Quality Business

Learning Objectives Explain the meaning and significance of quality Assess the various quality systems Discuss difference between quality assurance and quality control

Introduction Quality is one of the most important challenges facing a business Nearly all markets are becoming more competitive: Customers are more knowledgeable Customers are more demanding Customers are more prepared to complain about poor quality Customers can easily share information about poor quality (e.g. via email or internet discussion groups) If a business can develop a reputation for high quality, then it may be able to create an advantage over its competitors AS text p.288 p.298

What is Meant by Quality? Quality is about meeting the needs and expectations of customers Think about your needs and expectations as a customer when you buy a product or service. These may include Performance Appearance Availability Delivery Reliability Price If a product or service meets all those needs - then it passes the quality test. If it doesn't, then it is sub- standard. AS text p.288 p.298

Examples of Poor Quality Product fails – e.g. a breakdown or unexpected wear and tear Product does not perform as promised Product is delivered late Poor instructions/directions for use Customer service is hard to find (e.g. telephone not answered) Business employees appear rude or uninterested in the customer AS text p.288 p.298

Toyota Prius recall Activity In pairs, discuss why quality is important and identify as many reasons as you can. http://news.bbc.co. uk/1/hi/business/85 06179.stm http://news.bbc.co. uk/1/hi/8497471.stm AS text p.288 p.298

Costs of Poor Quality There are many costs of poor quality, including: Lost customers (expensive to replace – and they may tell other people about their bad experience) Cost of reworking or remaking product Costs of replacements or refunds Wasted materials Poor quality is a source of competitive disadvantage If competitors are achieving higher quality, then a business will suffer AS text p.288 p.298

Quality Management Quality assurance Quality control Producing products of the required quality does not happen by accident There has to be a production process which is properly managed Ensuring satisfactory quality is a vital part of the production process. Quality management is concerned with controlling activities with the aim of ensuring that products and services are fit for their purpose and meet the specifications There are two main parts to quality management Quality assurance Quality control AS text p.288 p.298

Quality Assurance Quality assurance is about how a business can design the way a product of service is produced or delivered to minimise the chances that output will be sub-standard The focus of quality assurance is, therefore on the product design/development stage Why focus on these stages? If the production process is well controlled - then quality will be "built-in“ If the production process is reliable - there is less need to inspect production output (quality control) AS text p.288 p.298

Quality control Inspection Testing Sampling. Quality control is the traditional way of managing quality Quality control is concerned with checking and reviewing work that has already been done For example, quality control includes: Inspection Testing Sampling. Quality control is mainly about "detecting" defective output - rather than preventing it Quality control can also be a very expensive process. Hence, in recent years, businesses have focused on quality management and quality assurance. AS text p.288 p.298

Total Quality Management (“TQM”) TQM is essentially an “attitude” Whole business understands need for quality and seeks to achieve it Everyone in workforce s concerned with quality at every stage of production process Quality is checked by workers and not inspectors AS text p.288 p.298

Advantages of TQM Puts customer at heart of production process Motivational since workers feel more involved and are making decisions Less wasteful than throwing out defective finished products Eliminates cost of inspection AS text p.288 p.298

Continuous Improvement Japanese Philosophy KAIZEN Continuous Improvement Small incremental changes to achieve better quality AS text p.288 p.298

Quality Standards Set criteria for quality establishment in an organisation. Awards granted ensure quality is implemented and monitored. BS 5750 ISO 9001 Drawbacks? Emphasises process not the product AS text p.288 p.298

Learning Objectives Explain the meaning and significance of quality Assess the various quality systems Discuss difference between quality assurance and quality control Evaluate the importance of quality to a business AS text p.288 p.298