Quality is often defined as conformance to expectation. What often gets lost is that quality affects all aspects of operations and impacts every aspect of organisational design and delivery.
With tenderprenuership and state supply chain management coming to the fore in recent debates and policy statements, it is very important that we need to practice that the art of communicating expectations.
It is suggested that a range of factors determine the conformance to expectations including
Completeness: Does the product / service being specified satisfy the needs of the client completely?
Benefit: Does the product / service give a significant benefit to the user?
Non-redundancy: Is the service unique and solve a unique or specific need of its users?
Measureable: Is the results of the service measureable and repeatable?
These principles are useful in putting together specifications and both internal / external service definitions. If you wanted a new car you would not be happy if the specification was for a car. Cars range in make, model, size and a 1929 Model T Ford is also a car. You would have to specify the purpose of the car, what it will be used for and other specific parameters that would allow for the correct vehicle to be delivered to you.
We see the same when we manage employees. Often in authoritarian management styles and high performance cultures there is a tendency to instruct rather than to consult. This results in lowering quality as the tendency is to deliver on what was requested, rather than what was expected.
We are often not clear about our expectations and then we are surprised when the results are not what we set out to achieve.
As business and individuals there are three lessons that we can learn from a better understanding of quality.
The first is to know what we want. Quality comes from good planning and somehow management has decided that planning is old-fashioned and not in line with agile and fast execution methods. It is still critical to plan and to have a clear understanding of the products and services that the customer wants. The purpose of agile and fast execution methods is to deliver faster to the client’s expectations – not to forget that the client has expectations. Quality is still the correct measure.
The second is to ask for what we want and to be explicit about the conditions under which we want to consume these services. There is nothing worse that poorly written or generic requests for products or services as we end up with inferior quality. As managers it is a reminder that we need to be clear on what we expect from our employees.
The third aspect is that there is a price and a value to quality.
There should be a consequence to non-performance in relation to quality of a product or service. A poor product or service should be challenged. This starts with the way we request products or services. Tenders have become fairly common as a method for requesting products or services – but often we find that these are poorly constructed, does not conform to the product or service that is requested and does not benefit the organisation requesting it. Arguably we have become too focused on all the factors surrounding the tender process as far as it is about transparency and fairness and achieving political objectives – that we have forgotten its purpose.
One of the primary methods to communicate our expectations is a tender / job description or service definition.
This document is a mechanism by which to balance the budget of the organisation with the quality requirements and to achieve both a timely and balanced delivery of this product or service. Procurement and supply chain management must be used to accelerate service delivery. Mechanisms such as incentive contracts can be used to accelerate delivery. If I paid you 3 percent more to deliver 15 percent faster – that may be better than to ask you to quote a firm price. Penalty contracts, escalation contracts, cost re-imbursement and ceiling price contracts are all mechanisms that encourage bidders to be innovative while rewarding quality.
Quality of a process is often measured as the number of defects that the process produces. Every time a process does not conform to the expectation that is attached to it – this is one more defect. So as a manager – everytime your employee is not producing what you expected – add one to the defect list. Now as yourself why this defect occurred ?
A quick checklist would include:
- Was my expectation clearly defined – i.e. did I know what I wanted and wanted to achieve? Was that what I communicated?
- Did I communicate this expectation to the employee / supplier?
- Did the employee/supplier understand my communication?
- Was the product /service not delivered due to unavailability of the correct support (human, equipment, systems, tools)?
- Was the correct level of authority given to achieve the task?
- Was the timing of the task communicated and agreed?
If these factors are all clear then there is a clearly a basis for questioning performance. Based on the nature of the breach there can then be specific remedies. These breaches should be designed into contracts and should protect the organisation from a loss of value. The converse is also true – where quality is excellent or can be delivered on an accelerated basis – these should be incentivised.
Some of the core metrics that organisations can look at to start working towards quality include:
- Process defect rates – the number of products that did not conform to expectations
- Yield rates – i.e. the number of products that did confirm to expectations
- Wait times
- Accuracy of information
- Repeat requests
- Financial loss for customer or organisation
Cost of quality is typically defined as
Cost of prevention: Defined as the systems and processes necessary to ensure that quality is not compromised.
Cost of appraisal: Cost of ensuring that materials and products meet quality conformance standards and includes inspections and field tests of materials.
Cost of internal failure: The cost of losses from waste and having to reproduce products that did not conform, or that was inferior.
Cost of external failure: The cost of replacement including warranties, repairs, legal fees and lost opportunity costs.
It is important to start by looking at processes that are out of control on to start monitoring the defects in this process. If we understand why these defects occur, then they can be addressed.
Where is your organisation paying the most for quality? The cost of prevention through correct design and communication of expectations is drastically lower than the cost of external failure. By measuring the extent of losses – we can increase savings through process efficiencies.
Quality lives in every interaction that the organisation has with its employees, suppliers and systems. It is a core value that helps organisations be organised. Understanding quality can improve the employee, systems and supplier performance of organisations at all levels. This article presented some tools to assist with this process.