When an organization improves conformance in manufacturing or service then It can enhance profit because?

‘Quality Management is defined as the act of overseeing all activities and tasks that need to be performed to achieve a desired level of excellence. This includes implementing quality planning, assurance, control, and improvement.

The term ‘quality’ in business focuses on the savings and the additional revenue that organizations can generate by eliminating errors throughout their operations, thereby producing optimized products and services that satisfy customers. Errors can be of any form—for example, producing the wrong number of parts in an assembly line, sending invoices to customers who have already closed their accounts, or giving the wrong quotation of requirements to the supplier. Most of these errors are common and the costs incurred seem minimal at an initial stage; however, over a period of time when the same mistakes are repeated, the costs add up to be a significant amount.

A Quality Management System (QMS) is defined as a set of coordinated activities required to produce the desired quality of products. This quality should be in conformance with specification standards that meet customer requirements in the most effective and efficient manner.

Benefits of QMS

When an organization has fully documented QMS, it meets two important requirements:

• Customer Requirement:

  It gives the customer confidence in the ability of an organization to deliver the desired output and provide consistent service.

• Organization’s Requirement:

  It gives senior management the confidence that service can be provided at an optimum cost with efficient use of available resources.

Other than meeting customer and organization requirements, a good QMS will also help to:

1. Set goals for employees
2. Build motivation within the company
3. Establish a strong vision for the employees
4. Set standards for employees
5. Fight resistance toward change within the organization
6. Improve process control
7. Reduce wastage
8. Increase market share
9. Facilitate training

Quality Management Systems in Practice

Depending upon the organization’s needs, there are many quality management systems in practice which include:

• Six Sigma
• Standardized Systems (ISO)
• Total Quality Management (TQM)

Six Sigma

Six Sigma was developed by Motorola in the early 1980s as a method to measure and improve high-volume processes (production/assembly lines). The main objective is to measure and eliminate wastage by achieving near-perfect results. The term ‘Six Sigma’ refers to a statistical measure with no more than 3.4 defects per million. Companies such as General Electric, DaimlerChrysler, and Ford have credited the Six Sigma quality management technique to have saved them billions of dollars in revenue.

Earlier used only in the manufacturing process, Six Sigma has found many takers in non-manufacturing processes such as billing, marketing, finance, accounts payable, and information systems.

The lessons learned on the production lines using the Six Sigma methodology might seem too structured to be effective to analyze processes that are not standard and repetitive as in manufacturing situations, but the theory of Six Sigma is flexible enough to suit any process.

Certain processes are used in Six Sigma to keep things organized. One such process is the DMAIC method, which stands for Define, Measure, Analyze, Improve, and Control.

The projects that use the Six Sigma methodology are carried out by professionals who are certified in Six Sigma certifications such as Six Sigma Yellow Belt, Six Sigma Green Belt, and Six Sigma Black Belt. Different colors of the belt showcase that an individual has gone through extensive training in different levels of expertise in Six Sigma methodology and has passed subsequent certification examinations.

Benefits of Six Sigma

Implementing the Six Sigma quality management system helps an organization to:

• Improve bottom line cost savings
• Improve the quality of product/service to reach the desired level of excellence
• Reduce process cycle times
• Develop the skills of the staff
• Adhere to world-class standards
• Create competitive edge
• Improve ROI

Standardized Systems

The International Organization for Standardization (ISO) has created a few standards with regard to Quality Management Systems in the ISO 9000 series. The ISO 9000 standards for quality management are not specific to any product or service but apply to the processes that create them. These standards are generic in nature, and hence can be used by manufacturing and service industries anywhere in the world.

There are many organizations around the world that seek ISO certifications. To get ISO certified, organizations need to adhere to their prescribed standards and have to pass a detailed audit conducted by an ISO auditor.

Benefits of Having ISO 9000 Accreditation

• Increased credibility with current and prospective clients
• Better customer satisfaction
• Improved customer service
• Reduced operational expenses
• Improved internal communication
• Improved business reputation

Total Quality Management (TQM)

TQM is an approach in which quality is emphasized in each and every aspect of the business for an organization. It has long-term goals that are aimed at the development of quality products and services.

The role of management in TQM is to develop a robust strategy that is flexible enough to be adapted to every department in the organization. Once the TQM strategy is defined, it must be communicated to be deployed effectively across the organization.

Some degree of employee empowerment is also included in the TQM strategy. It usually involves both departmental and cross-functional teams to develop strategies to solve quality problems and make suggestions for improvement. Here the management and employees can become involved in the continuous improvement of the production of goods and services at desired levels. 

Benefits of Total Quality Management System

Implementing TQM helps an organization to:

• Be more competitive
• Establish a new culture that enables growth and longevity
• Provide a work environment where everyone can succeed
• Reduce stress, waste, and friction
• Build teams and partnerships

Having an efficient quality management system in an organization will help you to accurately determine the expectations and needs of the customers, and translate these requirements into quality products. For the successful implementation of a quality management system, it is of paramount importance that the senior management provides their support and takes the lead in the initiative, to design a suitable quality policy in the organization and establish measurable goals.

What are three ways that improved quality control can reduce costs for a company?

How can quality management be improved in an organization?

How quality improvement can lead to reduced costs and improved profitability?

Why does quality process improvement very important in a business or in an organization?