2.4.4 Quality management

• Quality

  A product or service is of good quality if it meets the needs & expectations of the customer
• If a product or service doesn’t meet those needs then it is sub-standard
• What does quality look like to customers?

  • long-lasting, durable
  • reliable
  • worth its money
  • does what the description says
  • of a high standard
  • cost of ownership
  • exclusiveness
• Tangible measures of quality

  • reliability
  • functions & features
  • support levels & standards
  • cost of ownership
• Intangible measures of quality

  • Brand image
  • Exclusiveness
  • Market reputation
• Quality creates a competitive advantage against competitors
• Benefits of a business of having good quality

  • increased revenue, profit
  • competitive advantage
  • increased brand loyalty, customer loyalty
  • good brand image
  • repeat purchases, more sales
  • customer recommendation
  • lower marketing costs - due to customer recommendation
• Quality is not just about the product - it includes the whole customer experience;

  • buying process
  • product reliability
  • after-sales service
  • cost of ownership
• Examples of poor quality

  • product fails
  • product does not perform as promised
  • product is delivered late
  • poor instructions/directions for use
  • unresponsive customer service
• Costs of poor quality

  • loss of customers
  • cost of reworking or remaking product
  • costs of replacements or refunds
  • wasted materials
• Having poor quality is competitive disadvantage
• How might quality be measured?

  • customer service ratings
  • product returns
  • warranty claims
  • rejected output from production
  • levels of repeat business
  • market surveys
  • profit margins
• How poor quality could damage competitiveness

  • financial costs
  • lost customer loyalty
  • damaged business reputation
• Quality control

  based on inspection, take defects out
• Quality assurance

  based on processes, build quality in
• Problems with quality inspection

  • costly
  • often at the end of process - too late
  • inconsistent inspections
  • often not compatible with modern production systems
• Quality assurance

  • focuses on processes
  • achieved by improving production processes
  • targeted at the whole organisation
  • emphasises the customer
• Quality control

  • focus on outputs
  • achieved by sampling & checking
  • targeted at production activities
  • emphasises required standards
• TQM - Total Quality Management

  a management philosophy committed to focus on continuous improvements of production processes targeted and services with the involvement of the entire workforce
• Advantages of TQM

  • puts customers at heart of production process
  • motivational since workers feel more involved and are making decisions
  • less wasteful than throwing out defective finished goods
• Disadvantages of TQM

  • requires strong leadership
  • substantial investment in training & support
  • may become bureaucratic
  • disruption and costs may outweigh benefits
• Kaizen

  • a kind of quality assurance
  • based on concept/culture of continuous improvements
  • encourages employees to engage fully with finding ways to improve quality processes
  • eliminates waste