” sales with the task of doing their jobs right the first time, one company allowed the sales team to bring in a high proportion of junk (read: incorrect and incomplete) sales orders, then assigned an army of operations staff to separate the good orders from the bad.

After wasting a few months with this arrangement, the company realized that customers weren’t exactly thrilled at having to deal with different people from the company for the same purchase. Often, customers had to repeat the same story separately to different employees. Naturally, many customers started taking their business elsewhere.

As part of a lean Six Sigma (LSS) project (which took some convincing to get approval for), the company for the first time began to measure what percent of sales orders were “first time right” (FTR) and required no rework. Salespeople’s remuneration was partly linked to FTR.

The positive results of just this single initiative to introduce quality into sales were multifold: reduction in cost of rework, improved customer satisfaction, and enhanced company image, not to mention the direct contribution to revenue, profits, and sales productivity. A year after the quality touch was introduced in sales, the CEO acknowledged that the company’s revenue for the year was 35 percent higher than what it would have otherwise been, solely because of the increase in “quality of sales.” The impact on profit was even more spectacular: about 50 percent higher than what it would have otherwise been, given that now an overwhelming majority of sales orders were FTR, and rework was eliminated.

My article, “First Time Right in Sales,” and my book, Continuous Permanent Improvement (ASQ Quality Press, 2014), cover this case study in more detail.

Human resources

In human resources (HR), challenges such as improving the retention of key talent or reducing the cost of hiring have been successfully addressed using measured data and the root cause analysis-based approach of quality. We have also worked with HR to introduce quality and customer-related performance measurements for employees at all levels, beginning with the CEO and senior management.

Administration

In administration, we found that the systematic lean practice of looking for different types of waste and eliminating them resulted in direct, and often significant, cost savings. Just in time (JIT) arrangements with suppliers freed up considerable amounts of cash that was formerly locked up in piles of inventory. Another simple and widely used quality tool—the Pareto chart—was introduced to help the company quickly understand the few areas that accounted for a major part of total costs, so that waste-reduction efforts could be focused on these vital few areas. Also, by virtue of being the result of a quality initiative, waste elimination was made permanent by making it part of the process.

Innovation

The last thing that many people would associate with innovation is a process or systematic thinking—in other words, quality. In some companies, innovation means locking up a bunch of ponytailed dreamers in a room and providing them with reclining chairs and cigars to activate their grey cells. However, we learned that innovation can be the result of—or, at the very least, clearly benefit from—a systematic process.

In my article “Fostering Ideas and Innovation,” and my book, The Strategic Knowledge Management Handbook (ASQ Quality Press, 2015), I describe how a company obtained significant improvement in revenue, new products, market expansion, cost savings, customer experience, and other areas by introducing a simple close-looped process for generating, evaluating, and implementing employees’ ideas, along with an “innovation process” for large business ideas. A big reason why innovation continues to sustain and flourish in this company is the strong influence of the company’s strategic quality program that ensures innovation, too, is a robust, close-looped process.

In several large companies, we were able to quickly spread and standardize best practices, which might otherwise have remained “islands of excellence” in just one part of the organization, across the company. The reason for this was that these companies had a close-looped process for identifying internal or external best practices relevant to their business and implementing them. Their knowledge management processes enable them to ensure that sharing and replicating knowledge is the result of a foolproof process and not left to chance or individual choice. Again, it’s the companywide quality program which ensures that areas like innovation and knowledge management are no exceptions to standardized processes.

Conclusion

The mindset that “quality isn’t relevant here” is a big limiting factor that holds back some companies from achieving the full potential from their quality programs.

In areas like admininstration, HR, and sales, our experience showed that some of the simplest quality practices and tools can give significant results. In many companies, these areas are just waiting for the quality touch.

Philip Crosby said, “All work is a process.” I found this true of most work or functions, and not merely in operations, in every organization that I’ve worked with. Anything that’s a process can benefit from the quality touch. Essentially, quality brings a systematic approach where none existed before.

Discuss

About The Author

Arun Hariharan’s picture

Arun Hariharan

Arun Hariharan, author of Continuous Permanent Improvement (ASQ 2014), and The Strategic Knowledge Management Handbook (ASQ 2015) is a strategic quality, knowledge management (KM), and performance management practitioner with nearly three decades of experience in these fields. He has worked with several large companies and helped them achieve substantial and sustained results through quality and customer focus. He is the founder and CEO of The CPi Coach, a company that provides partnership, consulting, and training in business excellence and related areas. Former roles held by Hariharan include president of quality and knowledge management at Reliance Capital Ltd, and senior vice-president of quality and knowledge management at Bharti Airtel Ltd, India. He is a frequent speaker at quality and KM events around the world. He is also the author of more than 50 published papers on quality and KM.

Comments

Quality touch for the quality department

Absolutely agree with Alan. Standardized processes, performance measurements, deliverables linked to business priorities - in short the "quality touch" - is as applicable to the quality "department" as to others.

Quality for Quality

Physician heal thyself! If quality is to provide proper service to its customers, it would behoove them to exam their own practices, deliverables and metrics.