GP Optimizer Winter 2013: Improvement in Quality Improves the Economy

Written By Quality Essentials Suite for GP Optimizer
Winter 2013 Edition by Rockton Software

Recently a report, researched and written by CEBR (Center for Economic and Business Research), a UK based organization, identified the impact of quality improvement processes across three aggregate national measures of performance. These measurable points, all related to UK based values, were GDP, revenues to treasury from corporate taxes and the unemployment rate. In each of these data points the model showed a demonstrable improvement in aggregate outcomes based on there being a quality management system in use in each of the examined entities.

The research results were achieved by aggregating data across eight diverse sectors of the economy, seven of which represented over 80% of GDP in the UK. The actual activities of the examined sectors differed, for example manufacturing versus health and social work, so the definition of what comprises a quality management system was necessarily broadly based, but it was required that the systems be formal.

It is true that the systems of taxation, corporate governance and industrial entities in this research are not identical in all respects to our North American based environment. Still, there is valuable information to be gleaned from this research specifically because the results are presented through universally understood economic metrics. Readers interested in more details will find an overview of the research and investigative methods documented in the November 2012 issue of Quality Progress magazine.

One can argue that achieving similar economic benefits is as simple as adding labor to the workforce. But, what we have experienced globally in the last few years is that entities, in the face of lack of confidence about the health of the economy overall, are not willing to add labor to payrolls. Therefore if we want to see improvements in hiring we have to find a justification for adding labor other than the historic ‘confidence in revenue growth’ model.  This is where the UK based research can substantiate an alternate approach.

Effective use of the data from quality improvement systems could be the impetus for increased hiring in this environment where ‘confidence’ has failed us. Such systems can quantify for entities how or where added labor will create benefits by reducing errors and waste while also helping to maintain focus on those improvements. Consequently margin gains can be estimated so that hiring can be justified, encouraging entities to disregard top line revenue growth as the only immediate measurable to justify hiring and instead support decision making around other relevant values.

Organizations already invested in their formal quality systems will have immediately available to them methods and tools that help identify waste and errors.  For those not yet engaged in formal quality improvement processes, beginning such an engagement could be as simple as starting to track non-conforming events or products with accompanying costs.  Define a formal method for evaluating which non-conformances should process through to root cause analysis, so that the source of problems can be identified.  Upon completion of root cause initiate and track projects for corrective action that eliminate these sources.

Many organizations successfully launch and manage these types of processes with Microsoft Office tools or with a low cost multi-user product such as the QA Action/Events module from Quality Essentials Suite.  Key to success is that the tool set.

A) Support formal processes with date controls, status fields etc.
B) Be securely multi-user
C) Have capability for quickly and accurately charting and analyzing progress
D) Incorporate costing tools to measure impacts and target successes

Visit www.qualityessentialssuite.com for additional information or to view a product demonstration. You can also read the blog www.qa4erp.com to learn more about the other benefits of formal quality improvement processes.

Download GP Optimizer Winter 2013 Edition by clicking here!