Industryweek 12058 Quality T

Financial Impact of Quality Remains a Question

July 19, 2016
"From how organizations use quality to drive profitability, to how quality is governed, organizations are becoming more proactive at using quality to drive organizational success."

Quality got an upgrade as a strategic asset, according to findings in a new ASQ report, but its financial implications remain a mystery for many.

These are two of the takeaways from the Global State of Quality 2 Research: Discoveries 2016 report, which expands upon research reported on in 2013 by quality association ASQ and its research partner, APQC.

More specifically, 36% of survey respondents in the latest research said their organizations identified quality as a strategic asset and competitive differentiator, up from 22% in the 2013 report. Just 14% said quality is viewed simply as a compliance activity, down from 22% in the 2013 inaugural report.

"From how organizations use quality to drive profitability, to how quality is governed, organizations are becoming more proactive at using quality to drive organizational success," Discoveries 2016 states.

However, despite the upgrade on quality's importance to the organization, its financial impact presents challenges. Fully 60% of survey respondents said they don't know or don't measure the financial impact of quality.

"This lack of measurement may be attributed to not having a common method for capturing the financial impact," the report suggests. "Additionally, when it comes to setbacks, an organization’s culture could discourage calling attention to remediation costs versus simply not having an ability to measure."

The report's findings are based on responses from nearly 1,700 participants, 54% coming from manufacturing. Global State of Quality 2 Research: Discoveries 2016 is available for download.

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