No quality, no business

Traditionally businesses spend much energy trying to deliver a good quality product or service. Some may argue that this is enough to succeed in today's competitive environment. But is it?

When we talk about the quality of management, we are referring to the way we manage our business. This includes the business across the hierarchy from chairman to cleaner (the 'C to C concept') as well as across the value-adding chain involving all employees and clients and suppliers. No one is left out and no process or product is beyond improvement.

Innovation, research and development is a key aspect of quality, necessary to keep ahead of the competition, offer new solutions that add value to the client, and meet the requirements of the increasing stringent environmental regulations that impinge on the cost of sales. Environmental regulations, for example, would create the need to innovate products and services that are demanded by the market as well as being environment-friendly.

Innovation is not only related to the product in isolation from the internal processes, which should be improved to maintain efficiency and cost-effectiveness. A systematic, consistent and persistent approach must ensure adherence to market requirements from idea to client. It is imperative to renew products, processes and services in such a way that the business remains flexible enough to adapt to the changing market needs.

Innovation needs to be supported by ICT, a well known commodity but many times underutilised. Why? Because we rarely use the data gathered in our systems over the years to analyse the needs of the market we operate in by using simple market intelligence initiatives. How many of us are using ICT to monitor market and business trends, key performance indicators and to improve processes, add value and reduce waste, reduce bureaucracy, paperwork and to enhance internal and collaboration-driven communication?

Even worse, many companies rarely use systems to follow up business leads, contacts, and walk-in enquiries. Therefore, the opportunity to capture new business is lost and the data is most probably held in the system.

Research and development of new systems and solutions, and using data and information, we need to look at the whole infrastructure that we are operating in. We need to analyse external supporting services, such as logistics, transportation, location, response time from suppliers and other ancillary services to maintain our competitive advantage.

These all come together as part of the supply chain and are not to be under-estimated in as far as the performance of the business is concerned. Facilities management is also another crucial determinant to enable a business to attract customers, operate efficiently and to create an environment conducive for people to work comfortably. The quality of the facilities is a show-case of the seriousness of the management to do business consistently and reliably.

Utility rates are rising, demands to meet regulations are always on the increase, and consequently costs are on the increase. As part of the continuous improvement strategy, we must look at ways of how we can save costs, minimise energy consumption and reduce losses and waste by using alternative energy sources that are cost effective with a return on investment that is viable.

We cannot sit back and hope that these services will be offered at lower rates. We need to face reality. Internally, companies are encouraged to continuously analyse their machinery, equipment, capacity utilisation planning systems, total preventive maintenance programmes and technological solutions that help reduce costs and improve efficiency.

Some may argue: "It's all well and good to have all this, but what we care about is the bottom line." Fair enough - one cannot underestimate the relevance of monitoring the bottom line. However, is it only the bottom line that matters, or is there other important financial information worth reading and monitoring regularly?

We have come across many situations where companies still see the results at auditing stage, which is at times too late. Good companies who give importance to quality of management are definitely monitoring various performance indicators on a monthly/quarterly basis. This includes monitoring stock levels, cash flow, sales performance, cost of sales/production, and turnover per capita.

World class companies go beyond the financial aspects and also monitor and improve overall efficiency, through output times, cost of quality, staff turnover, sickness, absenteeism, hours of training per person and much more.

Maintaining a competitive business that is sustainable over the long term is not an easy task in today's business environment. The current global economic situation is by no means making it easier. It is at times like these that many companies look internally at their process and resources and start making cost-cutting exercises, among which making people redundant, people who have possibly cost the company thousands of euros to train, coach, develop and possibly promote.

This may be one of the solutions, but it is not the ultimate. This approach does not help towards achieving the desired culture in the company, which takes years to nurture and sustain. Culture depends on people, but also on a style of leadership with a vision. People make things happen in business and people are definitely not the easiest to handle. When we talk about our corporate social responsibility this is an area where we have to tread carefully.

Think about bringing back all those lost skills and maintaining a culture of quality at the same time. Unfortunately if loss of business demand dictates so, than such options may be the undesired solutions.

The importance of continuously monitoring products and services to offer new and value-adding solutions in the market, at the right time, making good use of knowledge and data, involving all stakeholders in the supply chain, adapting technology to make our business cost effective and involving people is all about the quality of management. We are not talking about product quality here, but the way we run the show as well as creating a path for a sustainable future.

The market says: 'no quality - no business'. The market dictates the needs, the quality expected, the price, the cost, the logistics, timeliness... Without a market for our goods and services, there is no business.

The Federation of Industry's quality management committee is holding a quality management conference during the European Quality week on Thursday. For more information contact Sara Buttigieg on 2122 2074 or at sara.buttigieg@foi.org.mt.

Mr Friggieri is chairman of the Federation of Industry's quality management committee and general manager of Adpro-Instruments Ltd and director of Melitech Design Ltd.