Does your business or organisation have a structured and formal problem-solving methodology to ensure you “fix it forever”?

Customer Complaints

One of the supposedly biggest costs of poor quality is the processing of customer complaints. You may (or will) get real feedback from your customers, which are often recorded and managed as Customer/Consumer Complaints. The cost includes processing the complaint by mail or by phone and recording it, investigating the root cause of the problem (if at all done to a full extent), and dealing with corrective and preventive action. This may involve a lot of discussions with the customer, their end-user, the parties involved in the supply chain (storage, shipping, and handling), the key stakeholders of your company, your suppliers, and many more. One can say that you don’t need to do all these and instead just give your customer a refund or offer to repair, replace or rework the goods or services. Of which by the way, a refund, repair, replace or rework is your next biggest cost of quality failures.

Fix it Forever

Investigating a problem due to a quality failure is just so important. This is where you will need to perform a root cause analysis by applying quality tools such as a fishbone diagram and 5 whys, and apply some corrective and preventive actions so it doesn’t happen again. There has to be a consistent mindset that you have to FIX IT FOREVER by “getting to the bottom of it”. It is important that the business employs a well-structured but simple problem-solving methodology, which should also be stated in your quality policy.

Root Cause Analysis

It is easy to “contain” the situation (such as replacing, repairing, reworking or refunding) and not do anything else. I’ve seen this happen a lot in many businesses and the common reason is that everyone is too busy fighting fires. You must spend more time and effort in rectifying the root causes of your major quality problems (as well as minor ones, especially if they are recurring). By doing this properly, then naturally your costs of managing customer complaints will go up. The expected way to minimise these costs is to reduce your quality failures and problems and not simply bypass this important step.

To complement your problem-solving methodology, you should implement a performance management system whereby you start monitoring quality metrics such as customer complaints and overall costs of poor quality. Managing these key performance indicators will simply help your organisation improve, reduce your quality costs and ensure you always satisfy your customers.

Implement a Quality Management System

An effective Quality Management System (QMS) implemented at your company and certified to ISO 9001 can help your company avoid or minimise these costs of poor quality. A management system will help you have procedures for the control of your non-conforming goods or services as well as procedures for dealing with corrective, preventive and improvement actions.

I’d love to hear your take on this article and whether it will influence how you run your own business. If I can be of assistance in understanding or applying anything you’ve read, email me at explore@gagement.com.au.