Plug The Leaks In Your Cash Flow

The High Cost of Low Quality

The January 10, 2005, BusinessWeek cites Howard Pien, CEO of Chiron, the maker of flu vaccine as one of the worst managers. As "one of only two major flu vaccine providers" it was prohibited from distributing its vaccine when "British regulators suspended its license in October citing contamination problems."

Estimated hit to revenues in 2004: $300 million, reducing earnings to $78.5 million, less than half of 2003 earnings. "Now critics wonder if Pien dropped the ball on quality." I doubt if the CEO directly dropped the ball, but more than likely did it by subtle messages about quality and its value to the bottom line.

Don't let the high cost of low quality spring a leak in your cash flow. Make quality a priority before the government or your customers do it for you.

Jay Arthur, The KnowWare Man, works with operational managers who want to plug the leaks in their cash flow. He is the author of the Small Business Guerrilla Guide to Six Sigma and Six Sigma Simplified.
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Top 10 Ways You Know You Need to Plug the Leaks in Your Cash Flow
10. Customers tell you to take your product, fold it five ways and put it where the moon don't shine.
9. The end of your production line has more scrap than a New Jersey dump.
8. The media casually refer to you as Mistakes-R-Us
7. Daily operations has all the earmarks of a five-alarm fire:
   -    Heroics
   -    People getting burned
   -    Customer service is afraid to answer the phone for fear that they might get hosed
   -    Dalmations get promoted because they've been to all of the fires.
6. Customer orders are filled at half the speed of escargot.
5. Your software has more bugs than a roach motel.
4. Root cause teams create whalebone diagrams.
    Your two main root causes are FUBAR and SNAFU.
3. Your invoices have more inaccuracies than a butterfly ballot.
2. Gage R&R is something your measurement tools do when they're overworked.
1. You think the House of Quality is a strip joint on Bourbon Street.

posted by Jay Arthur @ 7:12 AM