Quality and Costs

Finding the balance between quality and cost [the broken link was removed] by Thomas Nolan Maureen Bisognano

One of the steps toward a system for improving value is recognizing that waste removal is an essential component of that system, not just a by-product of defect reduction. To alleviate discomfort with setting aims for cost reduction, senior leaders should:

Set aims for cost reduction while also mandating that quality must be maintained or improved by the effort.

In the article they discuss the view provided by Kano’s model of customer satisfactionread more about it.

Deming explained that increasing quality decreases costs. Page 3 of Out of the Crisis: Improve Quality –> Costs decrease because of less rework, fewer mistakes, fewer delays…

Like most models this does not explain everything. Achieving some quality desires does cost more. And the article examines how to look at the issue of cost reduction in health care, where the view that higher quality costs more persists to a larger extent than elsewhere. There is significant room in health care for adopting improvement that will improve quality and reduce costs because the systems are so poorly designed they are both increasing costs and decreasing quality over what could be achieved.


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