One of the first things I learned about quality management was that quality, cost and schedule were interrelated. My earliest mentors used the example of a 3-legged wooden stool to explain that, if any leg were shorter or longer than the other two, the stool would fall over.
If too much emphasis was placed upon on-time delivery, the business would sacrifice quality and lose money to expedite replacements for poor-quality product.
If too much emphasis was placed upon cost, cutting corners would lead to poor quality. This would cause missed delivery dates due to time needed for sorting, reworking, repairing, or replacing poor-quality product.
If too much emphasis was placed upon quality, the higher costs for materials might lead to lost profit or people might be so strict about making sure the product met every specification that product would be unable to ship on-time.
There are sophisticated models that talk about the cost of (poor) quality, like the Taguchi Loss Function1, and balance it against other key factors for society, for businesses and for customers. The American Society for Quality (ASQ) is a rich resource for Cost of Quality (COQ) information.2
As the years have passed, there have been arguments about other, equally important, factors to consider for business success. Each of these other factors are also interrelated and must be balanced against one another by business leaders. These have included safety, employee satisfaction, regulatory compliance, project scope, community support and environmental considerations. Factors surrounding the model were also added, like environments of managed risk and competitive environments.
When I step back and look at it all today, everything is really a quality. I do not mean everything looks like a nail because I happen to have a hammer. I mean that everything is made up of qualities and is a quality of something else… like atomic particles. So, for cost, not making a profit is a poor quality for a business, while staying within a budget is a high quality. For schedule, making it to market with a new product before a competitor is a high quality, while failing to ship product in time to meet a customer need is a poor quality. Cost and schedule are qualities.
So… what needs to be balanced? All of it, but what is balanced for one business may not be for another. Each business needs to define its own factors for success and understand the qualities for each of those factors, including those for cost and schedule.
Want more information about or help with optimizing quality-based cost and schedule performance for your organization? EMMA International can help! Contact us via our website, by phone at 248-987-4497, or by sending an email to: firstname.lastname@example.org.
1”Taguchi Loss Function”, from Wikipedia® Creative Commons, Attribution – ShareAlike License 3.0, last edited 10/05/2020, accessed 10/16/2022 via: https://en.wikipedia.org/wiki/Taguchi_loss_function
2”Quality Resources / Cost of Quality”, adapted from The ASQ Quality Improvement Pocket Guide: Basic History, Concepts, Tools, and Relationships, ASQ Quality Press, ©2022 American Society for Quality, accessed 10/16/2022 via: https://asq.org/quality-resources/cost-of-quality