ASQ - Statistics Division

Statistics, Quality, and the Bottom Line – 1988 Youden Address

Abstract: The U.S. industry needs to implement fundamental changes to compete in today's global markets. Implementation of these changes will require the investment of time, effort, and resources. The goal is to maximize the return on investment (ROI) of quality activities where ROI = value of the problem to be solved/unit of time X probability problem is solved X probability solution is implemented X length of time gain is held. Recommendations are given for maximizing each part of the model. Then we must focus on maximizing the total return = average return X number of applications. Many examples of successful implementations are given from various industries by translating the value of the work to dollars we have a way to evaluate its impact on the bottom line. Statistics and quality play a crucial role in these activities and thus make a real difference to the bottom line.

Keywords: Managerial systems

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