Unit 3.3: The concept of quality

quality

degree of excellence achieved in business operations

total quality management (TQM)

a philosophy that involves everyone in the business in the quest for continual improvement in the attitudes, practices, structures and systems that combine to create a top-quality product

quality control

the process of inspecting products and services to ensure that what customers receive is of a high standard

methods of checking quality

• customer surveys

• return rate of faulty goods

• inspections

• waiting times for product

benefits of good quality

• enhances the reputation

• encourages customer loyalty

• reduces risk

• accreditation with recognised quality standard

• premium pricing

• revenue and profitability

• beating the competition

What are the advantages of checking each product’s quality individually?

• every product gets checked

  • faulty items do not go on sale so protects reputation of business

    • leads to greater sales

What are the disadvantages of checking each product’s quality individually?

• time-consuming so slows down production process and probably not feasible when mass-producing

• may not be an expert and perhaps better in office (opportunity cost) so will need to employ someone

  • increases costs and reduces profitability

costs of improving quality

• employing specialist professional quality controllers are expensive

• involving all employees may require them to be given training in how to spot defects efficiently

• if quality assurance used, faults discovered at beginning, then assembly lines may have to shut down until source of defect found

• if business establishes it needs better quality materials, may be costs in finding new + better suppliers and takes time to build a relationship

benefits of maintaining/improving quality

• uncovering faults earlier + more regularly means number of products wasted is reduced and hence reduce costs

  • also reduces number of customer complaints + the need to replace defective products

• firms charge higher prices for higher quality products so higher revenue

• selling high quality products improves reputation and encourage new customers

  • leads to customer loyalty

    • increases revenue

• producing better quality products than its rivals gives competitive advantage

  • leads to increased market share