Front Line: The Unkindest Cut of All

March 1, 2009
You can make things fast, good or cheap, but you can't do all three at once.

Fast, good, cheap: Pick any two. You can make things fast, good or cheap, but you can’t do all three at once. It comes down to a choice: Which can you afford to sacrifice?

Every decision involves a compromise, and these days, functions that support competitive advantage must take priority. What distinguishes your operation from others? If it’s fast-moving inventory, invest in high-speed automation. If product quality makes you better than competitors, teach that to employees and invest in the best technologies.

In the past, speed and low labor costs were business advantages that helped serve consumers addicted to instant gratification and blue-light specials.

But those priorities are changing. According to a study released last month by the consumer research firm Brand Keys, the majority of consumers want value more than low prices, even as their wallets get smaller. So it’s back to the forgotten value proposition: Consumers want to know what they’re getting for their money.

Meanwhile, for businesses, the temptation to slash costs as the way to survival can be overwhelming. Anything that seems nonessential to the bottom line is going under the knife. It’s a natural—and desperate—self-preservation strategy.

So what’s on the chopping block these days? According to a recent study from the American Society for Quality (ASQ), 54% of its members are cutting jobs, 50% are slashing training, 33% are reducing budgets for quality processes and 28% are backing away from quality initiatives.

“Outright cancellation of either ongoing quality programs or planned introduction of new quality programs also is happening,” ASQ reported.

These are desperate measures that diminish value in the long run.

If you need evidence, consider the highly publicized peanut recall. According to media reports, Stewart Parnell, president of the bankrupt Peanut Corporation of America, told employees that quality measures were too expensive and time consuming.

Perhaps Parnell intentionally shipped product infected with salmonella. Or, it could have been simply a disastrous error. Either way, it puts quality at the top of the consumer agenda.

Senators moved quickly to propose a new bill, the FDA Food Safety Modernization Act, mandating better quality control in food distribution.

“Over the last year, we’ve seen major recalls of peanut butter spiked with salmonella, spinach laced with E. coli and chili loaded with botulism,” said Sen. Dick Durbin as he announced the bill.

You can’t buy that kind of publicity! And you wouldn’t want to.

According to the ASQ survey, some organizations are still forging ahead with quality initiatives, despite upfront costs. There’s a subtle shift, ASQ concluded, away from the traditional view of quality improvement as a bottom-line tactic to a more strategic vision of quality as a top-line, competitive advantage.

That vision may help those companies avoid the unkindest cut of all—one that seals their fate.

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