Big Numbers for Quality

This is a guest post from my colleague Tim Egloff. He is the product marketing manager for our Quality Management solution.

When we talk about a manufacturer’s total cost of quality (TCQ), it’s generally referred to as a percentage of total revenue. The variables that make up this type of cost fall under two main categories; assurance costs and failure costs.

In most cases these costs and the activities that surround them are separate and distinct processes within the business environment effectively making it difficult to fully quantify TCQ and therefore truly improve or reduce TCQ. But imagine just a 3 or 4% decrease in TCQ. As a percent of revenue, that’s a pretty big impact to your bottom line.

In fact, in a recent Analyst Insight report from Aberdeen, they surveyed over 500 manufacturers and found that those who have defined interoperability between PLM and quality management can improve TCQ by 8%! Imagine an 8% impact to your bottom line… let that soak in for a bit.

This crucial connection as outlined by Aberdeen’s research shows an amazing return because product quality is a lifecycle process. When disconnected or only available to a small, discrete audience during new product development and launch processes, product quality can quickly take a back seat to time-to-market and cost containment.

Feel free to read the paper here. I’m sure it will open your eyes to the value of a closed loop quality solution which integrates quality information with your product lifecycle management processes. While it’s not a trivial task, it is why Siemens PLM Software has invested in Lifecycle Quality Management and offers solutions for design, planning and production.

Click here for further information on our Quality Management solutions.