Quality

• Quality of a product


  Meets the needs and expectations of the customer
• How to judge quality

  1. Design (looks, style, features)

  2. Functionality (does the job well)

  3. Price/value for money

  4. Reliability (acceptable level of breakdowns/failure)

  5. Consistency (produces meet the same quality standards time and time again)

  6. Durability (lasts as long as it should)

  7. Good after sales service
• Consequences of quality issues

  -Loss of customers, as customers are dissatisfied with the product and will not return

  -Reputation of the business goes down; difficult to attract new customers

  -cost of recalling, scrapping or re-making products that are not up to the required standard or are faulty

  -cost of replacements or refunds

  -costs of reducing the price of products that no-one wants to buy

  -legal action might be taken against the business
• what is monopoly?

  when one company dominates the industry
• Quality control

  Traditional method in manufacturing. All or a sample of products are checked at the end of the production process
• Quality control process

  All or a sample of products are checked at the end of production
• Advantages of quality control

  • Ensures the standard of the product
  • Customers will not receive a substandard product (depending on whether 100% or a sample of products are checked)
• Total Quality Management (TQM)

  QC (Quality Control) + QA (Quality Assurance)
• Advantages of TQM

  • Quality is embedded into the organisation resulting in fewer defects
  • Average unit costs are reduced leading to increased efficiency
  • Improved motivation for employees, as they are accountable for quality
  • Better relationships between employees and management, leading to a possible increase in productivity
• quality control

  checking at the end of the production process
• quality assurance 


  continuously checking for any defects or faults
• Benefits of maintaining quality

  -increased customer loyalty leading to additional sales

  -may be possible to charge a higher price
• Costs of maintaining quality

  -Costs of maintaining consistent levels of quality e.g. quality inspectors if quality control measures are introduced —costs of training to implement and maintain TQM. -costs of time used for quality circle meetings
• Examples of Franchise businesses

  • McDonalds
  • Subway
  • Pizza Hut
• Ways of checking quality

  1. At the end (Quality control)

  2. All the time (Quality Assurance)
• TQM (Total Quality Management)


  Employees check quality and have a target of zero defects, responsible for quality
• Benefits of TQM

  • Average unit costs reduced, as there is less wastage and re-working of faulty produces, which makes the business more efficient
  • Helps improve worker's motivation, as workers have more ownership and recognition for their work
  • With all staff responsible for quality, this can help the firm gain marketing advantages arising from its consistent level of quality