Cost-of-Quality: COQ is a relative term!

Components of the Cost-of-Quality in Kaizen parlance are as follows.

1/ Costs of external-failures incurred due to failures at customer's end.

2/ Costs of internal-failures incurred in order to handle failures at supplier's end.

3/ Costs of appraisal incurred in order to inspect/audit the adequacy and compliance of quality and quantity of work, and the workmanship as well, as per standards/procedures.

4/ Costs of prevention incurred in order to undertake improvement or failure-prevention activities (as preventative/proactive measures) & corresponding education/training for the same.

First two components are the 'cost-of-poor-quality' (CoPQ) that are incurred after failures. 

Last two components are the 'cost-of-good-quality' (CoGQ) or you can say 'investment' required to prevent a failures in the first place.

The components, rather it's terminology, is relative and hence the  term Cost-of-Quality itself is relative! Use of the components may depend upon the context of the situation.

Is the statement: "If the customer needs to administer incoming inspection on his inputs received from the supplier then that's typically the 'cost of appraisal'!", made by a participant in one of my sessions, 'true' or 'false', for instance?

The statement is 'false'!

It's actually the 'cost of prevention' for the customer. Because she wants to prevent defective inputs from going into the next process. Engaging into inspection activities on the customer's own processes or processing activities, although it's a NVA (non-value-activity or waste) however, is the 'cost of appraisal' for the customer in order to prevent the 'cost of internal failure' in the customer's processes.

Whereas the incoming inspection on his inputs may be is the 'cost of external failure' for the supplier. This is particularly so if the customer engages into 'inspection', a NVA (non-value-activity) 'forced' on to her by herself, because of lack of trust (past dissatisfaction) in the supplier's quality and hence in the supplier's brand image.

Also read a few relevant blogposts hereunder:

Do You Force Customers To Quit
In-a-problem ? No-problem! Dwell-a-while!
Customer or Custo-Mer ?  
Experienced A Delightful Payment ! 
An Experience of Heart-and-Soul 
Do you keep curing your brand ?  
A customer gets what s/he deserves: Shoddy Quality!  
Listen to iceberg of VOC to acquire customers 
Less With More And More Gets Sore 
Should one care for value ?  
Can-changing-thoughts-change-a-nation
Ridiculous Poison-culture versus Maverick Kaizen-culture 
Tolerate Once, Twice, Thrice?  
The Business Of Businesses 
That's how some business partnerships work 
Taken-For-Granted ? You Deserve It !! 
Strategise To Achieve Targets Daily 
Does recognition really matter 
That's How Morons Work
Simplicity Of Theory Of Relativity

Appraisal or Prevention! What's better?

In-process inspection inside a company is typically a 'cost of appraisal' for the company. 

Is the same true for a supplier, for her 'visit to customer for in-process inspection while installing the supplies' at customer's end as a part of the supplier's process!?

It's True, the said installation being a part of the process of the supplier company. 

It's, however, a 'cost of external failure' for the supplier if installation is customer's responsibility and she finds a defect/error in supplies while doing so. Otherwise, it's the 'cost of prevention' for the customer. 

In either of the cases, be it appraisal or prevention, it is a COGQ (cost of good quality) anyway as a part of the COQ (cost of quality)!

One may have to strike a balance though, while deciding upon spending on the latter, meaning on the visit to customer as a part of the process itself, especially in case of high-impact high-value industrial products. 

In any case, the COGQ in general and the other 'costs of prevention' in-house, in particular, may prove to be most beneficial and highly profitable at that.

Why not try validating this statement by calculating the components of Cost of  Quality, for a failed item that reached your customers in past!

Calculating the Cost of Quality (both the COPQ & COGQ), classifying the corresponding components as Tangible (Visible) Costs & Hidden Costs, and comparing them might help.

Also read a few relevant blogposts hereunder:

Do You Force Customers To Quit
In-a-problem ? No-problem! Dwell-a-while!
Customer or Custo-Mer ?  
Experienced A Delightful Payment ! 
An Experience of Heart-and-Soul 
Do you keep curing your brand ?  
A customer gets what s/he deserves: Shoddy Quality!  
Listen to iceberg of VOC to acquire customers 
Less With More And More Gets Sore 
Should one care for value ?  
Can-changing-thoughts-change-a-nation
Ridiculous Poison-culture versus Maverick Kaizen-culture 
Tolerate Once, Twice, Thrice?  
The Business Of Businesses 
That's how some business partnerships work 
Taken-For-Granted ? You Deserve It !! 
Strategise To Achieve Targets Daily 
Does recognition really matter 
That's How Morons Work
Simplicity Of Theory Of Relativity

Judge If It's Paralysis-By-Analysis

A mother instructs her child not to run too fast, not to run outside the given track in the garden, not to run without sports shoes, etc. etc.

