While it’s often thought to be much lower, multiple sources have measured quality-related costs at 10 to 20% or more of an organization’s annual revenue. Put simply, that means a company with $1 billion in annual revenue loses $100 million or more from its bottom line as a price for quality.
It’s a huge number, a fact recognized by companies heavily invested in Lean, Six Sigma and other operational excellence initiatives. And while results of these programs are often reported as savings over several years, layered process audit (LPA) programs are simple and effective enough to drive big results in a matter of months.
LPAs require checking high-risk processes as often as every shift, drawing auditors from every layer of the organization. Automation is key to achieving this frequency with minimal overhead, reducing quality costs, improving visibility and developing a culture of quality.
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