Achieving process excellence create value for both customers and the business in return. It does so by focusing on two outcomes:
1. Product or service quality (process effectiveness), and
2. Process efficiency
“Providing the quality that the customer asks for as efficiently as
possible, it stands to reason that value is created for all stakeholders. The secret
lies in providing appropriate quality consistently” - Pietro Pazzi.
It should go without saying that the product and service quality requirements are set by the customer. To prosper, the business must provide products or services that meet these stated requirements.
"When inferior quality is provided, the customer will simply go away."
Higher than appropriate quality and the customer is likely to keep
buying. However this means that the business is incurring unnecessary high
quality costs. That is, wasted effort leaves money on the table. Worst case is
that too high quality cost could result in the business becoming price
uncompetitive, resulting in exactly the opposite of what the business intended.
Process efficiency is under the control of the business.
The basis of business is to determine and manages processes that creates value for all.
Improving process efficiency is key to achieve process excellence.
While quality standards are set and periodically verified, process efficiency is about productivity and cost management and requires continuous improvement to remain competitive.
Where the gap is largest between the cost of quality and the price the customer is willing to pay (i.e. customer perceived value), is the “sweet spot” for generating maximum value for all stakeholders.
Achieving process excellence thus means maximum value for the business and its customers.