The Risk and Cost of Doing Nothing About Quality

You don’t have to be an economics expert to know that doing nothing is not really a cohesive business strategy. In many ways, it is a going-out-of-business strategy of which companies should be extremely wary. A low-quality product will always come with a price. Mistakes happen, but quality should not be compromised as a result of actions that involve a company not doing jobs right the first time. Almost impossible to calculate, but there is a consensus that the real cost is less related to inactivity and more in line with a company’s failure to control or maintain quality in the first place. It goes without saying that the act of literally doing nothing is unlikely to be part of a company-wide quality strategy. 

Every organization will do something related to quality management, even if that is maintaining the status quo of using paper and manual-based processes. The caveat is that the status quo is not enough in the modern business world. Companies that don’t invest in quality management are taking a huge risk, a decision that may usher in some or all of the following outcomes: 

An additional cost if a company falls short in managing quality in a comprehensive way is a loss of potential gains. Choosing to “save the expense” of investing in quality will be foregoing the potential cost efficiencies and expense-reducing revenue gains that can be achieved through tighter quality management and process control.

More often than not, the cost of quality (COQ) is aligned with the cost of poor quality (COPQ). And although these two concepts might seem to be similar, COPQ relates more to the actual costs of delivering poor quality products to an end-user or consumer. 

According to the knowledge-based quality community, American Society for Quality (ASQ), COPQ can be separated into four distinct categories — prevention costs, appraisal costs, internal failure costs, and external failure costs.

Manufacturing companies that integrate both COQ and COPQ into their quality management processes are more likely to understand the long-term effect of doing nothing. The key is to accept that organizations will pay for poor quality. 

The perception that a company is doing nothing to solve an identified quality problem is more often than not driven by a combination of consumer concerns, regulatory oversight or mandated inspection processes, and ultimately, the threat of legal action – all of which lead to a damaged brand and reduced corporate value. 

Excellence or continuous improvement can be hard to achieve (or sustain) for companies, even more so when you consider the demands of modern society. Conversely, doing nothing creates a culture of mediocrity that struggles to react when something goes wrong. 

The cost of doing nothing is, as we have said, often an incalculable amount. Doing nothing is not a business strategy, mainly because another company in the same space is likely doing something – innovating, changing, disrupting, expanding, enhancing the customer experience. Companies that do nothing are missing the opportunities to grow, to improve operations, to be more effective and efficient, and to gain more market share. 

What is the best way to solve the problem? And if the cost of doing nothing is having an adverse effect on a company and, importantly, its product quality, then how can this scenario be alleviated? The simple answer to these questions is quality management software.