Chapter 24: Developing Effective Operations

QUALITY

Quality• Those features of a product or service that allow

it to satisfy (or delight) customers• Tangible measures of quality:

– Appearance– Reliability– Durability– Functions (added extras)– After-sales service: cost, promptness, effectiveness– Repair and maintenance needs

• Intangible measures of quality:– Image and brand– Reputation– Exclusiveness

Importance of quality to a business

Benefits of having a quality system

Issues involved in introducing and managing a quality system

•Impact on sales volume•Creating a unique selling point•Impact on selling price•Pricing flexibility•Cost reductions•The firm’s reputation

•Costs•Training•Disruption to production

Quality System – the approach used by an organisation to achieve quality. Most quality systems can be classified as either quality control or quality assurance.

Quality Control• A system that uses inspection as a way of finding any

faults in the good or service being provided.Benefits of Inspection Problems of Inspection

•Inspection at the end of the process can prevent a defective product reaching the customer•It is a more secure system than one that trusts every individual to do his or her job properly•Inspectors may detect common problems throughout an organisation, so mistakes can be put right more efficiently.

•By placing responsibility for quality failures on the inspector, it does little to encourage individual to improve the quality of their output•Employing an inspection team is an expense that could be viewed as unnecessary if the products are produced “right first time”•Giving workers responsibility for their own work helps to increase the interest, variety and responsibility within a job and helps to motivate workers

Quality Assurance• 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

• Benefits:– Ownership of the product or service rests with the

workers rather than with an independent inspector, giving them greater responsibility

– Theorists such as Herzberg argue that there are positive effects on motivation because of this sense of ownership and recognition of the worker’s responsibility

– Costs are reduced because there is less waste and less need for reworking of faulty products

– With all staff responsible for quality, there should be a higher and more consistent level of quality, which can lead to marketing advantages for the firm.

Systems of Quality Assurance

• Total quality management (TQM) – a culture of quality that involves all employees of a firm

• Kaizen (“continuous improvement”) – a policy of implementing small, incremental changes in order to achieve better quality and/or greater efficiency

• Quality Standards – a set of criteria for quality established by an organisation. IE: BS 5750, ISO9001