Page 41 - Design for Six Sigma a Roadmap for Product Development

Quality Concepts 19

because other critical factors for business success, such as cost, profit,
time to market, and capital acquisition, are also related to other
aspects of business operation. The key difference between Six Sigma
and all other previously developed quality systems and methods, such
as TQM, is that Six Sigma is a strategy for the whole quality, which is
the drastic improvement for the whole business operation.
We will show that improving whole quality will lead to business
excellence, because improving whole quality means improving all
major performance metrics of business excellence, such as profit, cost,
and time to market.

1.4.2 Quality and cost
Low cost is directly related to high profitability. Cost can be roughly
divided into two parts: life-cycle costs related to all products and/or
services offered by the company and the cost of running the support-
ing functions within the company, such as various noncore operations-
related departments. For a particular product or service, life-cycle cost
includes production/service cost, plus the cost for product/service
development.
The relationship between quality and cost is rather complex; the
term quality here refers to the product/service quality, not the whole
quality. This relationship is very dependent on what kind of quality
strategy is adopted by a particular company. If a company adopted a
quality strategy heavily focused on the downstream of the product/
service life cycle, such as firefighting, rework, and error corrections,
then that quality will be very costly. If a company adopted a strategy
emphasizing upstream improvement and problem prevention, then
improving quality could actually reduce the life-cycle cost because there
will be less rework, less recall, less firefighting, and therefore, less prod-
uct development cost. In the manufacturing-based company, it may also
mean less scrap, higher throughput, and higher productivity.
If we define quality as the whole quality, then the higher whole quality
will definitely mean lower cost. Because whole quality means higher per-
formance levels of all aspects of business operation, it means high perfor-
mance of all supporting functions, high performance of the production
system, less waste, and higher efficiency. Therefore, it will definitely
reduce business operation cost, production cost, and service cost.

1.4.3 Quality and time to market
Time to market is the speed in introducing new or improved products
and services to the marketplace. It is a very important measure for
marketplace competitiveness. For two companies that provide similar
product/services with comparable functions and price, the one with a