Quality
Quality means how well a product or service meets the expectations and requirements of customers.
A product is not necessarily high quality simply because it is expensive or has many features.
→ Quality = meeting customer expectations consistently.
Different Aspects of Quality
Customers may expect:
→ Reliable performance
→ Appropriate features
→ Durability
→ Safety
→ Attractive design
→ Consistent quality
→ Good customer service
→ Accurate delivery
→ Value for money
Example:
For a food-delivery business, customers may expect:
→ Fresh food → accurate order → hygienic packaging → reasonable delivery time.
If these expectations are consistently met, customers are more likely to consider the service high quality.
Importance of Quality
Customer Satisfaction
→ High quality → customer expectations met → greater satisfaction → repeat purchases.
Customer Loyalty
→ Consistent quality → customer trust → repeat purchases → stronger customer loyalty.
Reputation and Brand Image
→ Good quality → positive reviews and recommendations → stronger reputation → potentially higher demand.
Poor quality can have the opposite effect:
→ Poor quality → complaints/negative reviews → damaged reputation → lower demand.
Competitive Advantage
→ Higher or more consistent quality → differentiation from competitors → stronger competitive position.
Sales and Market Share
→ Improved quality → greater customer satisfaction → increased demand → potentially higher sales and market share.
Costs
Poor quality can create:
→ Defective products
→ Returns
→ Repairs
→ Refunds
→ Wasted materials
→ Reworking
→ Customer complaints
Therefore:
→ Poor quality → higher costs → lower profit.
However, improving quality can also increase costs because the business may need:
→ Better materials
→ More skilled employees
→ Quality testing
→ Better machinery
→ Training.
The business must therefore consider whether the benefits of higher quality justify the additional costs.
Quality Control
Quality control (QC) involves checking products or services to identify defects after or during production.
The focus is mainly on detecting problems.
Methods of Quality Control
→ Inspecting finished products
→ Checking samples from production
→ Testing products
→ Measuring products against specifications
→ Inspecting raw materials
→ Checking services against required standards
→ Removing defective products before they reach customers
Example:
A manufacturer checks 100 randomly selected products from a production batch. Defective products are identified and removed.
Impact of Quality Control
Potential benefits:
→ Defective products are identified
→ Fewer faulty products reach customers
→ Customer complaints may decrease
→ Product standards can be maintained
→ Problems can be identified before distribution
→ Customer confidence may increase.
Potential disadvantages:
→ Inspection and testing increase costs
→ Requires employees and equipment
→ Defects may only be discovered after resources have already been used
→ Some defective products may still reach customers
→ Large-scale inspection can slow production.
Quality Control Chain
→ Production → inspection/testing → identify defects → remove/rework defective products → acceptable products reach customers.
Quality Assurance
Quality assurance (QA) is a system of preventing quality problems by ensuring that processes are designed and carried out to meet required standards.
The focus is on preventing defects rather than simply detecting them.
Methods of Quality Assurance
→ Setting quality standards
→ Establishing production procedures
→ Employee training
→ Regular process monitoring
→ Supplier quality checks
→ Standard operating procedures
→ Quality certification
→ Auditing processes
→ Preventive maintenance of machinery
Example:
Instead of checking every finished product for errors, a manufacturer trains employees, uses standardised production procedures and regularly checks machinery to prevent defects from occurring.
Impact of Quality Assurance
Potential benefits:
→ Fewer defects
→ Less waste and rework
→ More consistent quality
→ Greater customer confidence
→ Improved reputation
→ Lower costs caused by faulty products
→ Greater employee awareness of quality.
Potential disadvantages:
→ Training costs
→ Establishing systems can be expensive
→ Employees may need additional time for quality procedures
→ Documentation and monitoring can increase administration
→ May slow processes initially.
Quality Assurance Chain
→ Set standards → establish procedures → train employees → monitor processes → prevent problems → consistent quality.
Quality Control vs Quality Assurance
| Quality Control | Quality Assurance |
|---|---|
| → Detects defects | → Prevents defects |
| → Mainly checks output | → Mainly focuses on processes |
| → Inspection and testing | → Standards and procedures |
| → Problem found after/during production | → Problem prevented before it occurs |
| → Responsibility often concentrated in quality-control staff | → Responsibility involves the wider organisation |
| → Can result in rework and waste | → Can reduce rework and waste |
Simple distinction:
→ Quality control = Find the problem.
→ Quality assurance = Prevent the problem.
Total Quality Management (TQM)
Total Quality Management (TQM) is an organisation-wide approach in which everyone in the business is responsible for continuously improving quality.
Quality is not treated as the responsibility of only a quality-control department.
Features of TQM
→ Customer focus
→ Everyone responsible for quality
→ Continuous improvement
→ Employee involvement
→ Teamwork
→ Prevention of defects
→ Supplier involvement
→ Use of quality data
→ Focus on processes as well as final products
→ Management commitment
Customer Focus
→ Identify customer expectations → design products/services to meet them → collect feedback → make improvements.
Employee Involvement
Employees are encouraged to:
→ Identify problems
→ Suggest improvements
→ Take responsibility for quality
→ Work in teams
→ Help improve processes.
Employees who work directly with production or customers may identify problems that managers do not see.
Continuous Improvement
TQM does not treat quality as something that is achieved once.
→ Measure performance → identify weaknesses → make improvements → measure again → continue improving.
Supplier Quality
TQM can extend to suppliers.
→ Set quality standards for suppliers → monitor materials → improve supplier relationships → reduce defective inputs → improve final product quality.
Impact of TQM on a Business
Potential Benefits
→ Fewer defects
→ Less waste
→ Lower rework costs
→ Better productivity
→ Greater customer satisfaction
→ Higher customer loyalty
→ Improved reputation
→ Stronger competitive advantage
→ Greater employee involvement
→ Continuous improvement
→ Potential long-term cost savings.
Example:
→ Employees identify repeated packaging errors → business changes the packaging process → fewer errors → less waste → fewer customer complaints → improved satisfaction.
Potential Limitations
→ Employee training can be expensive
→ Implementation takes time
→ Quality systems require investment
→ Employees may resist changes
→ Continuous monitoring requires resources
→ Results may take time to appear
→ Requires commitment from senior management and employees.
Quality Approaches and Business Impact
| Approach | Main focus | Potential impact |
|---|---|---|
| Quality control | → Detect defects | → Reduces faulty products reaching customers but can involve inspection and rework costs |
| Quality assurance | → Prevent defects | → More consistent processes and potentially less waste |
| TQM | → Everyone continuously improves quality | → Quality becomes part of the whole business culture |
Overall Quality Chain
→ Customer expectations → quality standards → quality assurance/prevention → quality control/checking → continuous improvement through TQM → fewer defects → greater customer satisfaction → stronger reputation → repeat purchases → improved competitiveness and potentially higher profit.