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PRINCIPES OPÉRATIONNELS - QUALITÉ EN ACTION

BUSINESS IMPROVEMENT EN

Business improvement of NUMERAL ADVANCE is focused on Operations.

The main objective is to be at the market quality level.

This business programme is starting by assessing the quality level by a sigma score.

1) Business improvement on operations :

Business improvement is focused on operations (customer relation, sales, production, delivery, billing and maintenance) but operations is coming from strategy. To be clear about business operations objectives, we must have the business strategic outcomes.

The business criteria of operations are :
Compliance to the strategic objectives
Quality and SRE criteria
Delay
Costs

Quality is not to burst the expenses but to strengthen the financial statement of the company and this is monitored by performance. Since 2010, quality is not only for customer satisfaction, but also for third parties concerns such as sustainability with social responsibility and environment protection (SRE).

2) Looking for the right level of quality :

But is the market ready to pay for quality and SRE?

If yes, at what level the customer is willing to pay a for quality or for sustainability concern?

Business experts know that the market can be expecting some quality or sustainability criteria but not giving a penny to pay for it!

So we can see that quality and performance can’t act alone or as an idealistic objective. They must be driven by business: how much the market is ready to pay? What is the added value, from the customer point of view, of quality or sustainability?  

The business strategy will fixed the quality and sustainability objectives (company objectives and engagements) after :

  1. a market expectations analysis,
  2. an evaluation of the company strength and potential growth (Business Power).

3) Market expectations:

Customers have a level of tolerance on quality and delay which can be translated into a Sigma score and a Lean delay.

To evaluate the market expectation, analyse the comments send to the Help Desk (HD). The data gathered at the Help Desk and at the Customer Relation Center will give the information of what the customers or the users, are expecting. The form analysis gives information about performance of the HD and the content analysis gives information about what the customers think.

The market expectations can be different from countries to countries ( benchmark of practices will give more details).

4) Business power of the company :

A company has some resources, some skills and knowledge and all these contribute to its competitive edge. The competitive differentiation, resulting from the competitive edge, is then turned into profitable revenues. This is the business power of the company and it is evaluated by revenues or revenue's growth.

5) Company objectives and engagement:

The company delivers to the market with a Sigma score (Quality and SRE), a Lean delay and costs management.

Lets give more details about the Sigma score :

Company Sigma score meets market expectation

Market expectations Company Sigma score Status Effects

5,5

5,5

 Proposed quality meets quality expectation Is it profitable?

5,7

5,2

 Proposed quality is under quality expectation The market sees the company as low quality. Drop in sales.

4,8

5,3

 Proposed quality is over quality expectation The company is qualified as Quality but loosing money because over invested in quality activities.

The company meets the market expectation without over investment in quality. Is it still profitable?

Size of quality investment

Market expectation

Company quality investment

Quality results

Revenue

Profit

Voice of customer

Voice of business

Under investment

5,5

0

Poor

Drop

Drop

Over investment

5,5

% of Gross Revenue

Good

Growth

Decline

Right size investment

5,5

% of Gross Revenue

Good

Growth

Growth

Italics : figures given as an example.

a) Quality investment and profit of the company:

If the company is right sizing its quality investment but is still not profitable, this means that the market is contradictory: customers expect a high quality level but don’t want to pay for it. In this case, market expectations must be replaced by competitive sigma score for the market or cost trend of the market.

No use in doing quality if no quality is more profitable. To evaluate if no quality is more profitable, one must account the hidden costs of non quality (direct and indirect hidden costs).

Quality investment is always a cost that diminishes a margin. On the other way, you can have a quality cost without a quality infrastructure. The accounting is important and translated what the general policy is.

b) Extend from Quality to Social Responsibility and Environment (SRE) :

Six Sigma quality for customer satisfaction can be extended to Six Sigma general requirements for sustainability, in other words for environment and social responsibility (SRE). But in this case, one must included the market cost of quality (companies contribute to these costs through taxes as the carbon tax…).

So we have the following table:

Table of quality results

 

Size of total quality investment

Market expectation

Company quality and SRE investment

Company SRE taxes

Quality results

SRE results

Revenue

Profit

 Right size

5,5

% of Gross revenue

% of Gross revenue

Good

Bad

Growth

Decline

 

 

 

 

 

 

 

 

Italics : figures given as an example

6) Deployment of the Business improvement :

Have a look at NUMERAL ADVANCE Business Improvement Program
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