Stop Profits Plummeting with a Quality Management Plan

Stop Profits Plummeting with a Quality Management Plan process.st/quality-management-plan November 16, 2020

Amanda Greenwood November 16, 2020

Quality management. Oh, how I love thee.

You’ve given us rubber flavored cookies, phones that go up in smoke, and exploding car airbags (we’ll get to all of that).

Last year, 337 food products passed through stringent quality management procedures and went to market with major issues. So major, in fact, that each and every one of those products had to be recalled. This cost the US economy over $7 million.

But, the cost of poor quality management surrounding the production of food is only a tiny part of the picture: “Defective product incidents have caused in excess of $2 billion of losses over five years” – Allianz, Product Recall, Managing the Impact of the New Risk Landscape

1/11

When you consider that the global quality management software market is valued at $7.96 billion, why are we, as consumers, still being exposed to low quality, defective products?

Because, contrary to what most organizations think, there is more to quality management than simply making a good product. You need to know how you’re going to make it good and how you’re going to make sure it remains good.

In other words, you need a plan. A quality management plan to be exact.

The reasons for this will become even clearer as we make our way through this Process Street post and discuss: Let’s get planning.

What is a quality management plan?

A quality management plan sits under the umbrella of quality management. Quality management is about making sure that everything you produce reaches certain standards, expectations, and requirements.

A quality management plan (QMP) is a document that describes exactly how you’re going to reach those standards, expectations, and requirements and how you’re going to maintain them.

“It describes how applicable policies, procedures, and guidelines will be implemented to achieve the quality objectives.” – Project Risk Coach, How to Develop a Quality Management Plan It defines what quality means to you, as an organization, and it sets out a framework to help you achieve it.

How does a quality management plan work?

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives.” – Project Risk Coach, How to Develop a Quality Management Plan An effective quality management plan protects you, the project, the product or service you’re producing, your suppliers, and most importantly your customers.

It lays out the expectations at the beginning of a project or manufacturing cycle so that everyone is clear on what needs to happen, how it needs to happen, and when it needs to happen. It prevents nasty surprises, and it keeps everything and everyone aligned and working towards the same agreed goals, standards, and requirements.

2/11

Let’s revisit the rubber flavored cookies I mentioned earlier.

Source

Back in 2019, Nestlé USA had to recall over 26 cookie dough products because they were filled with big chunks of delicious dark choc…no, sorry, delicious black rubber. Although no one was killed and Nestlé fixed the issue quickly, the damage to their reputation was significant. After all, this wasn’t the first time they had to recall their cookie dough. But hey, that’s a story for another time.

The point is, I’m not sure whether or not Nestlé had a quality management plan in place during the production of their cookie dough products, but one might assume: At some point, manufacturing process requirements for making the cookie dough were flaunted; were this not the case, the rubber wouldn’t have contaminated the dough in the first place.

The standards for testing the cookie dough were not rigorous enough; otherwise, the traces of rubber would’ve been picked up before the cookie dough went out to customers.

Of course, it could have been simple human error. But even then, a solid quality management plan can help contribute to a reduction in human error. What could Nestlé have done to meet manufacturing and testing requirements and avoid this embarrassing product recall altogether?

You guessed it:

3/11

Specified the exact quality guidelines and procedure for the production of the cookie dough in a quality management plan.

Detailed the exact standards and requirements for the testing of the cookie dough in a quality management plan.

What is the most useful thing about a quality management plan?

Aside from catching faulty products before they go to market and damage reputations, why is a quality management plan such a vital tool to have when managing quality?

For one, it will save you a great deal of money.

“Quality is free, but low quality always comes with a price.” – Spark, 7 Ways to Reduce Quality Costs It’s estimated that the costs incurred from poor quality accounts for roughly 20% of a company’s annual turnover.

Yikes!

What are these costs & where do they come from?

“Between lost sales, replacement costs, government sanctions, and lawsuits, a significant recall can become a multi-billion dollar ordeal.” – Investopedia, How Do Recalls Affect a Company?

A product that’s poor in quality will often need to be re-worked, re-tested, or completely re-made.

When this happens, the organization has to pay extra to make sure the product is fit for purpose. So, the cost of quality increases.

Look what happened with Samsung, for example.

They launched the Galaxy Note 7 back in August of 2016. Two months later they had to recall over two million devices due to faulty batteries that overheated and caused the devices to go up in smoke.

