How can quality be managed in times when human resource is not cheap and market dynamics are changing at a much faster rate

Of all the definitions of quality, the most accepted is the degree to which something meets or exceeds the expectations of its consumers. The definition is fine, but this is from customers' perspective. How do we define it from manufacturers' perspective? Quality can be defined as conformance to specifications. The degree to which a product meets the design specifications or a product free from deficiency can be called a quality product. These definitions are incomplete; it is like defining a product as sum of its specifications and/or possible defects.

Quality is like health. We don't define health as absence of diseases. It is about complete well-being. It is about perfect harmony among body, mind and soul. Similarly, quality is not about absence of deficiency; rather it is the measure of how well all the stakeholders have collaborated to create the product. Create means everything from design to delivery. This change in definition changes all.

As we are assuming quality as sum of specifications or absence of defects, we have reduced quality to a list of specifications and defects. Consequently, the manufacturers mould their processes to meet the specification and avoid the defects. We started having check points to weed out defects at every stage of production or control the process so that the defects or deviations can be minimised. Hence, we had huge quality manuals. A buyer or brand having the most detailed manual was perceived as the most quality-conscious buyer. Is there anything wrong in having a detailed manual and following specifications? Absolutely not! But quality is not limited to this and following the manual itself may not lead to the desired quality.

We are discussing here how we need to mould ourselves to respond to this dynamic market. Before I come to this point, we need to understand how we reached where we are on apparel quality management and how something that was considered an acceptable way of managing quality suddenly seems obsolete and dysfunctional.

Market dynamics is changing rapidly. It was only brick and mortar (B&M) for the last 100 years. Online commerce knocked our door 10 years back and now focus is on omni-channel retail. If we keep B&M stores in mind, then quality control measures comprising testing for performance and a four-point system for fabric and acceptable quality limit (AQL) for process and final inspection are enough. Theoretically, 2.5 per cent of defective pieces (assuming AQL 2.5) in a lot was acceptable. The customer used to touch, feel and try the product prior to making a purchase decision. Hence returns were less. And 2.5 per cent of defective items were factored in the costing. This continued for long. But now with the advent of online commerce, we have seen that customer returns is to the tune of 20 per cent. High customer return is the single largest worry when it comes to online business. Logistics goes for a toss. The returned garment needs to be refurnished, repacked and made ready for sell. If the return is due to quality defect, then the impact on cost is even more. Now the cost of quality is much more on retailers--cost not only in terms of money, but in terms of loss of a prospective customer, loss of credibility and loss of market value.

The apparel quality management practices followed by all major brands and retailers in India are adaptation of quality assessment (QA) manuals circulated by international brands with minor changes here and there. The manuals have been a tool to remotely control quality. The brands were in developed countries and manufactures were in the Third World. Human resource was considered cheap in these countries; hence the manuals were loaded with inspections and audits at different stages of production. I once visited a production floor in Bangladesh where there was a check point after every operation. Is this a logical way of working? Unfortunately, a diluted version of this routine is still considered an acceptable way of managing quality.

So the big question is how should we manage quality when human resource is not that cheap and market dynamics is changing at a much faster pace? At this point, I will take you back to the proposed definition of quality. Of all stakeholders, I will focus on manufacturers. I have also explained earlier that current quality control tools are only able to help us up to some extent. So what can be a holistic approach to manage quality?

I propose new parameters that brands need to invest in to ensure sustainable quality. Although these parameters may not seem linked directly to quality control the way we know it, but these will go a long way in assuring sustainable quality.

These are: (1) Reduce Throughput time. (2) Invest in people. (3) Develop a culture of right first time (RTF). (4) Ensure profitability of manufacturer. Collectively we can call them RIDE.

