Quality and Value

What do “Quality” and “Value” mean to your organization? And what is the relationship of the two?

Hypothesis: the Toyota Production System and Total Quality Management saw “Quality” and “Value” as similar.

In Japanese, the word “quality” is “Hinsitu.” 【品質】The first symbol represents a product or grade. The second symbol is the interesting one. The upper part of the symbol is the two shapes representing weight 【斤】. The bottom part is the shape of the shell. The shell was used almost as currency in ancient times, representing value. This symbol shows a balanced condition of two weights and their values. Because of this, this symbol is used as a Pawn. But as we started to use it as part of quality, this symbol alone started to represent quality. For example, Kaoru Ishikawa will say “quality of work.” In such cases, he will only use the “situ【質】”　of work, excluding the first symbol. Somehow, the Japanese have been using a symbol that touches on quality and value.

The close relationships of quality and value aren’t only for the Japanese. “Quality Is Value To Some Person.” Quote by G. M. Weinberg. He continues the quote by stating, “By "value," I mean, "What are people willing to pay (do) to have their requirements met.” His quote clearly links quality and value.

Most of us will use quality and value without clearly defining the relationship. The tragedy happens when someone starts acting like the two have no relationship.

A factory had several work standards. Quality sets the standards, and engineering creates something else. The paperwork contained many duplications and contradictions. The Genba were unsure which to follow, so they devised something independently. When problems happen, they all blame each other.

A factory had quality problems. The quality team devised solutions, including buying a new machine and adding more inspections, which increased the cost. But does the value increase? The quality team will say that the solutions are necessary to meet the requirement. However, the customer’s willingness to pay doesn't change because they already have a competitor who provides value without the additional cost. “Meeting the requirements or quality” is not whatever it takes. If so, we don’t need to improve the process. We are always in competition.

A corporate value analysis was conducted, but the quality of service was destroyed. We often encounter situations such as air travel, restaurants, online shopping, etc. Value is not the fancy presentation in a room. It is linked with the quality of experience that a customer has. But when analysis is made without the link, the mistakes happen.

Kaizen is the activity we need to have quality and value to be on the same page.

An example of that is “Kanban.”

There is a saying in Japan that “Kanban should be treated as money inside a plant.” This is because we want the people to treat Kanban with as much respect as money. At the same time, one of the six rules of Kanban is “100% good quality.” Combined, the rules connect quality and value. Gresham's Law, “bad money drives out good money,” comes into play when we do not make this connection. As bad quality is in Kanban, we need to issue more Kanban. As Kanban inflation happens, the quality of work goes down. “We don’t need to produce according to Kanban,” or “We don’t need to deliver as Kanban says.” Overproduction becomes routine, and visibility dies. Kanban ends because we do not respect its value. To preserve the value of Kanban, we need quality assurance from the beginning of the implementation. Significantly, few quality functions are involved in the Kanban system, if any.

Note that this does not mean quality and value are always in harmony. The best debate on TPS happens when the quality and value conflict. However, the rule of such conflict in TPS is that this must be resolved on the Genba with the Genbutu. The conflict should not be the exchange of words but a direct observation and experimentation of the process.

Keep the quality and value close to each other. Don’t let the fancy organization chart separate the two.