posted 03 July 2001 11:29 AM               

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

posted 03 July 2001 06:14 PM               

Have the entire Quality Department call in sick for a week and see what happans!

posted 03 July 2001 08:18 PM               

- 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!

posted 04 July 2001 08:48 AM               

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

posted 09 July 2001 10:28 AM               

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!

posted 10 July 2001 01:06 AM               

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.

posted 10 July 2001 01:48 PM               

quote:

---

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!

posted 10 July 2001 04:49 PM               

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.

posted 10 July 2001 05:43 PM               

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

posted 10 July 2001 09:58 PM               

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?

posted 10 July 2001 11:13 PM               

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."

posted 10 July 2001 11:40 PM               

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

posted 11 July 2001 08:44 AM            

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.

posted 11 July 2001 10:28 AM               

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.

posted 11 July 2001 11:16 AM               

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?

posted 11 July 2001 11:24 AM               

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,

posted 16 July 2001 12:16 PM               

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.