She'd seen the child injuring herself earlier in absence of observing the discipline of 'not-to' such as above.

Another mother sitting next to her appeared appreciative. She didn't hesitate to share her experience of how her non-observant son had damaged his hamstring muscles irreversibly. She was concerned that her son had been living with the pain since years.

The pathological and clinical tests, investigations, analysis and treatments are now companion for the lifetime, she said.

Question is, is the former approach, the 'nagging' one, correct?

Obviously, but not so obviously!

Former approach can be called as judgemental based on seed-stage deviations that probably were thought to lead to major deviations or crises if not kept under check. It's about commonsensical risk management.

Latter one, the one that involved accidents and treatments, is an analytical approach that reactively analyses major deviations already occurred.

Former one is based on real-time (genjitsu) observations of real-facts-and-conditions of things and people (gembutsu) at the real-place of happening (gemba).

Latter one usually needs extensive analysis. At times it leads to 'paralysis-by-analysis' that necessitates intervention of judgement in order to unlock the tie and move ahead.

Former approach is easy, fast and proactive although seems to appear like 'nagging'. Of course it is expected to incorporate factual learnings from past.

The latter is difficult, time-consuming and reactive one. It's usually a post-mortem that often necessitates involvement of specialist agencies. Most often it results into repentance of irreversible damage and costs.

Importance of structured analysis however can't be undermined particularly if it's for exploratory or descriptive research in order to study cause-effect relationship of an hypothesis on an observed phenomenon in real-time (genjitsu) or for future innovations.

Also read a few relevant blogposts hereunder:

Prevention: The Best Cure! ... Is it really so?
Treat Root-causes, Not Symptoms !
When Safety Becomes Sorry
Drove To Hell ... Almost ! 
WOW Work-Culture: By Telling or Selling
Take Habits For A Ride
How Many Times Do You Wash Hands
In a Problem?: No Problem ! Dwell A While !!
Part-1
In-big-problem? Wear-hats-to-solve-it! Part-2
How To Make A Difference
Big-Be Or Bug-Be !
A Ride To Hell
Make checklists your friends
Nauseous Communication Gaps
Do You Cleanup-After-Crisis
Raam or Krishna-Shyam: Tell me Hey Raam!
Will It Work Here? 
That's How Morons Work
You seem Reasonable if you appear Un-reasonable
Smart-Moron Who Breaks Your Glass 
Wish To Be Planet-Friendly?: Save! 
Waste-to-eat-sea-to-drink
Don't Save Water on Holi-day
Be Shame-less Or Water-less

Do You Force Customers To Quit

Insurance policy of both my car and scooter was about to expire.

I'd sold off the scooter. So when my insurance agent called me to renew it's policy, I ignored it saying the new owner will take care of it.

After a couple of weeks, when my car went for road tax payment I realised that it's insurance policy had expired. Actually my insurance agent did call me to renew car's policy but I'd inadvertently ignored his reminder thinking it was for the 'sold scooter'.

Red-tape that followed was inevitable. The procedure explained to me by the insurance agent was:

Take the scooter to the insurance company.
They'll inspect it before issuing the policy
They'll charge fine for 'discontinuation'.

Making the job 3D: Dirty-Danger-Difficult for the customer. 

While the insurance agent refused to followup with the company, the road tax agent came to my rescue saying "don't worry". May be the former was lacking motivation due to 'smallness' of business while the latter was interested in acquiring a new customer: Market development strategy as the jargon goes in management world! Theory of relativity!

The road tax agent got the insurance done from another company. Everything home delivered at just ten percent charge of the total official receipt amount.

In fact the policy issued by the competitor was priced at almost thirty percent discount.

The indifferent procedure of the previous insurance company and the behavior of it's agent (the first touch-point as it's brand ambassador) to take the customer for granted costed them business.

The Cost-Of-Poor-Quality (COPQ) to them was not only the loss of business but also a permanent loss of customers. I said loss of customers because bad-mouth publicity by every dissatisfied customer takes away more than one potential ones.

What's the learning?

More than the hard quality itself of your offering, it's the lack of soft quality, your indifference, that forces customers to call it a Quit!

So better to be-aware of behavior!!

