The latest 'corporate speak' in my Company is "how does QA add value to projects". Well - I think we do a fair job doing all the fairly traditional QA things: eg: audit for compliance, look for opportunities for improvement, resolve 'quality problems' etc..
None of these add value per se, but probably reduce costs - by improving efficiency (better processes), and cost overruns.
I'd like to be more 'up front' with my management to convince them that QA is truly adding value. All ideas/suggestions welcome.
(I'm the Quality Manager of a UK defence electronics Company, mainly software/systems devlopment).

Paul

Paul,

This is not a very professional reply. There are smarter people out here than me that can probably tell you in quantitative terms what Quality adds in value. In your line of work, as shown in your post, there would be no value at all to look at without a good Quality management System in place. Your customers, and they are probably defense contractors, would not even look at your company without a Quality program.

"I'd like to be more 'up front' with my management to convince them that QA is truly adding value. All ideas/suggestions welcome."

Nicely, I would suggest that without your quality system, being what it is, there would be no opportunity to question the value of Quality, because there would be no jobs. How's that for added value?
What do lengthy discussions about the value of the Quality System add in value?
I've been in this quality business my whole life, 35+ years, and have always been looked at as being overhead with no added value to the bottom line. This usually happens when there is a slow down in orders and people haven't a lot of work to do. They start to look at things, hoping that they can eliminate those things they don't understand because they surely can't have any value. I always reminded them that without a good Quality Program in place, the Customer goes elsewhere,unless you have a one of a kind product (niche) in the market place. I love it when the Customer arrives for his audit of the non value added Quality System and everyone scatters, but the "overhead, non-value added" guy. You and other like us. Hang in there. I wouldn't lose any sleep over it. It's a "cyclic" thing.

energy

[This message has been edited by energy (edited 03 July 2001).]

My thought is, how do they define ‘value’? If they follow traditional norms, Value=Quality/Price (cost). If these things you list are driving down costs (do you have quantifiable evidence?), then you should be able to show simple comparisons of before, after, and for future data.

But how can you know the cost of a lost customer as energy points out? Sometimes, we must accept things on faith, for instance, we do training without ever really being able to quantify it. Ask any corporate tie if they think training or education is value added. I believe that they will agree on faith. If they say faith has nothing to do with it, ask them for their evidence. My guess: they’ll give you a silly grin.

From the lean Mfg stand point, quality i.e., inspection (from sources outside the process) adds value to the product when and only when it is a customer requirement. QS9000 is a customer requirement therefore it adds value. jmho

How about measuring performance over time for critical features of the business like (for starters):

- delivery vs (a) original promised date (b) last negotiated date

- cost vs (a) original budget (b) last budget (due to scope change during the project - typical in Defence environs)

- Customer complaints (I personally think this is FAR TOO WEAK an item to give meaningful measures of caustomer satisfaction, but I included it because it's easy)

- customer survey results. (Every job is handed over with a survey form. In a partnering relationship you'd have forms to assess eachothers performance) (I'll e-mail some I set-up at a defence facility in Oz.

These types of business system features should give you a clear picture of the benefit of quality systems (hopefully).

If you want "cost of quality" data, you're probably a bit too far down the track, but, it's never to late to set it up. Then you can measure the value of continuous improvement activities!

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PAUL,
You're not registered!
I don't know your e-mail address.
Silly me.
Silly you!

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Hello Paul

I sometimes pop up on the site to stir things up a but, and i think i might do the same again.

I beleive your management is absolutely on the right track, and i cannot blame them for doing their job and questioning the value of the dept. I personally beleive that the goal of every company should be to eliminate their QA dept, and i would do this slowly and surely by for example creating a Supplier Development Manager based in Purchasing to develop suppliers, or create a group of Internal Consultants to train and assist employees to improve their processes.

You might argue that this is QA by another means. Maybe, but it might be easier to justify your value-add in this context.

Lastly if you want to stick to your traditional concept of QA i would create stats, measurements and more stats wherever i can, ie Customer Satisfaction rates, Process Improvements etc, and attempt a stab at the cost saving of these improvements.

Management like facts, espcially when they are related to costs.

Regards


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Andy B

As a QA Manager I have to agree that good system does not need QA department. If everybody are doing the right things, so we dont have QA at all. However most companies are still so far from that.

Regards,

So, what have we learned in the past 60 years? Do we want to start over? (Real Quality Control/Inspection began during WW2.)

