The leap towards becoming a world-class manufacturer is challenging, but a new study sheds light on the steps that companies can take to improve performance and aim for world-class status.
Companies around the world look for innovative ways to differentiate from competitors and become more attractive to customers who are more informed and more demanding than ever.
This article was originally published by Industry Today Magazine – Author Luciana Paulise – Nov 2016.
According to the Global State of Quality 2 Research and compared to a similar study in 2013 that examined quality improvement in manufacturers worldwide, fewer organizations in 2016 view quality as simply a compliance activity or a check- the-box opportunity. Both the 2016 and 2013 studies were conducted by ASQ, a global network of quality improvement professionals, and APQC, an industry leader in quality and continuous improvement benchmarking research. In the latest iteration of the Global State of Quality, nearly 1,700 companies from 20 countries participated.
The latest data shows that more manufacturers now see quality as an opportunity to gain a competitive edge, and as a strategic asset. In fact, the research shows 36 percent of all respondents say their company views quality as such, up from 22 percent in 2013. But the study finds that 96 percent of world-class manufacturers see quality as strategic asset and competitive differentiator, tripling the non-world-class rate. Like Motorola did with Six Sigma in the 1980’s, Toyota with their Toyota Production System in the 1990’s and then Steve Jobs with his passion for perfection, world-class organizations have discovered the hidden power of using quality not only for compliance matters but also as a key differentiator. They are making it part of their culture and the way they work, to satisfy the customer, train their teams, and improve their measurement methods.
World-class companies have the strongest end-to-end quality practices with visibility into investment, cost, and resulting performance, and this is not just within the organization, but also extended to suppliers. Basically, world-class manufacturers instill quality as part of their culture, and they are willing to showcase it to their customers. They have used quality to directly increase profitability through five major drivers:
- Exceptional customer experience: Understand product/service performance through customer’s eyes, hence develop visible metrics on performance against customer needs.
- Effective use of data: use quality measures to establish strategic goals that drive performance, measure business processes, measure the cost of remediation and to support trending and/or predictive analysis.
- Enhancement of the brand: improve the perceptions of product and brand quality and promote it proudly.
- Waste reduction: quality also helps to achieve internal customer satisfaction, by improving efficiency, ensuring standardization and reducing wasted time and mistakes.
- Innovation: organizations spur innovation mostly through the use of quality tools and through creating open and collaborative environments with a focus on idea sharing. 50 percent of world-class organizations offer monetary rewards for ideas.
Outlining the characteristics of those top-performing companies allows non-world class organizations to benchmark against and define an action plan to help advance toward world-class quality.
Quality should no longer be focused only on customer service, but on the total customer experience. Superior quality requires high levels of customer involvement (internal and external) throughout the entire life cycle of a manufacturer’s activities. Ninety-three percent of world-class organizations center their performance measures on customer needs. As Edwards Deming used to say, “the customer is the most important part of your production line.” Seventy-one percent of world-class organizations involve customers in quality discussions (more than double the non-world-class rate) and are twice as likely to share customer feedback and intelligence across the organization.
The most important shift seen in industry in recent years is that now companies are learning that both the external customer and the internal customer are the most important part of the production line. Quality of back office activities are also part of providing a superb experience to the final customer no matter the industry.
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The ASQ Global State of Quality 2 Research: Discoveries 2016 and three Spotlight Reports can be accessed for download at http://asq.org/global-state-of-quality/.
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