Also read a few relevant blogposts hereunder:

In-a-problem ? No-problem! Dwell-a-while!
Customer or Custo-Mer ? 
Experienced A Delightful Payment !
An Experience of Heart-and-Soul
Do you keep curing your brand ? 
A customer gets what s/he deserves: Shoddy Quality! 
Listen to iceberg of VOC to acquire customers
Less With More And More Gets Sore
Should one care for value ? 
Can-changing-thoughts-change-a-nation
Ridiculous Poison-culture versus Maverick Kaizen-culture
Tolerate Once, Twice, Thrice? 
The Business Of Businesses
That's how some business partnerships work
Taken-For-Granted ? You Deserve It !!
Strategise To Achieve Targets Daily
Does recognition really matter
That's How Morons Work
Simplicity Of Theory Of Relativity

One-Is-Better for JIT

In response to an interview on style-tricks, an actress said: Focus on just one body part and show it off.

Whatever may be the message she expected her readers to carry home, to me it was a reminder to complete this long pending blogpost One-Is-Better!

Today when I read news "set up a biz with just one form" it further got reinforced.

In Five-S technique of Kaizen to improve productivity and performance there is a pillar titled Seiri. One-Is-Better¹ is one of the themes or campaigns driven under it.

1-is-better campaign is a means of streamlining operations. It also facilitates 1-piece flow as required to make a quick or JIT: Just-In-Time delivery. 

Take nail-cutting activity for instance. It involves cutting followed by polishing off burrs on nail. Imagine cutting nails of all the 10 fingers at once followed by polishing all 10 at once. You will be free to attend to any other interruption only at the end of 10 minutes if each nail takes 1 minute each for both cutting and polishing. Instead you could get ready to attend to next interruption at the end of every minute if the cutting of one nail at a time is immediately followed by polishing the same. 

It's like freeing up or 'delighting' 1-customer every-minute instead of processing a batch of 10. The latter forces all the 10 customers to wait until the full batch of 10 gets processed. Such batch practice thereby 'delays' the delivery. The latter forces one to work with more stocks than optimum that the former (that is the JIT) advocates as also makes it possible. Not only the former speed up delivery but also it reduces the cost of poor quality (COPQ) part of the cost of quality (COQ). 

Basically, 1-is-better thought is a way to eliminate redundancy. It strips away the un-needed (be it the activity steps or the material resources for activities). Imagine just a single key or 1-key (as pioneered by Japanese auto makers like Toyota, Honda, etc.) that opens a car-door as well as dickey and the fuel-lock. 

A 2-in-1-paper-weight cum penholder, a 4-in-1-color pen, a multi-function printer, a pen-pencil combo, a One-Point-Lesson (OPL), etc. are few other examples. Such 1-is-better ideas in action facilitate lean work culture and eliminate clutter (the visual noise) as well. Thereby they enable focussing on the task at hand. 

In general, the 1-is-better concept helps one to do more with less resources and less efforts and finish the work faster.

So isn't the Narendra Modi government's single form (administrative process) to incorporate business a most welcome step. In fact more the use of such One-Is-Better! themes better it is.

The 'easing' thereby reduces a lot of Waste as a result of eliminating 3D: Dirty-Danger-Difficult activities. In fact it improves performance also. India ranked 142 among 189 economies by the World Bank in 2015 is expected to improve its position to 50th in two years if such 'Ease of Doing Business' continues.

So let's be innovative to find more and more One-Is-Better! opportunities to improve whatever, whenever and wherever we can.

Footnotes:
1: Examples from the book "Visual Management through Five-S A Japanese Tool Of Kaizen" Author: Shyam Talawadekar

Also read a few relevant blog-posts hereunder: Please do consider sharing this post or sharing your initiatives on above lines in comment box.

Make It Simpler, Rest Will Follow 
How To Make A Difference 
Big-Be Or Bug-Be ! 
Treat Root-causes, Not Symptoms ! 
Nauseous Communication Gaps 
Do You Cleanup-After-Crisis 
Raam or Krishna-Shyam: Tell me Hey Raam! 
Will It Work Here?  
Some Moron ! Some Great !!! 
That's How Morons Work 
You seem Reasonable if you appear Un-reasonable 
Smart-Moron Who Breaks Your Glass  
WOW Work-Culture: By Telling or Selling 
Suggestions On-Sale, None-To-Buy 
Can-changing-thoughts-change-a-nation
Ridiculous Poison-culture versus Maverick Kaizen-culture 
Tolerate Once, Twice, Thrice? 
That's how some business partnerships work 
Taken-For-Granted ? You Deserve It !! 
Technology in-place, security dis-placed
IQ-EQ-or-SQ: What-is-more-important?
Do you know a Best-Career-Plan 
Customer or Custo-Mer?  
Experienced A Delightful Payment ! 
An Experience of Heart-and-Soul 
Less With More And More Gets Sore 
Should one care for value?  
ABCD of India Shining
Beware Of Political-Presentations 
Do You Cleanup-After-Crisis 
Hoarders Of Filthy Hoardings

Prevention: The Best Cure! ... Is it really so?