Just this:

Company owners cannot and will not expend the resources to train their workforce to become “Quality” conscious. That’s why Quality groups were created in the first place. People who have skills in other areas such as Finance, Business Administration, Machining, Electronics, etc., have their hands full doing what they have been trained to do. Company owners would like to “Double up” on their employee’s responsibilities because they think it’s easy and, of course, profitable. It’s a pipe dream to think people will “police” themselves and adhere to policies without real accountability.

Most Company owners, and their bean counters, want a bigger bang for their buck and will not tolerate employees moving cautiously about to insure that policies are being followed. We have seen first hand Management’s wrath when a process or shipment is stopped or slowed because a “Quality” person attempted to exercise diligence to his/her area of expertise. I recently observed a company “owner” rant and rave at his employees because of a third rejection (same parts-gears) from a big customer. He decided he would forego formal Quality Control ($$$) and rely on his talented work force. They, to the man, said that it was because the owner pushed and pushed and did not give them ample time to inspect their own work. Nor did he give a damn about established policies. After all, the cops were gone, along with his headaches. (He thought.)

That’s usually what happens to anybody who attempts to abolish traditional Quality Controls. I have obtained good positions during my career because companies were in trouble with their customers and needed a Quality system to get back in the good graces. They had figured there was no value added and eliminated their QA/QC work force. Why? They can, for a while, that is.

Does anybody out there think that you can just make employees think about Quality Control/Assurance the same way a professional does? Once the training sessions are over, everybody goes back to what they were doing. If it were that easy, everybody would be doing it. What happens when audits reveal policies are not being followed? Do you fire/counsel your Shop Foreman, an excellent worker, or maybe an Engineer? Do you blame everybody, but yourself? What about worker morale? After all, you won’t have a QA Mgr. or an Inspector to vent at. There’s a good value added issue to contend with. Employee Morale. Somehow, that’s not as important as figuring out how you can eliminate a Department that does add to the bottom line, even if you can’t measure it.

You can dream about a world without dedicated Quality Professionals.

You can fantasize about making all your employees Quality conscious.

You can continue to question the dollars spent on Quality Control and the value added issue.

As a company owner, you can imagine all you want. But, the money spent on a good Quality Control Department and the resultant gain in Customer Satisfaction is immeasurable. Until something better comes along, and it won’t be in my lifetime, worry about improving your processes and maintaining a skilled workforce that allows you to rely less on traditional Quality Control. Because like it or not, you’re stuck with it!

-> Real Quality Control/Inspection began during WW2

Depends upon how you define 'Real'. As far back as the Egyptians there are pictographs of *may* be inspection. One is in the building of 'something' - who knows what - but there are 2 fellas - one working and one measuring.

Marc,
I stand dejected, rejected and corrected. I was referring to all the problems with munitions, war materials, etc..There was always some kind of cross check. Even if it was the boss. It began to be "formalized" during that time, so I've read. This topic is just so familiar, even after all those years in the business. Just as an aside: A company owner, who had dissolved any semblance of a Quality system, asked me to write him a Quality Manual to satisfy a potential customer. Because of close personal ties, I gave him a generic one that he just inserted his Company name in all the right places and he was awarded a contract. This guy, to this day, sees no value added by having a "Quality Program". They just don't get it and neither do I. Enough. Thank you for the history lesson, though.

energy

The point whether QA adds avalue to the organisation or not depends on the management perception. One has to give broader functions to QA department to achieve the objectives of the QA department. I was working in Nigeria for three years. The MD gave the responsibility to QA department in such a way that it includes not only technical related matters will be under the purview of QA, even finance,accounts, administration and human resources were put under the QA audits. Whenever audit takes place people used to show utmost sincerity and the report will be sent to the management.

Hence QA adds value or not depends entirely on the management and their decision is final
The management must entrust QA with wider responsibilites and then only value addition is there or not has to be decided.

