Enterprise Quality Management System (EQMS)
Cost of Quality Definition
The Cost of Quality is often a misunderstood or misapplied metric, this post gives a clear and concise Cost of Quality definition.
Executives today are making quality management strategy a focal point in their operations and as a result, the role of the Chief Quality Officer is quickly gaining ground in both popularity and relevance. Couple emerging technologies, such as Enterprise Quality Management Software (EQMS), with the task of changing a corporate culture to consider quality across the value chain, and a CQO has a significant challenge before him or her.
We recently had an interesting conversation with the CQO of a large, global electronics company. He explained to us some of the biggest pain points he’s experienced in integrating quality across the organization as well as the main drivers of the initiative’s success. We spoke about cultural shifts, communicating quality strategies, supplier quality management, and emerging technologies.
In this blog, we'll touch on the takeaways of our conversation and offer our own insights on the CQO role. We'll also help to determine if your organization needs a CQO.
Control the Cost of Quality with Culture
As we’ve noted recently, lowering the Cost of Quality and ensuring high quality products should not be viewed as the responsibility of a single department or person, rather it should be a main focus of the entire organization. When companies begin to instill quality management across different areas of the value chain, PLM, EHS, MOM, CRM, and SCM, this opens the door for cross-functional collaboration and decision-making.
Market leading companies are creating a culture that promotes and supports quality management. Although we advocate for an organizational approach, this initiative requires continuous backing from the top down. Executive buy-in, starting with the CEO and reinforced by the CQO, acts as the fuel for quality to spread throughout the enterprise.
Use the CQO as a Symbol of Change
Establishing the role of a CQO has internal and external benefits. Internally, as the shift in culture requires executive backing, the CQO can spearhead the initiative. Certain departments may be reluctant to adopt company-wide changes, since they often result in additional performance pressures. For instance, metrics such as Cost of Quality and its components the Cost of Good Quality and the Cost of Poor Quality, Scrap, Rework Rates, and Overall Equipment Effectiveness enhance transparency into operations, holding people, processes, and technology more accountable. Transparency may come with backlash, but it’s certainly worth the fight.
Externally, by announcing the appointment of a CQO, companies can communicate to the public that creating high quality products is a corporate objective. This can help win new customers and be especially important in the time proceeding an adverse event, such as a recall, or when moving operations into a risk-prone geography.
Make Supplier Quality Management a Priority
With the growing expansion of the global supplier network and the increased use of outsourcing, the quality of products is closely tied to supply-chain performance. Because of the impact that supplier quality can have downstream, we're seeing hybrid quality management roles appear that cover both quality and SCM. An executive, for example, may be the SVP of quality and supply-chain simultaneously. This overlap is significant enough for supplier quality management to be a high priority of the CQO.
Leverage Enterprise Quality Management Software
Today, there is whole industry of software vendors focused on developing quality solutions for the manufacturing industry. Unfortunately, many executives and managers implement point solutions for point problems, rarely considering how disparate software applications will impact the long-term quality management strategy. We believe that it's important for decision-makers to be well-educated on emerging technologies, especially when it comes to quality.
EQMS, for instance, provides a suite of processes and functionalities that companies can use to manage quality across the value chain. CQOs should understand that the EQMS market is maturing, with a multitude of vendors offering targeted solutions. How these applications can be integrated over the long-term into the quality management strategy should be a main focus for the CQO.
CQO in your Organization
As the title itself suggests, the CQO is a representation of quality management within a company. However, while integrating quality across the value chain is a great task to undertake, the position is for someone who's far more than just a figurehead. Companies that need a CQO rely on the global supplier network, require high quality products to stay competitive, and heavily use technology.
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Cost of Quality: More than Risk and Compliance
Cost of Quality Metric: The Formulation Management
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