Hot Topics

April-May-June 2002

Hot Topics

Digging Deeper
What Does Quality Really Cost?
By John Matukaitis

In my last column (see Jan-Feb-March DWM 2002, page 16), I asked you to think about the word quality, such as “what is it?” and “why does it mean different things to different people?” What was not asked was “how much does it cost?,” but should be asked is “how much does quality really cost?”

The new construction market is different from the replacement window market, which is different from the commercial market, just as the vinyl window market differs from the aluminum window market. Each market has different expectations.

The profit penalty attributable to low-quality products is increasing. The chorus of criticism being directed at product quality suggests that in some fenestration product companies this situation should be reviewed closely. Purchasers of fenestration products are now better educated and better informed, more militant and better organized. Buyers at many fenestration companies strive to negotiate purchase agreements that shift more of the cost of field failures back to their vendors. Furthermore, legislators are sensitive to the public’s concern over product quality, product safety and meaningful warranty statements. Such concern has translated into new laws and regulations that escalate product liability risks borne by manufacturers.

Product design imparts a significant impact on both quality and cost. Careful attention needs to be given to manufacturability, functionality and product durability in the field. To cope with the losses attributable to low-quality products, managers need to supplement their conventional, internal view of quality with two additional assessments. The first is the accuracy of management’s perception of customer expectations regarding product performance or appearance. The second is the degree to which product designers have an explicit bridge connecting customer expectations to relevant steps in the production process. When managers neglect or ignore these two latter dimensions of quality, their customers’ appraisal of product quality is likely to diverge from the internal appraisal rendered by their control specialists. When this happens, consider product quality to be a very tangible, out-of-control, expensive problem.

The cost of quality begins with meeting customer expectations consistently. If your product does not satisfy those expectations, someone else’s product probably will. What has this cost you? Your product design looks great on the drawing board, but can it be manufactured on a cost basis that is consistent with your profit objectives?

More importantly, pinching a penny now can cost you a hundred times more in the future. You pay a certain amount for a supply of a critical component that meets or exceeds your established quality standards. By paying “X” percent less for a material that is “almost as good,” what is your true cost? More than likely, the end result of poor quality is the molehill that over a relatively short period of time turns into a mountain. Do you include in your finished product’s cost calculations how today’s quality affects your customers’ buying decision in the future? What about your reputation in your served market? These intangible, quality-related costs require as much of your attention as do costs for materials of construction, if not more.

Other quality costs that are often overlooked by many fenestration companies are the time, people and capital required to form a real, working partnership with their suppliers. Many companies are asking all of their vendors for a blanket cost reduction. Does the buyer really think the vendor will take those reductions out of their margins? The real cost is that the company’s quality is only as good as their suppliers’ quality, and that quality has an associated cost.

Quality products require tangible, intangible, long-term, short-term, continuous costs. Do you really know all the costs required to produce a quality product?

John Matukaitis serves as marketing director for Delchem Inc., based in Wilmington, Del.