The High Cost of Low Quality

DIRFT—Do It Right the First Time—is the first of Philip Crosby's four absolutes of total quality management. In his 1979 best seller, Quality Is Free, Crosby stated, “Quality is free. It's not a gift, but it is free. What costs money are the un-quality things—all the actions that involve not doing jobs right the first time.”

Experienced project managers know that on any project there are limits on the amount of time and money that may be used. There is also a set of requirements that the customer is expecting the project to meet. Once the requirements have been agreed upon, the project manager is held accountable to a standard that includes the customer's expectations of quality, as well as the schedule and budget constraints given by senior management. Unfortunately, it doesn't matter if you hit your deadlines and stay under budget if the final product doesn't conform to requirements. The customer will demand that you go back and do it right, which means the budget and schedule need to be extended anyway.

Missing deadlines and going over budget are only two of the problems associated with un-quality. In fact, the cost of poor quality (COPQ) is far greater than the cost of DIRFT. Some of the costs are obvious, such as

• Scrap
• Rework
• Retest and re-inspection
• Equipment downtime
• Troubleshooting
• Extra production operations
• Rejected jobs
• Field service
• Refunds

However, there are additional hidden costs that some studies have shown may cost five to ten times more:

• Damaged reputation
• Lost customer goodwill
• Extra setups and disrupted production schedules
• High labor costs due to emergency production
• Lost machine capacity
• Reinspection and re-rework
• Lost management time and unexpected overtime

As a project manager, ask yourself this: How does this apply to my projects? Consider the time and effort involved every time something doesn't meet expectations. How much re-planning do you do? How do you get the resources assigned to your project after you claimed it was done? Consider the management levels that get involved in your project when things don't go as planned. How much does it cost the company when the senior VP and the CFO sit in on your weekly status meetings? The real and figurative costs are worth avoiding.

The easiest to state and most difficult to do is this: Plan quality into your project. This doesn't mean adding tests and inspections throughout the project, although some of that is necessary. Quality is an ongoing process that the project management team needs to focus on throughout the project. When the project begins, the project manager should prepare an overall quality plan with three major components:

1. Customer quality expectations and acceptance criteria specify that quality is determined by the customer, not by the project manager. The project management team can use the customer's quality expectations to define measurable criteria by which the deliverables will be deemed acceptable. The project team and customer then have a common expectation of what is required for each deliverable to be accepted.
   
   
2. Configuration management is the discipline of keeping evolving products under control, and thus contributes to satisfying quality constraints. It is the management of features and functions through control of changes made to a system throughout its development and operational life.
   
   
3. Quality control is the way to ensure that deliverables meet the quality criteria specified and to find ways to eliminate the causes of un-quality. This process might include quality reviews, which are structured procedures designed to assess whether a product conforms to requirements.
   

DIRFT doesn't just refer to the products of the project; it also means managing quality during the initial stages of the project. That way, the plans and designs will give the project management team the information they need to really do it right the first time, and save the project time and money, which are already in short supply.

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