Dr. Harrington's Thoughts on Performance Improvement
Many quality professionals claim that quality and productivity are two sides of the same coin. That is not true. They may overlap, but they are very different in nature. You can drive your organization bankrupt by focusing too much on quality and never getting the product out and you can also drive your company into bankruptcy by pushing productivity and shipping bad products. What you really need to do is focus on performance improvement. Performance improves under three conditions and three conditions only:
Of course, what we're trying to accomplish is to bring up quality and productivity together.
But when you think about it, quality, productivity, cost and cycle time are only secondary considerations. What management is really interested in is performance improvement. Typically, management measures performance improvement in:
- When quality remains constant and productivity goes up
- When productivity remains constant and quality goes up, and
- When quality and productivity go up together.
- Return on Assets(ROA) Changes in this measurement indicate how an individual program impacts profitability.
- Value Added per Employee(VAE) Changes in this measurement reflect how an individual program improves productivity.
- Customer Satisfaction(CS) Changes in this measurement are key indicators of sustained long-term performance
- Market Share(MS) Changes in this measurement indicate how well the organization is performing compared to its competition.