The "Build Quality" Debate

I've been to the Arnott's plant. I'd say it's not so much a change in recipe, but the way it's made. Where I work we make a product that is made with ancient equipment really slowly (our company used to be owned by a Japanese parent company). We're currently upgrading this equipment to new stuff to make it run faster and more efficiently but it does change the consistency of the product a little. So despite no recipe changes, a modification to the machinery and the quality is different. So I suppose, tying that into this conversation, the technology available at the time of manufacture can also directly impact quality.

I like our products better when made the old way but I know the difference from my own experience first hand. I get why we're moving away from it though, inefficient and expensive.

 

I think there's a difference between the perception of poor quality and actual poor quality. It takes time and consistency to demonstrate superior quality and build the market trust. The Japanese have done this - but whether they are taking it for granted or not now, I can't really comment. There are a lot of vehicle recalls in Japan recently... is this because they're outsourcing the manufacture of their components more often these days? Hard to measure, but something to think about.

I'm not sure I agree with the first statement, it's really not that simple. I would say production efficiency probably doesn't have a direct impact on product quality, but the causes of inefficient production can.

Production speed only impacts product quality when the quality control systems are incorrectly designed for that speed. If the quality control system is good, the product should also be good - but they should develop together. Poor quality can come at either high or low speed with a quality control system that is incorrect or insufficient.

As for the logic, it's not that complex. High efficiency = lower MCC's (manufacturing conversion costs) which results in higher MAC levels (margins after conversion). You essentially want to maintain the highest efficiency possible for the equipment for as long as possible. Speed does not necessarily equal efficiency though. It will help it to a point, but then efficiency will start to degrade as you exceed the machine's capability/design limitations.

So when you're trying to run a business AND sell product at a competitive price, it is in your best interest to maximize efficiency (at the best calculated speeds) where possible. If you didn't, you'd have to pump out much higher volumes to make your money and if it's not a product that sells in such large volumes - you won't be able to sustain business.