Continuing the financial impact of quality discussion, the third theme in The 2016 ASQ Global State of Quality 2 Research — Discoveries 2016 report “Setbacks: Controlled or Not” raises that the financial impact of quality must also include the financial and non-financial impacts of setbacks.
While the goal of quality is to eliminate setbacks, organizations must identify and resolve quality issues at their earliest opportunity to lessen the impact.
As mentioned previously, 100 percent of world-class organizations and more than half of non-world-class organizations saw an increase in their total investment in quality. These investments could be in areas such as technology, training, equipment, and personnel.
Of that same group, 56 percent reported that they “don’t know” or “don’t measure” the financial impact on the bottom line, which specifically ties back to the second theme of “Business Performance Impact.” In addition, close to half of respondents reported they didn’t know how much they were spending on remediating quality-related setbacks.
Further to this point, world-class organizations reported half the rate of quality setbacks as non-world-class organizations. However, all organizations reported experiencing some quality-related setbacks, with more than 40 percent indicating that most of their setbacks were related to product defects, or a poor understanding of quality.
When examining the impact of these setbacks, the leading effects were financial (42 percent), delay of a product launch (29 percent), and loss of competitive advantage (28 percent). In particular, the delay of a product launch or lost competitive advantage can have a considerable impact on how customers view an organization and could potentially lead to the organization losing the customer.
For more than 35 percent of organizations, setbacks resulted in service delays, overall inaccuracies, poor data quality, and supplier-related setbacks.
Forty-five percent of non-world-class organizations and 25 percent of world-class organizations agreed that they have a poor understanding of quality management and implications as a setback.
Continue to read The Auditor Online in the coming weeks for more findings from the ASQ Global State of Quality 2 Research — Discoveries 2016 report.