4/11

Source

It cost them over $3.1 billion to recall, and re-make the Galaxy Note 7. But, unfortunately, the Galaxy Note 7 replacements also caught on fire, which forced them to recall the product for a second time, and cancel the device for good.

You know what I’m going to say.

If they’d had a quality management plan that specified exact testing requirements for the batteries, the monetary and reputational costs Samsung suffered might have been avoided.

How? Let’s find out.

How does a quality management plan help reduce the cost of quality?

“Things go much more smoothly if you take some time to consider what you need to do and plan the path for doing it.” – Cebos, What Makes a Quality Management System Plan So Important A quality management plan provides you with a clear path to follow to achieve your product quality goals, first-time around.

For example, imagine you’re building a house. Without a plan.

How do you know what materials to use? Or if the measurements are correct? Or that the walls won’t fall down? Or how much it will cost and if you can afford it? Or how many laborers you’ll need? How do you know when it will be finished and you can move in?

5/11

The answer is: you don’t know!

This may be an extreme example, but the basic premise holds up. Without a plan, you’ll have to make key decisions on the fly. As a result of this, you’ll make countless bad choices, hundreds of silly mistakes, and you’ll spend more time and money paying for work to be re-done, instead of moving logically from one area of the build to the next.

Source

You’ll end up with a house that has cost you way more than you expected (and budgeted for) to build.

Without a quality management plan: “Chances are, your actions to achieve that level of quality will not have been as intentional as you would have liked.” – The Digital Project Manager, How To Develop A Quality Management Plan Take Honda for example.

Only four years ago, Honda (amongst several other car manufacturers) were forced to recall 51 million vehicles worldwide, because they were sold to customers with defective airbags.

It cost Honda $5 billion to cover the expense of recalling these vehicles.

Again, I’m not sure if Honda followed a quality management plan during the manufacturing process of these defective vehicles – but if they did, it wasn’t an effective one.

6/11

It’s my belief that if they’d created and followed an effective quality management plan, they could’ve compelled the suppliers of these airbags (the now-bankrupt Japanese firm, Takata) to pass specific safety tests and standards. That way, the airbags would’ve been safe and they would’ve saved over $5 billion in recall costs.

What’s included in a quality management plan?

When you’re creating a plan, and I mean any sort of plan, you should always aim to provide answers to the following three questions: 1. What do you want to achieve?

2. How are you going to achieve it?

3. Who is responsible for achieving it?

Creating a quality management plan is no exception. If you document answers to these three questions, you will have a basic plan for managing quality.

But, to create an effective quality management plan we need a little more.

Let’s take a closer look at each of these questions and determine how you should answer them to form an effective quality management plan.

Quality management plan key component #1: What do you want to achieve?

To answer this question, take your main objective and break it down into actionable deliverables.

For each deliverable, specify exactly what your expectations are (in terms of quality) in detail. Think about product specifications, use cases, aesthetic requirements, expected timings, materials needed, and, of course, costs.

For example, let’s say I’m an ice cream manufacturer and my main objective is to create a new range of dairy-free ice cream that’s suitable for vegans.

Source

My actionable deliverables and quality expectations for this objective might be something like: Deliverable 1: Make ice cream that is dairy-free & vegan friendly 7/11

Quality expectations: All ingredients must be sourced from vegan suppliers; All ingredients must be 100% dairy-free; All ingredients must be locally sourced to keep the cost of production low; All equipment used to manufacture this product must be free from all traces of animal or animal bi-products.

Deliverable 2: Make dairy-free vegan ice cream that tastes, looks, and ‘behaves’ like traditional ice cream Quality expectations: The finished product must taste the same as our other ice cream ranges; The finished product must look the same as our other ice cream ranges; The finished product must freeze at 0°F or colder; The finished product must begin to melt when exposed to temperatures above 10°F or warmer; The texture of the finished product must be soft, smooth, and creamy – like our other ice cream ranges.

Quality management plan key component #2: How are you going to achieve it?

Once you know what you want to achieve, you need to look at how you’re going to achieve it.

This is where you need to go into minute detail. Describe exactly what tests you need to perform, what procedures you need to follow, and what standards you need to meet to achieve your deliverables.

I know I’m biased working for Process Street, but super-powered checklists are a great way to control how you achieve your deliverables .

Checklists allow you to standardize your approach (and therefore reduce errors), document key requirements and standards, hold people accountable, and keep everyone working towards the same end result.

You’ll see what I mean as we go through this section!

