Good point that engineers have to analyze the data and facts. Often I think that upper management wants to believe what the data could look like rather than what the data actually is. When it comes to a low cost supplier, the data will likely show you that the low cost comes with excessive scrap or larger tolerances.
It's often beneficial to quantify service calls or scrap or other quality issues as a per unit cost added to the total cost. This can help quantify what value in a way the others can quantify.
I think Ann hit the nail on the head when she mentioned belief.
It seems that the higher up in management a person is, the more their decisions are driven by belief, rather than analysis of facts. To a certain extent this is inevitable. If a person has to make a large number of decisions, they won't always have time to analyze the facts in detail, and will have to rely on gut feelings (or intuitions, or biases).
Technical specialists like engineers, on the other hand, are paid to analyze facts in detail. This is not to downplay the role which intuition plays in design, but at the end of the day, every design decision needs to have a solid technical justification. This is why we are so often frustrated when dealing with management -- we simply operate on a completely different level.
Some managers will adjust their beliefs when presented with facts. Others will ignore facts which don't align with their beliefs. They may even become angry when confronted with the fact that their beliefs aren't supported by the facts.
Based on experience, I'd say that the second kind of manager is much more common than the first kind.
I bet we could add several things to that list: excessive energy consumption, poor quality, wasteful practices, environmentally harmful materials, 14-hour-day sweatshop conditions. It is kind of amazing what can be ignored until it becomes somehow critical.
I think a lot of this happens simply because it's easier to keep doing the same thing than it is to change. A good example was the huge waste of energy at plants before energy prices rose to a high enough level to pay attention to. Many plants -- perhaps most -- were surprised by the savings that were available once savings became a priority. Until someone said "Let's pay attention to this," nobody paid attention.
Dave, I agree that poor quality means lost profits in the long run. But that's clearly not what employers who act like this believe, or else perhaps they don't realize that such practices will lead to profit loss. And actually, that's what I did hear again and again--that managers had to be shown, in detail, just how attention to quality would give an ROI, and exactly what kind and how much. Why that's so hard to grasp in the first place is beyond me.
This is a case where Keith Hudson demonstrates that you're damned if you do and you're damned if you don't. Getting dismissed for refusing to certify something which couldn't meet the spec kinda puts the chill into having to be the point person to step up and take responsibility.
@Ann: I would question the assumption that it's a matter of quality vs. profit. The cost of poor quality can be very high. Scrap is expensive. Sorting and reworking defective parts in your plant is expensive. If poor quality products make it out the door, warranty claims are expensive. And lawsuits and recalls can be extremely expensive. And a reputation for poor quality, once earned, can be difficult to overcome.
These things are all very simple to understand, and can be easily quantified. This does not mean, however, that they are necessarily understood by people in management.
For example, at the same company I mentioned in the previous comments, I found that the scrap rate on a certain casting was 30%. The castings were poured in Asia and machined in the U.S. When they were machined, they were found to have unacceptable levels of porosity. The supplier claimed that he was x-raying the castings 100%, a claim which we had a hard time believing given the amount of porosity we were finding. (Internally, we joked that maybe he really was x-raying them -- but then sending them on to us regardless of what he found). As a metallurgist, I spent several days going over the casting design with the supplier, and he ultimately agreed to make some changes to the mold setup -- which he promptly forgot about as soon as he got back to Asia. After doing nothing for several months -- other than continuing to send us bad parts -- he eventually made some different mold changes, which hadn't been agreed to, and which didn't help the problem.
The most frusturating thing, however, was the fact that management didn't really seem to think that 30% scrap was that big of a deal. There seemed to be a bit of cognitive dissonance about the fact that we were essentially throwing away an entire shift's worth of machine output every day, with all of the labor costs associated with that. The fact that we were wasting a third of our machine capacity at a time when our plant was deeply backlogged also seemed not to register. Neither did the fact that we were paying air-freight charges to get replacement castings -- or the fact a third of the replacement castings which we were paying air-freight charges for would also be bad! No matter what the actual costs involved, management was convinced that, because the parts came from Asia, they were "cheap."
For what it's worth, I don't believe that this supplier's behavior was at all representative of most suppliers in Asia. I have worked with many excellent Asian suppliers. If anything, the uncooperativeness of this supplier was a departure from cultural norms, and would probably be considered quite shocking. But, internally, the attitude of, "Well, what do you expect when you're working with Asia?" was a major impediment to getting the problem to be taken seriously. In my opinion, this attitude borders on racism.
My point is that the relationship between quality and profit is not inverse in nature. Companies can throw a lot of money away on low-quality products. But business decisions are not always based on a rational, quantitative analysis of the situation. Often, they are based on the prejudices and preconceptions of the decisionmakers.
These stories remind me of the ones engineers told me off the record back when I was reporting on TQM (total quality management) efforts. It was this sort of thing, and its clear emphasis on profits rather than quality, that the push to TQM was supposed to help solve, what with all the empowering downwards, etc., so people with responsibility would also have authority and accountability. Looks like the profit motive won out instead.
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