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ERP Journal Authors: Jason Bloomberg, Mat Mathews, Louis Nauges, Steve Mordue, Elizabeth White

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Cost of Quality: Defining the Value of Enterprise Quality Management

Best-in-Class Manufacturers Are Also Enjoying a Significantly Lower Cost of Quality, Totaling to a 19% Savings in Total Revenue

BOSTON, MA -- (Marketwire) -- 09/10/08 -- The latest benchmark report by Aberdeen Group, a Harte-Hanks Company (NYSE: HHS), "Cost of Quality: Defining the value of Enterprise Quality Management," has correlated specific business capabilities and technology enablers to Best-in-Class operational performance. For the purposes of this study, Aberdeen has evaluated and classified manufacturers based on three key performance indicators: Products in Compliance, First Pass Yield, and Complete and On-Time shipments. Best-in-Class manufacturers are defined as the top 20% of performers in a weighted average across the aforementioned three KPIs and results show that Best-in-Class performance is:

--  99% Products in Compliance
--  98% Complete and On Time Shipments
--  98% First Pass Yield
    

To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=5145.

Putting these findings in context, Matthew Littlefield, a Manufacturing Research Analyst with the Aberdeen Group, states, "Best-in-Class manufacturers are not only more likely to realize improved first pass yield, compliance and on time shipments as compared to other manufacturers, but even more importantly they are realizing these performance gains by investing less in the cost of quality as a percentage of revenue and hence enjoying a 19% savings in revenue. Specifically, Best-in-Class companies are enjoying 9% less revenue lost to internal failures, 6% less revenue lost to external failures, 2% less revenue lost to assurance costs, and 2% less revenue lost to prevention costs."

Based on the above findings and additional analysis found in the report, Littlefield adds the following recommendations to achieve Best-in-Class performance:

--  Establish strategies to improve visibility and control into quality
    processes across manufacturing operations and the supply chain

--  Measure the cost of quality. Doing so will help manufacturers quantify
    the benefit of investing resources in quality management

--  Implement an Enterprise-Wide Quality Management System and focus on
    creating real time interoperability with plant floor automation, MES, PLM,
    ERP, and SCM.
    

A complimentary copy of this report is made available due in part by the following underwriters: SAP, IBS and Sparta Systems. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=5145.

To access all of Aberdeen's complimentary research please visit http://research.aberdeen.com.

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

© 2008 AberdeenGroup, Inc., a Harte-Hanks Company
451 D Street, Suite 710
Boston, Massachusetts 02210-1928
Telephone: (617)854-5200
Fax: (617) 723-7897
www.aberdeen.com

Media Contact:
Matthew Littlefield
Aberdeen Harte-Hanks
(617) 854-5202
Matthew.Littlefield@aberdeen.com

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