Cost Management
Costs and Expenses Reduction

What’s the relationship between quality management and reducing costs?

Various businessmen agree that providing the best service possible is what guarantees the public’s interest. This starts with the product or service concept and ends with its delivery to the end user and customer service. This philosophy usually leads to the creation of a total quality management system for the services that the company provides the public.

However, for some companies this task can present problems, because they believe that increasing and controlling product quality means increasing production costs. In fact, what tends to occur is the opposite: the company reduces its costs and increases profitability.

To illustrate this better, we’ve singled out some ways in which a quality management system can increase your products’ profit margins. Follow along!

Identifying process failures

To evaluate the final quality of a product, you need to think about the entire process that’s involved in making it, from the raw materials to its delivery. This means that, with a complete evaluation, you’ll be able to identify failures in your workflow, discovering where there’s waste in terms of time and effort.

Another point is observing the origin of these errors. Do your employees have the proper training? Do the materials used meet the public’s expectations? Are there bureaucratic processes that are holding up sales? Everything can and should be evaluated in quality management to avoid the accumulation of small losses. Thus, you can reduce your gross production costs without losing sight of quality.

Optimizing and automating manual labor

Optimization has already been mentioned as a highly relevant factor in terms of increasing a product’s profit margin. However, there’s another aspect involved: automation. Every extra minute or hour that an employee spends filling in a spreadsheet, is time that could be used to talk with another customer or resolve problems that require human action.

In addition, this way of operating leaves you with widely dispersed information, which hinders data analysis. With an automated system of data management, this process will be much faster and accurate, allowing you to make better informed decisions in less time.

Using quality management to offer benefits to your customers

A common mistake in some sectors is to lose sight of your customers and focus just on a closed process. This is such a serious error that it can lead companies to bankruptcy, depending on the conditions. The decisions taken by management should favor the most organic functioning of the company, especially if it’s necessary to integrate several offices. But we also can’t forget that the one who covers the costs is always the customer.

One way a quality management system can keep the company close to its customer base is to use opinion surveys. This can be done in several ways: from small post-sale questionnaires to longer conversations. This second method may be more appropriate for companies that intend on keeping up with their customers over longer time periods. With this feedback, management can find problems that can’t be identified by those who are too close to the production process.

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