Quality is an everyday conversation on the manufacturing floor. Performance measures such as first-pass yield, reject rates, and scrap and rework are displayed on white boards at cells and assembly lines, ruthlessly analyzed and targeted for improvement. Quality tools abound.
However, less embedded in manufacturing and other organizations -- or at least less well documented -- is rigorous, enterprisewide quality measurement that drives improvement across the entire organization.
"Quality leaders continue to have numerous questions about the best way to structure an enterprise quality function, as well as the best methods to influence the culture so work aligns with organizational goals," writes Travis Colton, an APQC project manager.
APQC, a nonprofit membership organization specializing in process improvement and benchmarking, has sought to fill the dearth of information. Earlier this year the organization, with the support of the American Society of Quality, released a research-based report, "Using Enterprise Quality Measurement to Drive Business Value," outlining what it described as eight "imperatives" for an enterprise quality function.
The eight imperatives, described by APQC as stepping stones in the emerging enterprise quality discipline, are:
- Align enterprise quality with strategic goals and initiatives. APQC presents Caterpillar Inc. (IW 500/27) as an example. The manufacturer has an overarching enterprise quality management process that governs its three organizational systems: product development, manufacturing and marketing.
- Establish structures and resources to get the desired results. Most study participants had an owner of the enterprise quality function. Typically that owner reported to an executive who reported to the CEO.
- Create supporting policies, procedures and tools. Don't mandate the details.
- Select, define and standardize quality measures across the enterprise. APQC suggests a typical measurement framework should have no more than five key performance indicators and five supporting indicators. Study participants had a median of 10. Additionally, standardized measures do not entail the exact same measures across business units or functions. For example, "waste" may be identified as a standard, but the specific measure could vary.
- Allow business-unit leaders to establish the performance targets for enterprise quality measures. "The rationale is that leaders closer to the work better understand what performance should be and how much to push staff," the report outlines.
- Report enterprise measures at least quarterly at the CEO level. Boost it to monthly for business-unit leaders and more frequently for lower staff levels.
- Design quality measures to focus on value-added quality activities and core strategic objectives. More specifically, align them with customer expectations, which occur not only in the delivery process. The report also mentions linking quality measures to compensation.
- Use measures to promote a culture of quality. Celebrate achievements and promote challenging goals.