Up Your Quality Game for a Big Jump in Business Profits

Research shows that most SME’s lose between 5%-15% of sales revenue as a result of the lack of attention to quality¹. Lose this much revenue and a significant portion of net profit is lost as a result, holding companies back from growth and providing a decent ROI to its owner. In addition, buyers in domestic and international markets are demanding that their suppliers operate quality management systems as a means of ensuing strong commitment to quality, productivity, cost competitiveness, and customer satisfaction.

So what can an owner do about this? Traditionally organisations throughout the world are using tools such as the ISO 9000 series of standards to help them achieve high standards of quality. However the ISO9000 standard is a big beast and requires a company to commit considerable management and financial resources to implement it. After all the ISO 9000 standards were originally developed for large manufacturing companies supplying products and services to the defence, aerospace and nuclear industries.

A more workable option needed to be developed that better suited the small business situation in NZ where the owner is often driving such initiatives. A good example of such a model has been put together by Telarc Limited, a New Zealand management systems certification body. They have developed the Q-Base Code quality management system for SME’s in the early 1990s. If improving your quality game, eliminating mistakes and satisfying customer requirements for a quality guarantee is needed in your company, then this Q-Base code should be looked at.

There are seven clauses in the Q-Base Code. To become registered you need to meet the requirements of each clause. You will need to write down what you do in a way that works for you. Briefly, here’s what you need to do:

• Assign a staff member to the job of Quality Coordinator

• Have a way of controlling critical documents and records

• Have a way of understanding your customers’ needs

• Have a system for purchasing

• Train staff for the work that they do

• Have plans for inspecting work, both in progress and when finished

• Have a method for continual improvement.

Even this Q-Base code will take some time and effort to implement, but the great thing about improving quality control processes is that any savings in production costs and reduced mistakes goes STRAIGHT TO THE BOTTOM LINE. To achieve the same increase in profits by focusing on growing revenue is likely to take much longer and take far more resources. Aim on working smarter, not harder.

Find out more here: Small business coaching

¹Sirma Karapeeva, Ministry of Economic Development