They damage company image, customer loyalty, growth and competitive advantages. People in Argentine, Turkey and/or China can learn bad news at the same time. The result is destructive!
Power of social media!
Now we know that a big corporate recalls their products from 55 countries. What are the reasons for this big failure and huge product recalls?
I have published an article about quality failures, reasons and how we can prevent them on January 8, 2016 at Linkedin. I publish this article again.
Leaders ask the reasons of quality failures and product recalls
Some leaders are asking the reasons of the quality failures, product recalls and inefficiency at their manufacturing operations.
They ask me how they will prevent quality problems and increase the efficiency.
You know that some big corporations also have similar issues and we learn from the social media. They are unhappy due to financial losses, unhappy customers and decreasing market share. They know that if such issues continue it can damage their company's image and may contribute to the business failure.
Crucial Importance of Experience, Know-How and Skills in Leaders and People
I have worked 30 years in the pharmaceutical and agri-food industries, I know that people's quality is crucial to prevent such failures.
I like Steve Jobs and his well-known quote;
“Innovation has nothing to do with how many R & D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R & D. It’s not about money. It’s about the people you have, how you’re led and how much you get it”.
Many leaders think that they developed and implemented best systems and there will not be any possibility to have product failures in the factory or in the market. Their nose is in the air!. This is poor leadership. They forget human factor!
There are a lot of reasons for these issues.
1- Raw material quality.
They don’t analyse. They trust in the supplier’s results.
Suppliers don’t analyse due to the increasing pressure of the cost and trust to their systems.
They analyse and make a mistake in the analyses.
They analyse the raw material at the external laboratory and the result is a false positive.
2- Damaged products in the line.
People don’t inspect what they produce. Damaged products go the market.
3- Not considering regulatory rules.
They approve raw materials, bulk products and/or finished products that are not conforming regulatory limits. Leaders apply pressure for approving the products to make cost saving.
4- Using poor quality products.
Using quality defected products in the new productions creates quality failures in the final product during shelf life. Customers can purchase such products and detect quality defects. This situation contributes to the customer dissatisfaction and losses in the market share. These poor quality products can also be detected by authorities and shared with the social media and public.
5- Working with the unskilled people.
Unskilled people can not see the quality defects, failures and possible results.
6- Working with the disengaged people.
Disengaged people may not care the quality limits and send the products to the market without informing the upper levels.
7- Removing great skilled people from the organization.
This situation creates a great loss in knowledge, experience and skills and can create cost increases and decreases in customer loyalty. Poor leaders aim to increase the cost saving and don’t calculate the results in the future.
8- Poor morale and motivation in the workplace due to the poor leaders and managers.
9- Poor HR management and high turnover .
10- Using old technology in the operations.
11- Clubs, clans, internal politics and toxic culture in the organization.
12- Poor leadership in the supply chain, quality, operations and/or senior management.
13- Poor warehousing, transport and retail management.
14- Poor organizational alignment, agility and operational excellence.
15- Poor training, development and rewarding policies.
16- Poor cooperation and communication with external bodies.
17- Wrong applications of operational processes by people due to poor experience, knowledge and skills.
18- Weak manpower.
The number people are important to create quality and efficiency in the operations. If the number of people are less, this will create problems such as low productivity, high cost, health and safety issues, disengagement, low morale and motivation and quality problems in the operations.
19- No standing on the field operations, suppliers, warehousing, production line, quality department and study the process. Poor inspection and improvement. Staying on the table!
20- Poor analyzing the facility.
21- There is no feasible targets.
22- Poor vision sharing and poor commitment to the business goal.
23- Poor candor effect in the organization. False feedback to the upper levels.
24- Poor commitment of leaders to sustainable improvement in quality performance, customer satisfaction and regulatory compliance.
25- Failures in optimizing the quality and compliance management systems due to the unqualified quality and/or senior leaders.
26- Poor benchmarking and competitive intelligence.
27- Poor efficiency, productivity and competitiveness.
28- High trust to the systems and neglecting the people’s experience, knowledge and skills. Noses are in the air!
Of course, we can increase the number of reasons in quality failures in the companies.
- Companies have to work with the well experienced leaders who have excellent knowledge and skills in quality, compliance, supply chain, operations and other fields.
- They have to improve their HR system. Poor HR people can create destructive results to the companies in the long-term.
- They have to create a candor effect in the organization, recognize and respect the people.
- They have to be transparent and share effectively the company vision and strategies with the people.
- They have to apply long-term innovation management strategies.
- They have to train, develop and reward the right skills.
- They have to remove poor skills, toxic leaders and people from the organization.
- They have to make a truly effective risk analyses starting from the field to the market.
- They have to invest in innovation management and new technologies to increase quality, efficiency and productivity.
- If they don’t have the opportunity to manage supply, quality and compliance management in excellence, they have to hire well experienced experts from outside.
- Companies should make benchmarking, competitive intelligence and customer surveys to improve their products and services.
- They have to create more transient competitive advantages that regard the customer needs.
- They have to improve skills by training, investment in equipment and better management of staff to prevent product recalls.
- They have to have a great respect for the environment, people and regulations.
We are living in a complex, uncertain, hypercompetitive, global and digital world. Please note that the increasing complexity of regulations creates a pressure on business. Therefore, quality is a source of competitive advantage. It helps companies to reduce costs and improve their brand perception and creates high revenues in the long-term.
I have to say that working with the right leaders, applying effective talent management, training the people and making an investment in the new technology can create a cost in the short term, but this will create high productivity, no product recalls, low cost and great customer loyalty in the long-term.
If they don’t consider above requirements, show an inability to take appropriate action, they can damage their business in the future and its cost can be destructive due to the power of Social Media!
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Yusuf Tokdemir is a business advisor, entrepreneur, innovation consultant, growth strategist, keynote speaker, founder of Chocolat Garden and Innovation Turkey. He has a proven track record of success in multi-industry.
He is open to opportunities.
Innovation Turkey is an Innovation Management Consulting and People Development Company. It collaborates with the companies for people and leadership development, new product design, new service design, new business design and organizes seminars and workshops on innovation management and productivity to achieve competitive commercial outcomes. Contact Yusuf Tokdemir through Linkedin or email him directly firstname.lastname@example.org
Chocolat Garden is an artisan chocolatier that produces highest quality handcrafted fresh chocolates for chocolate lovers. Now Chocolat Garden Turkey is looking for cooperation, investment and partnership opportunities and will give franchise.