2.3.3 Managing quality

quality

• in manufacturing a measure of excellence or a state of being free from defects, deficiencies and significant variations

• (basically how good or bad the product is)

Quality control (QC)

• inspectors check that standards have been met at the end of the production process → standards are consistent

• ensures that quality standards are met and the customer doesn’t receive a substandard product

• could be lots of waste → fault only identified at the end of production process

Advantages and disadvantages of quality control

• + customer gets quality product

• - lost of waste created by complete sub-standard products

• - spots faulty products but does not prevent it

Quality assurance (QA)

• business can design the way a product/service is produced/delivered → minimises chance output will be substandard

• focus is therefore on the product design / development stage

• if production process well controlled → quality built in

• if production process is reliable → less need to inspect output (QC)

• every worker responsible for work meeting quality standards

Advantages and disadvantages of quality assurance

• + builds quality into process

• + less waste produced = cheaper

• - time consuming

• - costly → staff + time

• - if left to workers they may have different standards → no consistency

Why is quality important?

• fewer faulty products mean less wastage

• quality products = added value

benefits: fewer faulty products mean less wastage

• firms keep control over costs

• customer more likely to be satisfied

• → good reputation/brand image

• → less likely to ask for replacements and refunds = lower costs → maximises profit

• → builds up customer loyalty = repeat purchases which increases sales revenue

• more efficient use of raw materials = more go to the products that are sold to customers

• → leaner / more efficient → maximises profit

benefits: quality products = added value

• gives the business competitive advantage

• customer turn to your firm → stands out ( USP + differentiation)

• allows your firm to charge premium price → increases revenue

• increases market share

impacts on a business of producing high quality products

• + business will be able to use quality to differentiate their products from competition

• + business may be able to charge premium price for products

• + increase in profit and sales revenue

• - high quality → extra quality checks

• - business will need to train employees

• - costs per unit increase and lowers profit