Can cigarette butts start (bush) fires?

A study at the University of Technology Sydney (UTS) provided solid proof. The laboratory trials found cigarette butts ignited the hay in 33% of cases under combination of a certain conditions: wind speed, fuel moisture and the degree of contact between the fuel bed and combustion area of the cigarette. During the survey, 426 cigarette butts were collected in a 60 square meter area.

Now can you say which one of such abandoned butts might contribute to 33% that cause fires?

Can dangerous road conditions cause accident-deaths?

Washington Post (dataflurry.com Jul 22nd 2009) published an estimate that over 22,000 of the 42,000 people that die each year in USA from automobile accidents (i.e. over 50% deaths) occur because of dangerous road conditions such as potholes, fading lane-line-markings, missing road-signs, and debris that gathers on roadways, hazardous highways, narrow roads, etc. Rest deaths are caused by driving under the influence of alcohol, speeding excessively, and even neglecting wearing a seat-belt.

Now can you say which one of those narrow roads or potholes (see picture) is a potential death trap?

Worldwide an estimated 200 to 300 million malaria infections occur each year with 2 to 3 million deaths. A person gets malaria from the bite of an infected female mosquito.

Now can one guard oneself from an infected female mosquito?

One may find it difficult to find answers to such questions as: Which female mosquito is infected? and Which one of those will bite? and Which one of those bites might cause malaria?

In other words, it is difficult to know which one or more of the typical abnormalities in daily life might strike you in the form of a crisis or a disaster and when so. What is most likely is 1-in-every-300-abnormalities of similar nature might strike you sometime if one goes by the '1-30-300 Safety-Maintenance-Pyramid' of Kaizen¹. And when it strikes, it does bring with it corresponding intangible as well as colossal tangible losses or costs called as 'Costs-of-Quality' in Kaizen¹ parlance.

In that case isn't it wiser to take more-care every-time one is confronted with 'signals' of such abnormalities in 'seed' stage?

- It may be a municipality possibly doubly-caring to look for causes of cracks before they turn into cracks that then graduate into moon-ly-craters. Expecting municipality to be prompt for the benefit of tax-paying customer sounds difficult though!
- It may be a driver/rider doubly-caring not to speed-up in order to prevent getting trapped into a crater.

- It may be a police strictly dealing with a 'No-Entry' violator or a petty thief. 

- It may be a caring mother/warden cautioning (although at the cost of sounding irritating) her child/ward of 'signals' or to look right-n-left for vehicles before crossing roads.

- It may be a caring mother serving 'boiled-water' for drinking or
- It may be a caring father ensuring actions such as 'no-open-gutters' or spraying mosquito repellent in/around house.

Isn't it wiser to take care of (recognise) those who take care of 'seeds' as above.

Wise are those who do and those who know 'when' to overlook 'which' of the 300-abnormalities and 'how'?

Overlooking does not mean ignoring the abnormalities. 'How' part is supposed to address the means i.e. to know 'what' care should be taken with 'how much' risk while overlooking the chosen ones. Sometimes decisions are needed to be taken with calculated² risks if facts and figures are available in time. It's like  making decisions by 'wearing a helmet'. Sometimes it's with ³judgmental-helmet particularly in emergencies.

In absence of being wiser, an over-confident fellow must get ready to 'fall again-n-again' like Mr-Foolhardy and keep endlessly hoping to get 'cured' of the resultant crisis under someone else's 'paid-intensive-care': The 'Costs-of-Quality' for self as well as for her customer in case of a business-delivery.

That's the theme under exploratory care of this blog: Prevention-Is-The-Best-Cure! Or Care-Is-The-Best-Cure!

Keeping fingers crossed hoping that the mission proceeds in right direction!


Footnote-1, Kaizen is the continual  improvement philosophy (or science or culture) that provides ways-&-means to manage both the prevention of crises as well as quick relief from crises. The ways-&-means are composed of a judicious balance of both the intrinsic motivation (typical eastern-approach) as well as extrinsic motivation such as carrot-&-stick (typical western-approach) where needed.

Footnote-2, FMEA is a Kaizen-tool that gives a calculated number to the risks called as Risk-Priority-Number (RPN).  

 Footnote-3,  For analytical and judgmental tools to make a decision refer, book "World-Of-Kaizen: A Total Quality Culture For Survival" Authored by Shyam Talawadekar.