Three Ways Quality Drives Innovation

Posted by Dan Jacob on Fri, Sep 15, 2017 @ 09:08 AM

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1-ProductFlow.pngQuality can be a tough job.  Fighting fires, preparing for being audited, performing audits, scrutinizing risks and finding root causes, monitoring suppliers, adapting to new customer requirements and updated standards, and so on.  Then acquire a dozen companies (or be acquired), and replicate all of this work at business units, sites, and suppliers around the globe.

It’s busy, it can be complicated, and amid all this activity we can lose focus on the bigger picture.  The chart below shows the top strategic objectives of quality.  While all of them are undeniably important, they clearly show that quality’s priorities are managing costs (cost of quality, cost of non-conformances, cost/risk of non-compliance, etc.).  It’s a cost center versus a value center, and focused on compliance rather than innovation.

Quality - Top Priorities

So how can we change that?  Is it even possible to change it?  Of course, quality does need to ensure compliance and improve operational and financial performance, but can quality also be an innovation leader?  The answer is “yes,” and by doing the same things we do today, but with a twist.  As an example, let’s look at customer complaints.

Customer Complaints

Customer complaints, a core quality management process, can become a source of innovation, both large and small.  Customer complaint volume is the most widely tracked quality metric, and a common outcome of the customer complaint process and metrics are corrective actions.

Small Innovations

Corrective actions themselves may lead to small innovations — new mechanical geometry, new electronic hardware, new code, new chemistry, a better product fit for the customer.  Cumulatively, these small innovations add up to sizeable impacts.  Of course, some corrective actions are just simply incremental improvements, but do you track the ones and how many result in innovations?

It’s important to track, highlight, and even celebrate these small innovations.  Use them to change the dialogue about quality within the quality team and throughout the organization.  Did you know that quality’s alignment to executive strategy is understood corporate-wide at only 13% of manufacturers (LNS data, n=171)?  Refocus the dialogue around quality’s role in innovations in peer discussions, and watch that change.

Large Innovations Through Technology

However, the voice of the customer can lead to big innovations as well.  For instance, one manufacturer of automation equipment was plagued by low failure rate but very high cost and seemingly random failures.  Customers complained, loudly, because these failures resulted in plant downtime.  The manufacturer exercised innovation by deploying connected diagnostics paired with predictive analytics.  The innovation created a competitive advantage through increased performance, higher customer satisfaction, higher customer retention, and new sales and services contracts.

Many quality executives are not aware that quality improvement is a top use case for connected devices and predictive analytics.  CIOs and CDOs (Chief Digital Officers) are increasingly likely to have initiatives around the Industrial Internet of Things (IIoT), connected devices, and predictive analytics.  Merging these initiatives with customer complaints results in large and impactful innovation.

Customer Product Abuse, or a New Market?

Customer complaints often reveal customer product abuse – customers that use the product in “novel” and unexpected ways that cause product failure.  Rather than disregard these complaints, successful organizations leverage trends in customer product abuse as a source of new product innovation.  Think of tough tablets, cell phone covers, and kid-friendly devices.

One high tech manufacturer launched a low-cost tablet, expecting it to be an entry point for first-time tablet consumers.  Instead, parents bought the device for their school age children who did what children do best – break them with a sense of purpose.  They diagnosed this, realized there was an underserved market, and relaunched a child-proof entry level device.  Hello, market share.

And the List Goes On…

Customer complaints aren’t just complaints – they are innovation gold.  When you monitor complaints, are you just fixing problems, or are you mining for your next innovation?  And when you’re done with complaints, take a close look at non-conformances, supplier quality, audits, and so on. 

If you have any stories of how quality spurred innovation at your company, I’d love to hear them.  Contact me using the form below or at dan.jacob@lns-global.com.

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Tags: Enterprise Quality Management System (EQMS)