Quality control is typically found at the end of a process: After a customer has been served, after a product has been made. It is much the same with inspection in public services, it occurs after the event.
While it is important to know what is failing, repairing problems after the event means two types of additional cost: the cost of doing it wrong and the cost of repair. With respect to inspection of public services we often find a third cost: the operational cost of compliance with bad ideas, things that make services worse and costs high.
Managers can often exacerbate the situation when they react to something that has gone wrong assuming it to be likely to happen again, when in fact that is not likely. Behaving this way (‘fixing’ things, but making things worse) adds complexity to systems, again, driving costs up.
The costs of quality control are many and include the following:
Management time spent fire-fighting
People’s time spent inspecting and checking
Exceeding requirements (for example, putting extras into deliveries or service just to ‘make sure’)
Duplication (‘we don’t trust them to do it correctly, so we’ll check it through/do it again ourselves’)
Lost opportunity (customers who leave you or affect the view of prospective customers by negative word-of-mouth)
There has been abundant research to show that manufacturing organisations can realise 20-25% of their revenue if they get rid of all such costs. In service organisations, this figure is 30-40% of revenue. In many cases it is higher. What’s more, these measures exclude lost opportunity costs, for example the value of customer loyalty and word-of-mouth advertising.
The only way to get after the costs is to focus on prevention rather than inspection. While problems exist at the end of a process, their causes are further back. In fact, problems escalate as they go through processes; what started out as poor only gets worse.