Sometimes, we imagine that we need to make trade-offs between creating the best quality product or settling for “pretty good.” That’s not good enough in today’s market. Fortunately, Industry 4.0 technological advancements make it both cost-effective and easier to create the highest quality products at competitive prices. You can reduce the cost of quality (COQ) for a much better return on investment (ROI) by adopting digital solutions in manufacturing.
What is COQ — Cost of Quality
The Cost of Quality or COQ is how much any organization spends to churn out a high-quality, defect-free product. The American Society of Quality (ASQ) explains that total COQ is compared against the “Cost of Poor Quality” (COPQ), or how much a defective product will cost. Some different cost factors rolled into COQ include appraisal costs, internal and external failure, prevention, and any costs associated with production and quality control. The ASQ reports that companies may have COQ that rises to about 40 percent of annual sales revenue, while the COPQ for poor quality can cost up to 15 percent of sales. Creating high-quality products and eliminating defects for a lower COQ is a reality with the right tools. These are some key ways Industry 4.0 gives manufacturing firms the technology to reduce the cost of quality while boosting quality simultaneously:
Focus on Prevention
By analyzing data effectively, decision-makers can find and remedy potential quality problems before they manifest as troublesome defects in the end product. Preventing quality problems requires investment in quality management processes, resulting in impressive ROI in terms of customer loyalty and sales and not having to spend big bucks to remedy defective products and the problems they could cause.
One way up your defect prevention efforts is to invest in technology that quickly analyzes data, identifies leading indicators, and sifts through the background noise to pinpoint potential problems long before they show up in the product. New technological solutions can actually put your workers on the front lines of this effort, giving them a sense of ownership in eliminating potential defects and boosting quality. When they can report issues effectively through good communication channels, it prevents having to scrap or rework entire lines of production.
Train Workers on Quality Standards
Workers want to do a great job when they understand how and why the quality standards exist and how to fulfill them properly. This is not a question of simply training them one time after they’re hired. With the right digital technologies, training can continue up-to-the-minute, every day, and it can help workers become part of the effort and desire to excel at the quality standards. Now, they’re an essential, active part of the driving force behind ensuring that products meet or exceed company standards themselves, which makes achieving process compliance a matter of course, concurrently lowering the COQ and raising the ROI on investing in advanced technologies and solutions that improve quality across the board.
Invest in Software that Boosts Quality
Software focusing on quality can collect insightful data about how your operations and processes impact quality, so you can see the way forward to improving quality and lowering the cost of quality at the same time. A solution like Anvl can sift through operations and quality data in real-time, pinpointing issues and reporting them between supervisors and workers instantaneously through live feed notifications and alerts. This faster reaction time shuts down defects and speeds up the quality improvement process in many manufacturing processes. It also helps you pick up on trends and foresee potential quality issues before they occur, making your company more agile and adaptive in improving quality.
What is the ROI for Investing in Industry 4.0? Can it Really Cut COQ?
On average, companies will spend up to 10 times more to correct a quality issue after it reaches customers than if someone had stopped it in-house beforehand. On the flip side, it costs approximately a tenth of that to invest in solutions that would prevent these types of issues, as reported by ISO update. Furthermore, their research shows that for every dollar you spend on a quality management system (QMS), you could expect to see up to $6 more in revenue, with a significant $16 cut to costs and a potential $3 in boosted profits. Their data also suggest that a QMS can reduce overall costs by as much as 4.8%.
Anvl Cuts COQ
You can’t afford not to upgrade your quality control procedures as more and more companies adopt Industry 4.0 measures. To thrive in tomorrow’s manufacturing universe, you need the best quality control procedures on your side, and you need tools to take it beyond the ordinary. Anvl provides an innovative mobile solution for workers to proactively maintain process compliance and catch quality defects. Click here to request a demo, and contact one of our experts today to learn more.