Quality management delivers £90 billion to the UK economy, claims new research

Trying to demonstrate to your leadership team the value of focusing on quality? Process professionals have long known that techniques like Six Sigma and Lean - which focus on improving quality and increasing efficiency – can achieve remarkable results in terms of reducing cost, increasing customer satisfaction, reducing variation, etc. But translating those benefits into cold, hard cash can be difficult.

Now, new research released last week by UK- based Centre for Economic and Business Research (Cebr) has quantified the benefits of adopting quality management approaches – both to an organization and to the economy as a whole.

The report, commissioned by the UK Chartered Quality Institute (CQI) and the Chartered Management Institute (CMI), calculates that for every £1 spend on a quality management programme, costs were reduced on average by £16 and revenues were increased by £6.

Overall, quality management practices contributed 6.0% of UK GDP or approximately £90 billion to the UK economy in 2011, claims the report. But that figure is not as high as it could be, Cebr concluded, arguing that if quality management programmes were adopted fully throughout the UK economy, an additional £52 billion could have been added to the country’s overall GDP and upwards of 500,000 jobs could have been created.

The report also has a well explained history of approaches to quality - beginning with early quality management efforts in the armament factories of World War I through to more modern approaches like Lean and Six Sigma - and an extensive listing of case studies.

Read the full report for yourself here: The contribution of quality management to the UK economy