Delivered Quality: The North Star of Embedded Quality Success

What are Delivered Quality, Embedded Quality, and Quality 4.0?

• • • Delivered Quality: The customer recognizes the quality of your product, service, or solution. Delivered Quality can be characterized by multiple aspects important to the customer, such as reliability, consistency, fit for purpose, performance value, etc.

• • • Embedded Quality: A comprehensive set of strategic initiatives, operational architectures, and business capabilities implemented across the value chain to focus actions and culture on delivering quality outcomes to the customer.

    • Quality 4.0: The digital transformation of quality management, including the application of automation, advanced analytics, and artificial intelligence to data, processes, and workflows.

Embedded Quality's Focus

Embedded Quality (Figure 1) enables Chief Quality Officers to focus on delivering quality outcomes through partnerships with value chain functions and integrating Quality 4.0 initiatives into a comprehensive quality strategy.

Figure 1: Embedded Quality Framework

Embedded Quality Transformation is not a rebranding of previous transformation efforts around quality but brings a laser focus on the end state of an Embedded Quality transformation, the customer.

The Importance of an Embedded Quality Strategy

Our research on Industrial Operations Strategy found that 47% of manufacturers lack an impactful strategy for industrial operations. It is almost as if these companies assume they will do things next year the same way they did them last year. Quality is typically a sub-function of Operations and suffers from the same perspective. Having a strategy is the first decision to be made because, to paraphrase a famous quote, “If you don’t know where you are going, any road will take you there.”

Many Chief Quality Officers do not have a value-chain-spanning strategy for taking their function to the next level of performance or for how they will contribute to raising visibility, performance, and influence across the company. Forty-eight percent of companies have "within-quality" efficiency as their primary quality strategy. Embedded Quality Leaders are 38% more likely to have a comprehensive quality strategy than follower companies.

Achieving Real Benefits in Tough Times

Manufacturers need every advantage they can get in today's fast-paced world. These have been challenging times for manufacturing.

• • • Experience levels significantly dropping

    • Degrading performance in safety and quality

    • Recalls on the rise across (almost) all industry sectors

    • Deprioritized and lacking transformation business cases

    • Extension of asset useful life

Energizing the value chain by focusing on Delivered Quality outcomes is good for business. Embedded Quality Leaders are achieving significant business benefits (Figure 2) from their efforts, including a 23% improvement in Net Profit, a 29% improvement in throughput, and a 15% improvement in first-pass yield.

Figure 2: Embedded Quality Leaders Get Results

Delivered Quality outcomes to the customer are foundational to a successful industrial operation.

Without consistent, good Delivered Quality to the customer, many other goals and objectives become more challenging to achieve. Some things that good Delivered Quality enables:

• • • Flexibility

    • Innovation

    • Responsiveness

    • Reliability

    • Progress on Net Zero Goals

Without it, industrial operations become constrained, with limited options to win against the competition.

Embedded Quality Strategy: The Key Elements

What should an effective quality strategy include? First, it must align with and complement the enterprise and value chain strategies.

Strategies with limited, within-function scopes are significantly less likely to gain support in the C-Suite. This is undoubtedly true for quality transformation. Within-quality business cases are 52% less likely to gain approval than business cases spanning the value chain. Efficiency and cost reduction of the quality function do not move the needle on achieving a Delivered Quality competitive advantage.

Some elements of winning Embedded Quality Strategies include (Figure 3):

• • • Support for company zero goals

    • Influencing partner functions across the value chain

    • NPI success

    • Improving Predictive Quality capabilities

    • Supplier collaboration

Figure 3: Value Chain Spanning Quality Strategy Enhances Positive Culture

What are Embedded Quality Leaders doing differently?

Here at LNS Research, leaders are defined by their results. Leaders are companies that see significant and meaningful benefits from their transformation efforts. While there are dozens of best practices that leaders are doing compared to followers, they roll up to three big ideas (Figure 4):

1. 1. 1. Delivered Quality is the North Star. Delivering quality outcomes to customers is the point of a quality transformation. This is the guiding principle for strategy and technology decisions to support the Delivered Quality competitive advantage.

      2. Enhance positive culture with a quality strategy that spans the value chain. An effective quality strategy goes beyond efficiency to collaboration and partnership with value chain partners focused on delivering consistently good quality products to customers.

      3. The value chain is tied together to deliver the promise of Quality 4.0. Quality 4.0 is about the digital transformation of quality management. Embedded quality leaders are extending that concept to the ends of the value chain, engaging the design teams as early as concept development and the fulfillment teams to post-delivery service through a Quality Data Architecture that ties the value chain together with closed-loop processes.

Figure 4: Embedded Quality Leaders' Three Big Ideas

One final thought on the differences between leaders. Quality transformation has long been marked by leadership from outside the quality function. In this latest research, only 14% of quality transformations are led by the Chief Quality Officer. However, when looking at those focused on Delivered Quality as their North Star, that figure more than doubles to 36%, meaning that Embedded Quality leaders have earned their license to scale their own transformations.

Summary & Recommendations for Chief Quality Officers

Developing and implementing an effective quality strategy enhances a positive culture of quality by building partnerships across the value chain. This is supported by a quality data architecture aligned with a laser focus on delivering quality outcomes to the customer.       

Heads of Quality should:

1. 1. 1. Build credibility across the value chain. Bring the Digital Voice of the Customer data to key parts of the value chain in Design and Fulfillment to help improve existing products and new product designs.

      2. Embrace Technology. Adopt a Quality Data Architecture approach to leverage data from across the value chain and apply advanced digital technology, such as Advanced Industrial Analytics, AI, and Digital Twins, to create valuable insights from quality data.

      3. Develop and Align the Quality Strategy to the North Star. Cast a wide net to align with corporate and partner function strategies and embed partner objectives, like NPI Success, in the quality strategy.