Pace: Reliability Improvement

In just over 50 years the idea of broadcasting using satellites has moved from science-fiction to reality. One of the success stories in this industry is Pace, the electronics company which has used its advanced satellite reception technology to reach global number one in the development of TV set-top boxes.

The Pace Senior Management Team recognised their aspirations to take Pace to a higher level of ‘On-Margin, On-Time, On-Quality’ performance and needed to improve performance and in particular understand where costs were being incurred due to poor quality.

There had been a number of evolutions of quality and the quality function at Pace but the Senior Management wanted to refresh the approach in this business critical activity to create a truly prevention oriented quality culture across the business, whilst maintaining the progress already established.

Following the publication of the quality strategy document, there was a need to ensure clarity regarding the ‘total quality journey’ and particularly to identify the causes of poor quality, and what this was costing the business, so that everyone in Pace understood how these causes could be better controlled and removed to deliver a higher level of business performance.

Assignment

Pace and Oakland worked in partnership on a phased 9 month program, working closely with an internal cross functional team to design and implement a dashboard of the current costs of quality (CoQ) within Pace and use this data to identify key areas for improvement that could deliver significant and verifiable savings.

Approach

  • Phase 0: Creation of an initial understanding of the financial management systems.
  • Phase 1: Insight – gathering feedback from executives and senior management to help understand the potential causes and costs of poor quality in Pace and align the executive management around renewed targets for quality performance across the business;
  • Phase 2: Planning, mobilisation and communication for full deployment of a  new quality strategy supported by a cost of quality dashboard (Pace Business Excellence – BE on-margin, on-quality, on-time);
  • Phase 3: Pilot implementation, finalisation and global roll out.

The Prevention, Appraisal and Failure (PAF) model for the CoQ was selected as the overarching framework for the respective metrics. This model is often time consuming to set up and complex to implement.  However, an innovative approach to the collection and analysis of CoQ information enabled the team to rapidly extract meaningful data from the current financial control systems. Grouping of similar products into families further streamlined the data collection and analysis process.

To achieve quality across the entire business process chain it was recognized that the Pace management needed to:

  • assess the customer needs and business value of meeting them
  • establish the right processes and partners
  • prove and implement the right solutions
  • make the proven solutions sustainable
  • spread internal and external best practices

Pace and Oakland were uniquely able to develop and implement this solution and the input from Oakland was timely in relation to ongoing business challenges – support was provided for the second generation of improvement. The approach used ensured quality has a ‘seat at the executive table’ without being seen as a panacea.

Achievements

The CoQ dashboard now ensures the true costs of delivering “on quality” products which consistently meet the expectations of customers and end users are understood across the business.  Robust business cases for improvement can now be built using objective and verified financial data to prioritise resources and clearly demonstrate the realisation of cash benefits.

The project has successfully delivered:

  • A sustainable approach to improvement prioritization and project selection;
  • A greater visibility of the calculation of quality performance against targets and better understanding of internal terminology;
  • Senior management support and sponsorship for improvement projects;
  • Clarity and consistency in data comparisons
  • Significant improvement in financial performance due to the removal of the causes of poor quality.

Understanding the true CoQ can drive major cash benefits across any organisation, helping to quickly identify the root causes of problems and prioritize improvement activities to deliver major financial return.