For my dairy-free, vegan-friendly ice cream quality management plan, I would include the following to describe how I plan to meet my deliverables:

8/11

Processes to meet customer expectations I need to find out what my target market is expecting from my dairy-free vegan ice cream and establish how I plan to meet those expectations.

Source

So, I might create a competitive analysis process, to establish what the competition is offering in terms of dairy-free vegan ice cream products, marketing, and pricing.

I might also create a customer feedback process, to establish what my target market is looking for in dairy-free vegan-friendly ice cream.

Then, I might combine the results from both these processes, and create a checklist that the production team can work their way through each time they make a batch of ice cream, to make sure they’re meeting customer expectations.

Activities to control quality I need to define what quality control activities the production team must perform, throughout the manufacturing process, to verify that the ice cream is high quality, dairyfree, vegan friendly, and meets hygiene standards.

For example, to make sure the ice cream has zero traces of animal products in it, and is therefore certifiable as a vegan product, I could create a quality control checklist which lists out tasks like: ☑️ Source ingredients from certified vegan suppliers only. ☑️ Sterilize equipment before production starts. ☑️ Send a finished sample to a food testing agency.

And, to make sure I’m meeting the appropriate food hygiene levels, I might ask my production team to follow a FSSC 22000: ISO/TS 22002-1 Internal Audit Checklist, or something similar.

Standards to meet quality On top of specifying the activities my production team needs to perform to control quality, I also need to establish what standards they should follow, to make sure the ice cream meets each of my specified deliverables.

To do this, I could document the operating standards that must be followed to make sure the ice cream meets certain taste, texture, and aesthetic requirements in a Master SOP Structure Template, for example.

9/11

Tools used to manage quality I need to list all the tools I plan to use to manage, not only the quality of my ice cream, but the quality of my production and testing processes too. This will enable me to ensure that we, as a team, are achieving consistently high levels of quality and also continuously improving wherever possible.

For instance, I might use the Pareto Chart to make sure my production lines are running as efficiently as possible.

Or, I might use project management software like Jira to manage project timings, and I might use Process Street to standardize the production team’s approach to manufacturing.

Testing requirements I need to write specific acceptance criteria that confirms what the tester will need to do when they’re testing the ice cream.

I’ll need to include what they need to test, when they need to test it, the standards they need to test against, and what constitutes a pass or a fail.

Again, checklists would be a perfect way to document the acceptance criteria and make sure the team follows the testing process to the letter. Plus, if you can utilize a feature like Conditional Logic (which is based on if/then logic), the team can test multiple scenarios and get different results from a single streamlined process. This way, nothing slips through unnoticed and you end up spending less time and money fully building out confusing edgecase processes that you’ll only ever use once.

Quality management plan key component #3: Who is responsible for achieving it?

This is where you need to divide up the actions you’ve detailed in the previous section, decide who will be accountable for each, and assign out key responsibilities.

With my dairy-free vegan ice cream, I might assign specific tasks to members of the production, manufacturing, and testing team so they are in control and accountable for what they deliver.

So you see! Having a quality management plan means you can continuously monitor and improve your product and your processes to achieve the highest quality possible, every time.

How to enforce a quality management plan As I’ve previously mentioned, you could use business process management (BPM) software, like Process Street to help you enforce your quality management plan, or you 10/11

could use good ol’ Google Docs to record your standards and requirements and make sure your team is following them.

With a BPM platform like Process Street, you could run checklists that specify what tasks need to be completed to achieve the standards or requirements needed to keep quality levels consistently high.

Assign these checklists to team members so they have complete control and accountability for what they’re delivering. Track progress through these checklists to make sure there are no major problems. Make complicated processes easy to follow with Conditional Logic, and add Approval tasks to your checklists so you can control key decisions.

To find out a little more about Process Street and how you can use it to enforce your quality management plans, watch this video and read this article: If you want to find out even more about Process Street, sign up for a free account here.

So, we’ve seen examples of poor (or non-existent) quality management planning, but I always like to leave on a positive note.

Who executes their quality management plans well?

Delphi Corp.

Since 1998, Delphi has received 298 quality and excellence awards , including 235 awards from its customers.

How? Once again, you guessed it: “The company points to a number of quality-related factors, including Improve Supplier Quality through executive involvement and the Advanced Product Quality Planning process.”

– Quality Mag, Top 100 in Quality Customers don’t accept “mistakes” anymore, so make sure you’re not making them!

11/11