By Duncan Troup on Wednesday, August 16th, 2017 in Customer-centric Thinking, Lean and Agile, Product Design, Service Performance.
At Tingle Tree a key reference point is the economic cost of conformance model. Professor James Martin describes this as…
“…the economic conformance level (ECL) is obtained where prevention and appraisal costs are equal to external and internal failure costs. Prevention and appraisal costs increase as the level of conformance quality increases.”
In a recent engagement we assisted a well known rural university on assessing its delivery model and the resultant levels of quality. They perceived that the cost of defects injected was high and wanted it reduced. Following our assessment we were able to show that whilst there defects were not best in class, the ran a lean cost of prevention model and as such had very high velocity and fast feedback. A conventional consulting company may have on sold large consulting engagements to improve quality…but not Tingle Tree. We wanted to engage in a holistic discussion uncovering what they might lose if there was a laser sharp focus on the cost of defects. We felt that by doing this they may lose their agility and speed to market. Not to mention cost of projects.
In summary, while they perceived they were failing – holistically they were good value. That’s not to say we did nothing. There were areas to improve in Problem Management, Change Management, Quality Assurance (as opposed to inspection). But we gave them credit for their successes as well and did not want to kill “the goose that laid the golden egg”
So next time you look at quality, it will pay to use the cost of conformance model to take a big picture view. Otherwise you risk succeeding on the quality managers KPIs but killing the delivery machine as a whole!!