It is important to understand that the fundamental principle unpinning businesses is to make profit – NOT to provide quality products/services. Quality however, may be a requirement, as it is in aviation, or it may be a company’s strategy in finding a unique and valuable market position which then generates market share and profit, or it can save costs and increase gross profits independently of gross revenue. However, quality comes at a cost, the cost of implementing quality. These costs can include giving training, performing both internal and external audits, upgrading and calibrating equipment and paying for new specialised staff such as Quality Managers. However, as investment into quality increases, the savings/benefits decrease. For this reason, companies need to monitor and understand their cost of quality, to understand the costs of quality against the benefits generated by increased quality, whether this is through savings or broader corporate strategy. This is the approach of a Prevention, Failure and Appraisal Programme. However, it is worth noting that this approach is not suitable in all industries (such as aviation where safety is more important than costs)…and always taken in Japan, where zero defects are generally aimed for – and clearly businesses can still be profitable – adopted by organisations including General Electric, Rolls-Royce Limited, and the United States Army during its heyday (Harwood, 1993).
Additionally, not all quality changes are created equally. For example upgrade of equipment, training, testing and staff cost can account for significant costs. However, implementing tools such as Seiri (Sort) and Seiton (Straighten) which simply involve organising and keeping a clean work space costs little to nothing. Collecting and analysing this data can help managers make better informed, and hence, more effective decisions – and perhaps an