Content By Quality Digest

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By: Shellye Archambeau

"Quality is never an accident, it is always the result of an intelligent effort"
—John Ruskin (1819-1900)

A manufacturing company had annual sales of $250 million. Its quality department calculated the total cost of repair, rework, scrap, service calls, warranty claims and write-offs from obsolete finished goods. This aggregated cost, called cost of poor quality (COPQ) amounted to 20 percent of the annual sales. A 20 percent COPQ implied that during one day of each five-day workweek, the entire company spent time and effort making scrap, which represented a loss of approximately $200,000 per day.

Experts have estimated that COPQ typically amounts to 5-30 percent of gross sales for manufacturing and service companies. Independent studies reveal that COPQ is costing companies millions of dollars each year, and its reduction can transform marginally successful companies into profitable ones. Yet most executives believe their company's COPQ is less than 5 percent, or just don't know what it is. All levels of executives recognize that quality is an absolute necessity to survive and succeed in today's business environment. The figure below provides a framework for calculating COPQ as a percentage of sales.

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By: Quality Digest

National Technical Systems Corp. recently purchased a world-class telecommunications product testing laboratory in Calgary, Canada. It’s the company’s third testing facility abroad.

The 14,000 sq. ft. lab includes state-of-the-art chambers, test equipment and instrumentation, and is equipped for advanced radio testing and certification of wireless products, product safety and mechanics.

“Although this laboratory is presently small compared to other NTS operations, it represents a key milestone in our strategic global expansion plan to acquire additional international laboratories that allow us to market our services globally,” says Jack Lin, NTS chairman and CEO. “It also compliments our expanding services and technology in wireless product certification testing.”

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By: Quality Digest

The American Productivity & Quality Center and Fusion Productions recently announced a collaboration to strengthen organizations’ virtual communities and communities of practice (CoPs).

Through the joint offering, organizations and associations can enrich the value they provide their community members by using best practices and guidance from APQC, combined with Fusion’s community software. Specifically, participants will learn how to:

  • Build a business case for a CoP.
  • Design how a community should be managed.
  • Train leaders and employees on how to run CoPs successfully.
  • Develop metrics for measuring the return on investment.
  • Deploy the market’s most popular and easy to use community software.

“Many groups have launched virtual communities that have fallen short because the groups have not appropriately addressed the people and prospects aspects,” says Wesley Vestal, APQC senior knowledge management consultant. “By working with Fusion, APQC can help communities to develop a community strategy and sustain communities by using best practices to enhance the community member experience.”

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By: Quality Digest

Original equipment manufacturers and end users think similarly about how to improve their relationships, according to a new study conducted by Rockwell Automation and Penton Media Inc.

The study, based on interviews with 582 OEMs and end users, compared the two groups’ views on important relationships issues like design cycle responsibilities, buying behaviors and communication channels. It revealed that the groups have similar views in several areas. For example, 85.3 percent of end users and 86.3 percent of OEMs believe OEMs are a primary source of good industry trend advice.

The most divergent responses pertained to questions about procurement costs. Almost 95 percent of OEM respondents believe end users tend to choose machines and components based on lowest cost, while only 78 percent of end users agree with this statement.

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By: Quality Digest

The American Society for Quality has announced it’s seeking applicants to serve on its board of directors for 2005-06.

The ASQ nominating committee will accept applications from senior, fellow and honorary members for the following positions: president, vice president, treasurer and national director. There are two openings for the national director position. Applications are due Oct. 15, and the terms begin July 1, 2005.

Interested parties are encouraged to review the application process at

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By: Quality Digest

In an effort to strengthen the automotive supply chain, the Automotive Industry Action Group will offer crisis management and business recovery training.

The emergency response training is the first of its kind in the automotive industry, says Andrew J. Cummins, executive director and CEO of AIAG. It became available on Aug. 3.

“As recent crises suggest, the supply chain is vulnerable,” Cummins says. “A domino effect in the supply chain may be created when disruptions occur at any single point.”

The crisis management process was developed by DaimlerChrysler Corp., Ford Motor Co. and General Motors Corp. in cooperation with suppliers to help the industry save millions of dollars a year. The group urges suppliers to develop plans for crisis management, citing that many organizations now require suppliers to have them.

A recent study by Michigan State University, “Effective Practices for Business Continuity Planning in Purchasing and Supply Management,” found that companies are courting disaster if their business continuity plans fail to ensure supply chain continuity. Furthermore, the findings suggest that supply chains are increasingly fragile.

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By: Jeffrey S. Goss

Six Sigma, the statistical approach focused on increasing profitability by improving efficiency, has been part of the engineering world since the 1980s. Now, new innovative online and on-campus programs at Arizona State University are shaking up the way people all over the globe are doing business. Former ASU alumni Mikel Harry, a founder of Six Sigma at Motorola; and ASU Professor Doug Montgomery of the Center for Professional Development the Ira A. Fulton School of Engineering, have combined to create a group of online, comprehensive Six Sigma professional certifications.

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By: Chuck Doyle

Many organizations need answers to some key questions about lean and quality management: Is there a difference between quality and value? Should we have two teams, one for continuous improvement and one for lean? What roles would each have? What are the differences?

The source for this confusion is a misunderstanding about the terms “quality” and “value.” Part 1 of this series will deal with this misunderstanding. In Part 2, we will explore the roles, responsibilities and the differences between the two teams at work.

Over several decades, companies have focused their quality initiatives on listening to the customer and reducing defects. Many of these initiatives have paid off and organizations worldwide have improved the quality of their products. Companies that didn’t pay attention to customer needs and quality improvement have fallen by the wayside: They simply couldn’t make it in today’s highly competitive and demanding environment. In both cases, a lot of money and resources were invested in the efforts.

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By: Robert Nix

My first experience with the word “culture” comes from my high school science class. We grew a living organism on a nutrient base, which the teacher called a culture. The girls in class described it using the medical term, “Eeewwwww!” Years later, in the business world, I find top managers subjected to the pressure to incorporate a quality culture into their business, describing it in the executive term, “Eeewwwww!” Like the old cereal commercial, they are told it’s “supposed to be good for you,” which means it doesn’t taste very good.

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By: Quality Digest

Quest Diagnostics recently announced the selection of Instantis’ EnterpriseTrack tracking and management solution for its Six Sigma effort.

EnterpriseTrack will be in use by Quest Six Sigma teams spread across its business units.

“Information tracking and reporting needs for Six Sigma are demanding, often complex and continuously evolve,” says Eric Mattenson, Quest Diagnostics Six Sigma vice president. “Today, the EnterpriseTrack product from Instantis provides us with an elegant solution designed for Six Sigma that meets our project and knowledge management needs and provides a user interface simplicity that is driving rapid adoption by our Black Belts.”

Quest Diagnostics operates more than 2,000 patient centers, 155 rapid response laboratories and more than 30 regional laboratories. It performs more than one million tests a day.