Getting your arms around quality cost
Informal benchmarking happens all the time in your everyday choices. If you are looking for a dentist, for example, you might ask friends what they like or dislike about theirs. We search for potential dining venues on Yelp and let the number of stars received from patrons influence our dining decisions. And you might choose your children’s new school based on its performance against a set of academic criteria assembled from various schools.
Formal benchmarking takes this kind of research to the next level, and this month’s cover story, "Home Improvement," explains the outcomes of a project the authors undertook to benchmark the processes and practices of a group of home builders. Their approach logically examined some of the biggest influences on efficiency and profitability, allowing the home builders to improve on their operations after having their eyes opened to where improvements were needed.
The impetus for the project was to reduce the cost of quality, which can be high in the construction industry, accounting for up to 15% of construction costs. Anything the builders could do to hammer away at that number can drastically improve profitability.
Data collection on your particular industry, as well as developing metrics that allow you to compare to others, is a good start in applying these learnings to your own situation.
"Buying Into Quality," seeks to help readers improve their purchasing processes by providing a slate of tools to streamline processes and uncover non value-added steps. If you consider that personnel and overhead account for more than 80% of purchasing-process costs, it’s clear that quality tools can be a natural way to achieve savings.
"Measuring Maturity," outlines a proposed standard to measure process maturity, allowing practitioners to be on the leading edge of measurement. The author worked with the ASQ Government Division, which has adopted this as a professional standard for government quality practices.
The author writes: "Through its systematic use, the tool can provide a process maturity score from zero to 15 to every supervisor and manager in that organization and make the extent of quality implementation a known performance attribute."
Finally, "Handling Handoffs," details how one New Mexico hospital used flow charts and voice of the customer, fine-tuned communications practices and instituted team huddles, consequently making the patient hand-off process safer for patients and simpler for staff.