The Economic Case for Quality

1. The Economic Case for Quality An ASQ and Section Initiative Kevin Gilson Ron Savoie

2. What is the ECQ Initiative? • ASQ Objectives: • Change the perception Executives have about the profitability of quality • Increase awareness of quality • Increase awareness of ASQ • Increase awareness of your local Section • Gather information about how ASQ can help the company implement or enhance their organizational management system using quality.

3. How did this come about? • Information from ASQ: • Declining number of quality professionals • Request from members for a method to inform company CEOs about the value of a quality management program • Pilot program (Target 1) in Milwaukee and Pittsburgh Sections with some successes • Target 2 program for CEO-to-CEO contact • Discussion about this being “Making the Case for Quality”

4. Economic Case for Qualityby Clay Hodges, ASQ Section Affairs Council chair, in Quality Progress May 2005 “Last year ASQ launched an initiative, the economic case for quality (ECQ), to demonstrate to executives that quality benefits the bottom line. ASQ volunteers have played an integral role in the initiative.”

5. Economic Case for Qualityby Clay Hodges, ASQ Section Affairs Council chair, in Quality Progress May 2005 “The best part is that section volunteers will get to play a part in making local executives aware of the economic case for quality. They will also be able to promote ASQ activities and introduce the language of quality to executives in an environment conducive to learning. This will eventually help all ASQ members explain the value they bring to their own organizations.”

6. What Do CEOs Think About Quality?by Greg Weiler, ASQ project leaderin Quality Progress May 2004

7. What Do CEOs Think About Quality?by Greg Weiler, ASQ project leaderin Quality Progress May 2004

8. What Do CEOs Think About Quality?by Greg Weiler, ASQ project leaderin Quality Progress May 2004

9. What Do CEOs Think About Quality?by Greg Weiler, ASQ project leaderin Quality Progress May 2004

10. Evolution of tonight’s program… • 502 Section Board established a strategic initiative in 2004 and renewed it in 2005 to support ECQ • ASQ program has mixed results: • About 25% of companies contacted granted interviews with CEO • No follow-up program to measure results • Labor intensive for a Section

11. So…we come to YOU! • Experiences show: • CEOs do not have the vocabulary to understand the different quality initiatives • Many firms in our region have a quality program because of regulatory or contractual requirements • Quality management programs improve corporate performance

12. We need YOUR ideas… This tutorial is about getting them to help establish our ECQ program.

13. Let’s start with information about your company: • What size is your company? • Estimate your company’s earnings? • At what managerial level and who should we approach in your organization to discuss the ECQ? • What would you think is the most significant quality issue in your company?

14. CEO questions… • What does your firm’s CEO need to know to be able to make decisions about your company’s quality management system? • How can we gain his/her interest to present this information to the CEO? • How do you think your CEO views quality and your quality program?

15. CEO questions…Your Answers • What does your firm’s CEO need to know to be able to make decisions about your company’s quality management system? • Realistic approach, timelines and resources to develop a Quality Management System • Everything -- we are a product assurance services company • How can we gain his/her interest to present this information to the CEO? • Through me -- the Quality Manager • He is already interested

16. CEO questions…Your Answers • How do you think your CEO views quality and your quality program? • Thinks it can happen (be created) overnight • Very highly positive

17. Your Brainstormed Topic Ideas • Use the ideas of Phil Crosby: • Price of conformance • Price of nonconformance • Accounting Department must be interested • Sell MBA students on quality • Wall St. is the Enemy • Quality is anything measured by external people or auditors

18. Your Brainstormed Topic Ideas • Quality support is 3 or 4 levels down • Business section managers • Quality savvy employees • Originate with Quality personnel and move upwards in a company • Approach from the “sales” perspective • No sales take place with out the need for quality

19. Your Brainstormed Topic Ideas • Customer will not pay extra for quality to happen • Present business cases to the ASQ Section members at Section meetings • Utilize the Maryland Manufacturing Consortium (DBED) • Continue this discussion with Section members at future Section meetings

20. Thank you for your information! • As we craft our approach, we will keep you involved and will need your help as we make a case for quality. • Thanks for your ideas!

21. Your Ideas Gathered at the Meeting November 5, 2005 ASQ Baltimore Section Meeting

22. Let’s start with information about your company: • What size is your company? • 50 to 3,500 employees represented in attendance • Estimate your company’s earnings? • $1M to $850M per year • At what managerial level and who should we approach in your organization to discuss the ECQ? • Program Manager (smallest company) • Executive Team (middle size company) • Vice President Business Opportunities (largest co.)

23. Let’s start with information about your company (cont’d): • What would you think is the most significant quality issue in your company? • Influencing prevention of defects • Establishing a Quality System • Process/standardization/factual approach/measurement • Showing how Quality contributes to product quality (not just to the bottom line)