Quality

• Quality

  A measure of excellence which is free from defects or significant variations. A product or service whose features consistently allow it to satisfy customers
• What does the level of quality depend on?

  • How well customer needs have been defined (from market research)
  • How well the firm has designed the manufacturing process
  • How well designed the product is (e.g. USP)
• What are examples of intangible quality?

  • Image and brand
  • Reputation
  • Exclusiveness
• What are examples of tangible quality?

  • Appearance
  • Reliability
  • Durability
  • Functions (added extras)
  • After-sales service
  • Repair and maintenance needs
• Benefits of excellent quality

  • Impact on sales (demand rise)
  • Creating a USP
  • Impact on selling price ('perceived quality' charge higher)
  • Pricing flexibility
  • Cost reductions (less wastage)
  • Firm's reputation
• Chain of analysis

  • Higher prices -> costs reduced -> high profit margin -> lower unit cost
  • Motivated workforce -> produce quality products -> feel appreciated ->higher wages
  • Reputation -> products recognised -> people willing to pay -> maintain brand image -> resistance to economic conditions
• Quality control

  A system that uses inspections to check the quality of work at stages of the manufacturing process
• Pros of quality control

  • Quality checks at the end can stop faulty goods reaching customers
  • Inspectors can spot common problems and put them right
• Cons of quality control

  • Does not engage team responsibility
  • Expensive to operate
  • Responsibility rests with inspectors, staff takes no responsibility, reducing motivation
• What are the two types of quality management systems

  • Quality control
  • Quality assurance
• Quality assurance

  A system that improves quality by arranging every process to get products right first time
• Pros of quality assurance

  • Workers take responsibility
  • Motivates workforce
  • Reduce costs through less wastage
  • Greater consistency of quality products because responsbility is spread through entire workforce
• Cons of quality assurance

  • Needs a change in the culture of the organisation
  • Takes time to embed the system
  • Increase costs in the short term
• Total quality management (TQM)

  An approach to long-term success that aims for improvement continually throuhgout every functional area of a business

  It involves:

  • A culture of quality that involves all employees in a firm
  • 'Getting it right first time' is key
  • Reducing costs becaue of reduced wastage costs
  • A consistent and flexible approach to quality
  • Higher prices from reputation for quality
• Kaizen

  A policy of implementing small, incremental changes in order to achieve better quality and greater efficiency. This is a corporate culture which encourages employees to identify possible ways of improving the operations.
• Quality assurance systems

  Quality standards - BS5750 and ISO9001

  Set of criteria to establish quality systems which are accredited (British Standards & International) -> Achieving these means the business can gain marketing advantages - guaranteed customer assurance
• Consequences of poor quality

  • Reduce productivity (due to breakage etc.)
  • Lower profitability
  • Impact on customer satisfaction (complaints can easily reach a large audience nowadays)
  • Costs increase / decrease (decrease in the short term but long term effects are detrimental and expensive)