Found this posted somewhere:

The Five Steps to Increase Profitability and Competitiveness

Step 1: Strategic Quality and Process Planning
Achieve greater success by understanding and managing the critical success factors
· Link the improvement vision, goals and objectives to business success
· Understand how improved quality and process performance increases financial performance and competitiveness
· Identify opportunities, threats, strengths and weaknesses
· Develop an effective improvement strategy
· Establish coordinated system of business and improvement performance measurements
Step 2: Cost of Poor Quality Assessment
Identify and quantify the cost of non value-added activities and waste caused by poor quality and inadequate business processes
· Cost of poor quality as a performance measure and cultural change agent
· Add a financial dimension to the quality and process improvement process
· Determine the dollar value of effective quality and process improvement
Step 3: Cost Driver Analysis
Determine the short-term, high payback opportunities to increase profits, reduce costs and improve customer satisfaction
· Identify the root causes of poor quality costs
· Determine the financial impact of the root causes of poor quality
· Conduct cost benefit analysis to identify the vital few projects
Step 4: Project Selection and Planning
Select the vital few quality and process improvement projects and develop a project plan to increase success through proper resource allocation and commitment
· Sequence projects to increase customer satisfaction, profitability and competitiveness
· Eliminate problems that cross functional boundaries
· Set realistic expectations and resource requirements
· Deploy the teams
Step 5: Monitor and Measure Progress
Ensure the right steps are taken to eliminate the root causes of poor quality and track the resulting improvements in profitability and competitiveness
· Accelerate quality and process improvement through accurate and timely reporting
· Report financial and non-financial achievements to top management
· Assess progress
· Determine the payback from quality and process improvement

-> I stand dejected, rejected and corrected.

Ok, Arlo! You know me - I had to 'get technical'....

I think that before we can determine whether or not quality adds value, we need to know what is the true definition of "adding value".
Let me start by giving my opinion.
1- You accept an order to make a part.
No value added
2- you release the work order to production.
no value added
3- you cut the raw material to length.
value added
4- you drill holes.
value added
5- the inspector inspects
no value added
6- the auditor audits
no value added
7- and so on and on . .

Again JMHO, Can we come with some other definitions of "Value Added"

Originally posted by Sam:
I think that before we can determine whether or not quality adds value, we need to know what is the true definition of "adding value".
Let me start by giving my opinion.
1- You accept an order to make a part.
No value added...Value to you is the Customer recognized your fine product, by price, QUALITY, delivery.
2- you release the work order to production.
no value added...unless you make an error. Then any value is lost.
3- you cut the raw material to length.
value added. Same as 2.
4- you drill holes.
value added. Same as 2.
5- the inspector inspects
no value added..unless he detects a mistake before it goes out the door to the customer
6- the auditor audits
no value added...in line with your posts
7- and so on and on . . Everything that occurs after so on and on, shipping, billing, customer acceptance, product functions as it should, are not value added, as you put it, unless something goes awry. The "value", to me, is then in the minus column. Reputation...adds value!

Again JMHO, Can we come with some other definitions of "Value Added"

MY Thesaurus:
value=importance(tangibles), worth, significance,usefullness, use, consequence, meaning, merit, help

Also, value=$$$ worth, price, cost, charge, rate, assessment

Which one are you using?

Great discussion, Sam!

Simplest terms:
Value added - What a CUSTOMER will PAY you to do!

I agree with Sam. Value added is any activity that increases the market form or function of the product or service. Nonvalue added is any activity that does not add market form or function or is not neccessary. We have been working with one of the Ford Lean Teams in our plant. Generally speaking their school of thought is that activities that change the product (saw, drill, weld, paint, assemble) are value added. All other activities (inspection, material handling, auditing, record keeping) no matter how neccessary or required are nonvalue added. The object is to reduce, eliminate, simplify or integrate these nonvalue added activities. To answer to original question that started this thread: QA is a nonvalue added activity.

Jim

Are we after Quality or are we after Value?

Value is a component determination (components in a System such as the Customer, the organization, the environment, the community, the supplier, etc.). It is something of worth. It might be money, a feeling, or a feature on a product. A product or service can possess quality, features, or both and have value.

So how does QA create either in a System?

Maybe this train of thought:

Make quality Assurance a profit center!

Get you lab certified and perform outside calibrations.

Take in outside work from smaller companies that need inspections performed where they don't have the equipment.

Offer sorting services to other companies.

Perform APQP/PPAP activities for outside companies.

Just some idle thoughts

ASD...

Lost, one plot.
Please return to this thread.

Sorry to throw this in, never can help myself.
You may recall the original context of the adding value question???

Take Sam's list of actual value-added items. Can we measure these over time and demonstrate that "quality improvements" (whatever that means) improved results, thus quantifying that quality added value?

So, is auditing a value added thing - no, not when assessed in isolation. But, an organisation is a whole, and the question is did auditing add value to the whole.

REMEMBER - if a process doesn't add value then you shouldn't be doing it.

