November 23, 2008

Cost of bad quality

Deming's 14 points of management seems to be designed to improve the quality of product or services in the modern industry, obvious enough. But I think it's worthwhile to relate his philosophies to the real world and think whether they will really work.

In the #4 point "End of the practice of awarding businesses on the basis of price tag alone", he writes "Price has no meaning without a measure if the quality being purchased. Without adequate measures of quality, business drifts to the lowest bidder, low quality and high cost being the inevitable result" Out of the crisis p32. As I read this, I am just thinking how crucial is quality in our purchasing decisions, and compare that to the cost of the product/service we are buying. I believe both are very important but very often we consider cost before quality.

Some cynics would simply says 'this is the way the world works, people go where they can get the best deals'. True, and many businesses have operated and suceeded based on this mentality. But  I suppose the point Deming is getting at is that too much has been placed on the price tag. And that we would go to supermarket to buy the cheapest milk, call our family on the cheapest network.What we often do no realise is the trouble we end up getting into. It may well be the milk we buy was not processed properly and we end up in hospital, or the network we use never connects and we are stuck in a 12 month contract. Either case our decisions have costed us much more than what we initially anticipated. A hard lesson learned?

Perhaps instead of blaming ourselves for being cheap or the sneaky vendors for their deceit, we can ask oursleves whether our behaviors have helped to bring about this consequence. In Deming's words " The price tag is still too easy to read, but an understanding of quality requires education" p33.  Is the customer to blame? Perhaps not, it is the businesses themselves who need to communicate product superiority and charge a fair tariff. Moreoever, we ourselves needs to be more educated to understand quality is not just something that businesses has to achieve, moreover it is something we have to support and believe.

- One comment Not publicly viewable

  1. Paul Roberts

    An interesting post Louis that makes clear that there is a difference between price and cost. To further support this line of thinking I offer a partial quote from social critic John Ruskin (1819-1900):

    ....”The common law of business balance prohibits paying a little and getting a lot – it can’t be done.”

    It would seem that some lessons take a long while to learn.

    26 Nov 2008, 15:57

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