QualityQuality: those features of a product or service that allow it to satisfy (or delight) customers.

Think of a product and list five ways of measuring the quality of that product.

• Does everyone have the same list?• Quality is subjective — a matter of personal opinion — and views of it will

vary from individual to individual. • Define quality as providing what the customer wants at the right time, to

the right standard of product and service and therefore satisfying customers

Quality of different products

• Which products need and have high quality?– Aircraft? Cars?– M&S, Waitrose, Tesco – food?– Apple? Gucci? Primark?– Eye surgeon? Hairdresser?

Benefits and costs of quality to a business

What are the main benefits of high quality?– increase in sales volume– creating a unique selling point (USP) and enhancing the

firm’s reputation– Therefore a greater scope for increasing the selling price– pricing flexibility, as customers will want to buy the

product even if price is changed– possible reduced manufacturing cost and reduced

wastage if high-quality materials and processes improve the efficiency of the production process

Benefits and costs of quality to a business

Are there any costs?– Quality can cost money – May need to spend more on better raw materials

or components– Camera or smartphone with more functions,

faster laptop, all cost more – Training staff also matters So issue is the balance of benefits and costs

Costs of low quality to a business

Marketing costs Business costs

Loss of sales Scrapping of unsuitable goods

Loss of reputation Reworking of unsatisfactory goods – cost of labour and raw materials

May have to discount prices Lower prices for ‘seconds’

May impact on other products in range Handling customer complaints

Retailers may not stock the product Loss of consumer goodwill and repeat purchases

Quality control and quality assurance

How can companies make sure quality is high enough:• Quality control– Inspectors are employed to check the accuracy of

completed work• Quality assurance– Detailed systems are put in place to govern quality

at every stage of the production process, so that it is right first time

Quality control

Quality control is the traditional method to manage quality• Workers concentrate on producing as much as

possible• Quality control inspectors check the output meets a

minimum acceptable standard• It may involve inspecting every product, eg car• Or checking one product from each batch (and then

checking the whole batch if one is faulty)

Quality control plus and minus

• Advantages• Inspection at the end of the process can prevent a defective

product reaching the customer• Can be safer than trusting every individual to do his or her job

properly• Inspectors are well trained (Ofsted for schools)

– Disadvantages• Defective product can slip through• Staff focus on a minimum level of quality rather than the best

quality• Not motivating for staff

Quality Assurance• Quality Assurance is a system that aims to

achieve or improve quality by organising every process to get the product ‘right first time’ and prevent mistakes ever happening– Firms put in a documented process• This mandates that every stage, from raw materials to

the finished product, is managed– Self-checking is crucial to quality assurance• Could think of whole process in SHS – schemes of work,

resources, lesson observation, training, sharing best practice

Quality assurance plus and minus• Advantages

– Ownership is with the workforce rather than with an independent inspector, giving them greater responsibility

– Theorists such as Herzberg argue that the responsibility will motivate workers

– Lower costs since there should be less waste — any faults should be discovered during the process

– Because an individual will not want to be blamed for a faulty product, each worker should check what he or she receives, reducing the possibility of a faulty product

• Disadvantages– Since it is a paper based system, have to ensure employees do not see

it as a box ticking exercise

Quality Assurance vs Quality Control

Total Quality Management• Quality assurance (QA) may be seen as a box ticking exercise• Quality management systems include QA as part of a total

approach to quality management. These are fully certified systems, but involve a change in philosophy

• Total Quality Management is the best known approach • TQM can be defined as a management philosophy committed to a

focus on continuous improvements of product and services with the involvement of the entire workforce

• Everyone in the workforce is concerned with quality at every stage of the production process– Staff are educated and trained to take responsibility for their own work.

Should think that of the next person in the production chain as a customer– Staff are encouraged to take pride in their work

Issues involved in introducing and managing a quality assurance system

• Costs– Quality procedures require a great deal of administrative expense to

set up and monitor• Training

– The introduction of a quality assurance system, particularly if part of TQM, relies on a well-trained workforce that is able to understand and implement the quality system

• Disruption to production– In the short run, the training programme provided can be quite

disruptive to existing production methods• Culture

– TQM requires a change in culture supported by strong leadership. Strong leadership is often missing in an organisation

Some questions

1. Name 2 industries which need to produce products/services to a high quality

2. Name 2 industries for which quality is less important3. List 3 benefits of producing high quality goods/services4. List 2 costs of producing high quality goods/services5. List 4 costs to a business of low quality6. What are the 2 main ways companies make sure

quality is high enough 7. Describe quality control

Other quality initiatives

TQM may also include other initiatives:• Quality chains– Where an employee views others in the firm as customers.

The chain exists from the start of the process for a good/service, eg suppliers, to the final customer. It is intact if the final customer is happy

• Quality circles– A group of employees meet together regularly to identify

problems and make recommendations of how these can be fixed. This should improve both the product and process

Other quality initiatives

• Zero defects– Firms aim to produce products with no defects.

This can help build a USP, which leads to repeat business and therefore more demand (and so revenues and profits• Examples?

Other quality initiatives - KaizenQuality system based on continuous improvement• Kaizen (a Japanese term meaning ‘continuous improvement’)

is a policy of implementing small, incremental changes in order to achieve better quality and/or greater efficiency.

• These changes are invariably suggested by employees and emanate from a corporate culture that encourages employees to identify potential improvements.– Employees have to think they have 2 jobs. First is the job itself, and

second to look for ways of doing it better• Familiar in sport – Sir David Brailsford pioneered marginal

gains in cycling