If you've got a quality manager,coordinator or department that doesn't add value to your organisation, get rid of them/it and find a real one that benefits (adds value) the whole organisation.

If you guys don't think you're adding value, how can you contemplate measuring it?

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Sometimes the value is in the costs that never happen because the Quality department is there. This can start with things that have been discussed here, such as the various costs of nonconformance. But sometimes there are other costs that are avoided -- costs to society.

For instance, I once worked at a Naval Shipyard where, among other things, we overhauled and refueled nuclear-powered ships and submarines. Once I had the misfortune to be involved in an "Activity Based Costing" study done by an internationally known accounting and consulting house. One result of the study was that the entire Quality operation - and particularly the Nuclear QC part of it - was a non-value-added, non-mandatory cost and could be eliminated.
... pause for you to reflect on that ...
How would that conclusion go over in your home city? Or with the folks who go down into the sea in submarines? I certainly would not want to be anywhere within 100 miles ... or on board the ships.

Needless to say, that was one of the major reasons the study was ditched. "Your tax dollars at work."

Al,

Please continue on your train of thought. Doing calibration for your suppliers for break-even might produce gains elsewhere in the System, especially the Organization with improved quality, reliability, and delivery of parts. There are other gains such as increased rapport and loyalty which can not be measured, but surely appreciated.

Here is something more from Sam's post above to consider.

1- You accept an order to make a part.
No value added

Does accepting an order generate value that your supplier needs? How about staffing to make the part? Does this add value to the community by creating a work opportunity (gainful employmenty keeping people off of assistance)?

This is an interesting thread. The many contributors here have created good discussion!

Back to the group....

Regards,

Kevin

Interesting stuff here. I've been away for a while and catching up. The value added topic is very interesting to me because we are nearing the end of our start-up and beginning to focus on improvements. One of those being that we will consider "value added" as a portion of all quality planning done in conjunction with improvement projects.

I do have a couple of comments about the value added (or not) activities as outlined earlier:
5- the inspector inspects
no value added
6- the auditor audits
no value added

There are industries out there that charge over and above std. terms for inspection, therefore inspection can definitely be value added.

Auditor auditing in and of itself may not be value added, but from my experience at the previous division I worked for, once we were certified to ISO, we definitely got bigger orders from a select group of customers. When we went QS we not only increased orders from current customers, we gained several big accounts that would never have looked at us if we weren't certified.

So I guess in my opinion, I'd have to say that auditors auditing can be value added.

Keep up the good work!

Sorry, This topic is dear to my heart and livelihood.

A good functioning Quality Department gives the appearance that all's well in the operation of a company. The controls are in place and the Inspectors and QA/QC Mgrs have the headaches. This works so well that it looks like it's easy to replace with something else. I say "Go for it!" You know the old saying-one step forward and three steps backward.

energy

Just to muddy the waters a bit...

There are actually three divisons; customer value added activities, business value added activities, and non-value added activities. Customer value added activities are those activities that a customer would be willing to pay for because it increases the value of the product or service contracted for. Business value added activities are those that the business needs to perform to conduct its business and a customer would pay for. Non-value added activities are those that remain. The obvious question then becomes, what is a business value added activity?

An example of a business value added activity is processing payroll. Processing payroll adds no value to the product or service, however a reasonable customer would be willing to pay for that activity as they realize employees must be paid if they are to do productive work. Calibration of equipment is another example of a business value added activity. And that leads to the question of QA. Is QA a business value added activity? IMHO inspection is not value added, quality assurance activities for the most part are value added. Other thoughts?

Rick

Rick,

I think that you are wrong. Your comments clarify the picture rather than muddy it as you suggest.

The three areas you proposed can easily be related (and in fact, are) to the Components of a System as I stated earlier. Although your view is narrowed to a few relationships (many only view the linear relationship proposed in ISO9000 and consider this the System), your general comments point to Systems Thinking.

I would encourage the group following this thread to explore the Components in a System and think about what they Value or find of worth. Sadly, we are generally narrow in our view as we become further conditioned by prevailing paradigms in management and culture. The old cliche of 'thinking out of the box' isn't really all that cliche-ish.

What do you think? What is the value stream?

Regards,

Kevin

Many thanks to all who have responded to my original post. It has helped a lot (at least, made me feel less alone!).

I'm about to survey my 'customers', the project and engineering managers on both what they think QA should do (or shouldn't) and what are current performance is. If anyone has a similar survey/questionnaire available, I'd be glad of a copy.

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