For decades big companies have had extensive quality management programs that have paid off with great leaps in product and service quality, decreased waste, fewer claims, less scrap, etc. Later, as these programs expanded to focus on not just quality of products and service, but quality of processes, they drove efficiency throughout the organizations making big companies leaner than ever and more profitable.
Most of these initiatives are handled by a department set up for this purpose. It could be called Quality Control, Quality Assurance, Continual Improvement, etc. This group designs the system, audits the processes, creates the metrics, and maintains any needed certification.
Small and mid-size businesses want the benefit that the big boys enjoy. They want lean processes, fewer employees, fewer defects, better customer satisfaction, and increased profits too. Unfortunately, smaller companies usually can’t sustain a fully staffed Quality Department. Quality Management systems in these businesses usually consist of several key people wearing the “quality hat” when needed and pulling the rest of the company along. Finance should be one of those key people wearing the “quality hat”.
Finance and Quality are a perfect fit! Finance excels in setting up internal controls to maintain financial data integrity and to secure a company’s assets. Finance audits its processes and its outputs to make sure the controls are working. Finance measures the financial performance of the company with ratios, graphs, spreadsheets and dashboards. Finally, one of the ways Finance tries to improve company performance is through efficiency and lean processes. These are exactly the same things needed in any well-run, effective Quality Management System.
Small and mid-size companies looking to start or improve on a Quality Management System, Lean Program, Six Sigma Initiative, or just work on making their operations better should get someone from Finance on board right away.
Finance, the king of metrics! Yes, we are really good with numbers, metrics, spreadsheets, and graphs. We are great with performance dashboards, but these are only the end products of a good system. In quality systems, metrics need to be meaningful so that you can effectively measure your incremental improvement in product quality and customer satisfaction. Quality systems also cost money, so the measurements you use also need to justify the system’s existence. Be sure you can show, with numbers, how the Quality Management System has increased profits. Finance will be a great help with this.
Don’t just use Finance for the Math! Quality systems are built on processes used to control the results of an operation. They consist of a running series of inputs, operations, and outputs all linked together and feeding each other. Finance does this as second nature. A sales order leads to revenue which leads to costing and changes in inventory value; invoicing leads to accounts receivable which leads to cash management. This is how all financial transactions flow. Finance people think this way from their first Accounting class on. Once again this type of thinking is exactly what you need when designing or improving on a Quality Management System.
Don’t fear the auditor! Certified quality systems need auditing. In many companies, the only employees with audit experience prior to quality certification are on your Finance and Accounting team. They have either performed audits as a public accountant or have been audited by an outside party. They understand the audit purpose, the process, how to prepare for audits, and most importantly how to build a working relationship with your auditor. The company is paying for the services of an auditor, be sure you are getting the most from it. Finance can help.
So QA/QC head on over to Finance and Accounting to get your next recruits!
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