How to

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:

1. Was my expectation clearly defined – i.e. did I know what I
   wanted and wanted to achieve? Was that what I communicated?

2. Did I communicate this expectation to the employee /
   supplier?

3. Did the employee/supplier understand my communication?

4. Was the product /service not delivered due to unavailability of
   the correct support (human, equipment, systems, tools)?

5. Was the correct level of authority given to achieve the
   task?

6. 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

• Waste

• Scrap

• Rework

• Returns

• Complaints

• 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.

Conclusion

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.