4.4 business

 Unit 4.4 - Improving quality 

Quality - 

Quality - is a measure of excellence which is free from defects or significant variations. A product or service whose features consistently allow it to satisfy (or delight) customers.

Quality is a matter of personal opinion -so it is subjective and can vary from one customer to another 

The quality of a product depends on its ability to meet customer requirements consistently.

This will depend upon:

- how well the needs have been defined

-how well the firm has designed the manufacturing process

-how well designed the product is

Quality tangible and intangible - 

intangible:

-image and brand

-reputation 

-exclusiveness

Tangible:

-appearances

-reliability

-durability

-functions (added extras)

-after sales service

-repair and maintenance needs

Benefits -

-impact on sales - if it meets customer demands product demand should rise

-creating a USP - unique selling point can increase demand

-firms reputation - not having a quality system in place can damage reputation

-cost reductions - less waste and therefore reduced costs

-pricing flexibility - can charge higher prices or have a range of products for different target customers enabling business to have a range of quality products for each size of purse

-impact on selling price - USP means higher prices will be charged (perceived quality)

Methods of improving quality -

There are lots of benefits to having quality goods or services for sale.

However businesses need to decide how to improve the quality of their products as the different systems have pros and cons.

Two quality management systems are:

-quality control

-quality assurance

Issues with any quality system - 

-costs, it is a costly business, especially admin costs

-training, the whole workforce may have a change of culture and training 

-disruption to production, can cause major disruption when being implemented

Quality control -

Quality control - a system that uses inspections to check the quality of work at stages of the manufacturing process

Pros - 

-quality checks at the end can stop faulty goods reaching customers

-inspectors can spot common problems and put them right 

Cons - 

-does not encourage team responsibility 

-expensive to operate 

-responsibility rests with inspectors, therefore staff take no responsibility, which could reduce motivation

Quality assurance - 

Quality assurance - a system that improves quality by arranging every process to get products right first time 

Pros-

-workers take responsibility

-motivates workforce 

-reduced costs because of less waste 

-greater consistency of quality products because responsibility is spread throughout workforce

Cons - 

-needs a change in the culture of the organisation 

-can take time to embed the system because of cultural change 

-could increase costs in the short term

Quality assurance systems - 

Quality assurance systems - an approach to long term success that aims for improvement continually throughout every functional area of a business. It is seen as a long term process and if done correctly it should transform the organisation through changes in attitudes, practices, structures and systems.

-a culture of quality that involves all employees in a firm

-'getting it right first time' is the key 

-this system can reduce cost considerably because of reduced wastage cost 

-TQM allows for a consistent and flexible approach to quality 

-consistent quality can affect price because if products have a reputation for quality then businesses can charge higher prices for them.

Quality assurance systems - 

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 standards - BS5750 and ISO9001

This is a set of criteria used to establish quality systems which are accredited (british standards and international)

Achieving these standards means the business can gain marketing advantages. Customer assurance is guaranteed

Consequences of poor quality - 

-Productivity - poor quality costs money because of productivity problems

-Profitability - if quality increases profitability then poor quality reduces profitability, especially in terms of a negative working environment for employees

-Customer satisfaction - quality is directly related to customer satisfaction; dissatisfied customers are more vocal, It is now easier to complain and reach a large audience with websites and reviews 

-Costs - all of the above will increase costs. Using poor quality, cheaper parts may be better in the short term, but the long term effects might be far more expensive

Summary - 

-quality is a concept which is related to customer satisfaction 

-the better quality your product, potentially the higher price you can charge 

-businesses have to be able to offer a consistent level of quality and quality management systems cost money 

-businesses can use either quality assurance - where everybody is responsible for quality throughout the process, or quality control - where the products are checked at stages 

-quality assurance is linked with employee motivation as it gives employees respinsibilities.



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