Productivity vs. Quality

How does quality relate to productivity? Do these performance variables reinforce each other or are they mutually exclusive? Must improved quality come at the expense of productivity?

Management traditionally has viewed quality and productivity essentially as tradeoffs. To achieve significant improvements in one, some degradation in the other must be accepted. Quality could only be improved at the expense of productivity and vice versa. Yet many firms today operate under the philosophy that improved quality results in improved productivity.

If quality is viewed in an absolute sense—improved quality equating with absolute goodness or tighter tolerances—it may indeed be difficult to improve quality without added cost. If on the other hand quality is viewed as conformance to specifications, a relationship to productivity becomes more apparent. If the product is produced with defects, then it must be reworked, reprocessed, or reproduced. The result is more resources—people, material, and equipment.

This leads to the concept of process quality, which has a clear and direct correlation with productivity. While our finished products may ultimately conform to specifications, the quality of the process that produced those products can vary widely and will have a major bearing on the productivity of the organization.

Poor quality performance increases the inputs required to produce a given amount of good output. Rework certainly increases the amount of labor required and probably increases the capital, material, and energy inputs as well. Waste and scrap increases the need for tighter inspection and controls, which of course require added resources.

If substantial amounts of product must be reworked or reprocessed, if raw materials are defective, if waste and material losses are excessive, if scrap losses are high, the organization can never reach the higher levels of either quality or productivity.

With poor quality a substantial amount of organization’s resources must be devoted to correcting defects and handling wastes rather than producing goods. As quality improves, the resources required to produce a given amount of output decreases, and that translates to improved productivity.

Quality cannot be inspected into the product. According to Edward Deming, “You don’t get ahead by making products and separating the good from the bad, because that is wasteful.”

The concept of conducting extensive inspection activities in order to catch the defective items is becoming outdated. Today’s emphasis is on the prevention of defects rather than inspection. This requires the collective effort of the employees and the management.

Quality is everyone’s job. Accountability for quality should lie with those doing the work. The role of quality professional is shifting from an enforcer to a facilitator—one who educates, trains, and advises. He is the person who should establish a culture for quality improvement in the organization.

Just as productivity improvement must be an explicit responsibility of everyone in the organization, so must quality improvement. It should be an integral part of everyone’s job.

Kaizen (Technical Newsletter of Pond’s (India) Ltd., January 18th 1992.

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