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 Effective Engineering e-Newsletter – 12/05/2002

This is your bi-weekly e-Newsletter from Effective Engineering Consulting Services (www.effectiveeng.com).  If you would like to receive Effective Engineering e-newsletters as they are published, please send an email to e-newsletter@effectiveeng.com, and we will add you to our distribution list.

eN-0212051:

Poor Quality Products Imply A Poor Quality Company
  By Tom Dennis – President, Effective Engineering [tdennis@effectiveeng.com]

A  Company’s reputation is based on many things – the experience of the senior management team, the company’s financial performance, its stock price, product innovation, delivery on commitments, etc.  The quality of its products stands high on the list as one of the major determinants of a company’s reputation.  Positive reputations are hard to achieve, and take a lot of time, effort, blood, sweat, and tears to build.  However, positive reputations are easy to destroy.  For example, miss your financial commitments and your company and its stock price gets hammered.  Deliver products late to market and you damage not only your company’s reputation, but also the reputations of some of your customers who depend on your timely delivery on your commitments (see eN-112102 – Late Delivery Kills Companies!).  Poor product quality can destroy the reputation of your company’s products, but in most cases has an even more serious impact – when people see a company put out poor quality products, they strongly associate those poor quality products as coming from a poor quality company.  You are what you make!

A reputation as a poor quality company is well deserved if company releases poor quality products.  What kind of company would knowingly release poor quality products?  What kind of people must a company employ who are content to release poor quality products?  What kinds of poor development processes must exist for poor quality products to get released?  What kinds of quality assurance and quality control processes allow poor quality products to make it out the door?  If a company can’t control the quality of its products, which are what enable the company to generate revenues, then why should people have any faith in other aspects of the company – its financial reporting, its marketing plans, its sales projections, etc.

Poor quality products not only have a direct impact on the reputation of the company, as discussed above, but also have a direct impact on the financials of the company as well.  They directly impact both the company’s top line (revenues) and its bottom line (profits).  A look at the graph at www.effectiveeng.com/the_problem.htm (also shown here) shows graphically the business impact of poor product quality.  The blue portions of this graph show the triple impact that occurs when a company develops and delivers poor quality products. 
(1) During development, poor quality causes late delivery, in added test time, in added development time to correct problems found, and in additional people being added to try to overcome the problems encountered.  This adds significantly to development costs, reducing the bottom line. 
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2) Once poor quality products are released to the field, word of that poor quality quickly spreads, and results in reduced sales, from some who will return product they are not satisfied with, and from others who will never buy the poor quality product in the first place.  This reduces ongoing revenues, often significantly, thus impacting both the top and bottom lines. 
(3) With poor quality product in the field, customer support issues will quickly grow, and this will in turn require additional engineering support people to be assigned.  These added support and engineering costs will add to development costs, often for prolonged periods of time, further reducing the bottom line.

What needs to be done to be able to deliver superior quality products?  Quality must be designed in – it cannot be tested in.  Critical to Quality by Design is:
► Excellent up-front requirements, so you know you are building what your customers really want.
► Highly motivated people working together effectively as a team with the right people assigned to the right tasks.
► Effective development methodologies and processes that ensure good quality practices are being properly followed, without being overburdening.
► Superior test / quality assurance methodologies and processes that test products from a wide variety of perspectives.
► Project management methodologies and processes that enable successful project planning and tracking.
► Release engineering methodologies and processes so that the proper criteria are set to ensure the products are truly ready to be released. 

These and more elements of effective engineering will be addressed in more detail in subsequent e-Newsletters.

The key thing to remember is that it is not just the reputation of your products that is on the line.  It is your individual reputation and the reputation of your entire company!


Copyright © 2002 Effective Engineering Consulting Services, All Rights Reserved

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