In December of 1980, Roger Milliken assembled 267 of his managers (Milliken and Company has been in his family since 1865) to hear Philip Crosby speak. Crosby, a popular management expert and the author of Quality Is Free, echoed the position of Deming and Juran that “management is the problem,” but the statement that really riled people up was “the cost of quality at your company, if it’s like most, is 18 to 22% of your revenues.”

One senior manager rose and shook his finger at Crosby as he asserted that there was no way his division’s COQ was that high. (Cost of quality is the total cost of ensuring good quality and rectifying poor quality and includes prevention costs, appraisal costs, internal failure costs, and external failure costs.)

After the meeting, Milliken formed a task force to determine the company’s actual cost of quality and sure enough, Crosby was wrong. It wasn’t 18 to 22%; it was 26%.

Do you know what your cost of quality is? You can estimate by applying Milliken’s rate to your organization. How much is one-fourth of your annual revenue?

You can find a quick guide to calculating your cost of quality at bexcellence.org. Don’t be thrown off by references to business and manufacturing; you can adapt the categories and examples of costs to any organization.

Milliken was one of the first companies to receive the Baldrige Award in 1989. It has continued to improve. It’s the only textile company in Europe that has been admitted to the British Standards Institute for Excellence in Quality. It’s one of the only U.S. companies to achieve both the Baldrige Award and the Japan Institute of Plant Maintenance TPM Excellence Award. It received the Textile Industries 2001 Innovation Award. It has also received the European Quality Award and the Canadian Quality Award.

Milliken has been named to Fortune’s “100 Best Companies to Work For” list five straight years and to Ethisphere Institute’s World’s Most Ethical Companies list three consecutive years.

Its commitment to quality is captured in its Quality Policy:

Milliken & Company is dedicated to the continuous improvement of all products and services through the total involvement of all associates.

All associates are committed to the development and strengthening of partnerships with our external and internal customers and suppliers.

We will continually strive to provide innovative, better and better quality products and services to enhance our customers continued long-term profitable growth by understanding and exceeding their requirements and anticipating their future expectations.

To read more about quality, click on these articles:

• We Are All Idiots
• 5 Powerful Process Questions
• Lean and Baldrige
• Process Management: DMAIC for Everyone
• Making Performance Excellence Personal

(7 votes, average: 4.29 out of 5)

 Loading ...