Quality Management proved to contribute to improved business performance!
In a recent article published for the Chartered Management Institute and Chartered Quality Institute by the Centre for Economics and Business Research (Cebr), a synopsis of the findings suggested that evidence exists that effective quality management (QM) programmes can “Contribute to increases in share price, profit, revenue and customer retention, as well as employee, customer and user satisfaction. There was also a significant body of evidence indicating the QM programmes, particularly Lean programmes, reduce costs.”
The report contained 3 key conclusions:
i) Quality Management systems have already contributed substantially to the success of organisations. Return on Investment (RoI) data supports this conclusion, indicating that businesses can typically expect to make more from their QM systems than they spend implementing them.
ii) QM systems have, in aggregate, proven themselves important contributors to the health of the UK macroeconomy. In other words, QM programmes have already improved UK macroeconomic outcomes significantly.
iii) It is suggested that, following research through interview respondents, the data indicated an average of the following:
- Revenue RoI of 6:1. i.e. for every £1 spent on a QM programme, revenues were increased by £6
- Average Cost RoI of 16:1. This implies that for every £1 spent on a QM programme, costs were reduced by £16
- One case study respondent’s data yielded a Profit RoI of 3:1, implying that for every £1 spent on QM, profits increased by £3
Lean Six Sigma is desiqned very much with quality in mind and provides the perfect tool for business performance enhancement.