•  Reduction in throughput time: Throughput time is the most important parameter defined famously by Eliyahu M Goldratt, a business consultant known for his theory of constraints, and author Jeff Cox in their novel The Goal.  Simply put, throughput time is the time between investments to payment realisation. The lesser it is, the better. Managing throughput time eventually leads to effective understanding of the project evaluation and review technique or the critical path method (PERT/CPM) for planning, productivity, work-in-progress (WIP) management and cutting down on non-value-added activities. These activities are directly or indirectly related to product quality. As this is a major indicator of performance, it is directly related to profitability as well.

For a brand, throughput time of its manufacturer should be a major consideration as this would lead to delivery on time, which is critical to any retailer. It is important to understand that good throughput time results in on-time delivery. At the same time, on-time delivery may not necessarily mean that throughput time is appropriate. Hence, we need to work with manufacturers on improving their average throughput time and not merely on on-time delivery. We all know what all tactics a factory may employ to meet delivery date. From unauthorised sub-contracting to skipping a few major processes, which eventually becomes a major quality concern. So focusing on reducing throughput time has no alternative.

•   Investment in human resource: Quality has a close connection with the personnel in any factory. A committed human resource pool is important. I believe commitment and a sense of belongingness of a worker is more important than the skills he possesses. But where will this commitment come from? The commitment is always reciprocal. A worker is as committed to the organisation as the latter is to the former. Merely paying wages on time will not lead to commitment.  A committed organisation thinks about workers' well-being, be it their health or workplace safety, which is mostly covered in our social compliance manual. But what is not covered is equally important. Workers need to be trained and educated. They require awareness and learning sessions on relationship management, personal finance and importance of education for their children. This will go a long way in making them committed to the organisation.

Just providing conveyance, shared accommodation and wages on time is not enough. How can we ensure commitment from a worker who is working on piece rate, has his family in some remote village and stays in a dormitory with 10 others in unhygienic conditions? Think of his commitment vis a vis a worker living with his family who can think of long-term association with the organisation, and who would value social security covers offered by the government through the organisation. This was just to explain how commitment is better when quality of life seems better. I am not expecting a manufacturer to provide all this to gain commitment. All I am saying that it helps when we probe deeper and try to find what their aspirations are and help him fulfill that. The commitment becomes much stronger and long-term in that case. A satisfied and committed workforce results in less absenteeism, less employee turnover and better concentration that is directly related to quality.

•   Develop right first time (RFT) culture: I would like to put all quality assurance (QA) measures under this heading, be it raw material quality control, testing for performance and audits and inspections at different stages of production. The factory needs to review this as per its requirement. It is important to ensure that all aspects are covered, and at the same time, it is equally important that there is no duplication.

•  Ensure profitability and business continuity:  Profitability and business continuity are not a measure of performance but an outcome of the previous three broad points. Still I am discussing it separately as I believe that business continuity and profitability need to be the responsibility of the brand or retailer. It cannot afford to be indifferent to manufacturers' profitability. If the manufacturer is not profitable and there is no assurance of business continuity, it will adversely affect the quality for sure. A brand needs to walk the extra mile to ensure this. It cannot just convince a manufacturer for a rock bottom price for any style and hail it as a breakthrough. This is not sustainable and anything that is not sustainable will not lead to quality. If there are price constraints, then the brand needs to go deeper, help the manufacturer control its cost, enhance its efficiency and ensure that the manufacturer makes profit even at that constrained price.  Business continuity helps the manufacturer retain its resources, resulting in quality and reduced costs.

Now a question arises about role of QA personnel of a retailer. The role, no doubt, would be more prominent than what it is today. But they are required to be re-skilled. They need to be trained in PERT/CPM, defining performance indicator for a department/unit, production management/industrial engineering, optimising cost and social issues impacting workers. Only then they can help the factory on all the aspects discussed above.

Quality is affected by almost everything that goes into creating a product and making it available to customers. It is time we look holistically into it. It necessitates vision, knowledge, empathy and awareness. We should be able to build an ecosystem comprising all stakeholders and every individual associated with it that can deliver quality independent of changing market dynamics. I am sure 'RIDE' would help us all tide over all the challenges arising out of market dynamics.