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.
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.
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:
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.
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:
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.