Part A - QUALITY

AS 91379 9 (3.1): Demonstrate understanding of how internal factors interact within a business that operates in a global context

A business offers a quality product ~ a good or service ~ when the product is fit for purpose and it meets or exceeds customer expectations.

Quality has grown in importance as customers have had greater access to information sources and more opportunities to communicate their positive and negative experiences of businesses and products.

Quality Control Manufacturers ~ of TVs, watches, food products, etc ~ usually have quality control systems to check that the finished product has reached the required standard. Quality controllers or quality inspectors identify a poor quality product before it is sold to the consumer.  

Weaknesses of Quality Control

O The process involves looking for problems, therefore is negative in its culture. It can cause resentment among workers as inspectors are “successful” when they have found faults.

O It takes away from workers the responsibility for quality. This can be demotivating and may result in lower quality output.

O Inspection occurs once the product has already been made. Faulty products must be discarded or sold at as loss (as a “second”).

Quality Assurance

O This is a commitment by a business to maintain quality throughout the organisation.

O The aim is to stop problems before they occur, rather than finding them after they occur.

O Quality assurance often takes into account customers’ views. For example, customers may be consulted through market research before a product is manufactured or a service provided.

O Successful quality assurance results in zero defect production.

Benefits of Quality Assurance

O It puts emphasis on prevention of poor quality by designing products for fault-free production ~ getting it right the first time.

O Everyone takes responsibility for delivery quality.

O Establishes quality standards and targets for each stage of the production process.

O Checks components, materials and services bought into the business at the point of arrival/delivery ~ not at the end of the production process by which stage time and other resources may have been wasted. Lean Production when there is the minimum of wastage while maintaining high quality.

Total Quality Management (TQM)

This is a business culture approach to quality that aims to involve all employees in the quality improvement process.

Kaizen is a Japanese term meaning continuous improvement. It is a policy of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.

Quality Circles

Kaizen can operate at the level of an individual, or through Kaizen groups or quality circles which are groups specifically brought together to identify potential improvements.

Key features of KaizenO Workers are grouped into quality circles

who are trained to identify, analyse and solve quality problems and present their solutions to management in order to improve the performance of the organisation

O Improvements are based on many small changes rather than the radical changes that might arise from Research & Development (R&D)

O As the ideas come from the workers themselves, they are less likely to be radically different, and therefore easier to implement

O Small improvements are less likely to require major capital investment than major process changes

O The ideas come from the talents of the existing workforce (rather than R&D, consultants or equipment) so are likely to be less expensive

O Workers are likely to feel valued and therefore are likely to be more produced

O There is an expectation that suppliers also take responsibility for supplying resources that meet minimum quality standards

DisadvantagesO Workers may be taken away from their normal

tasks which could reduce productivity in other areas of the business, this in turn reducing profitability

O Involvement in quality circles might also tire and demotivate workers, again reducing their productivity

Benchmarking is a general approach to quality improvement based on best practice in the industry, or in a similar industry. Benchmarking enables a business to identify where it falls short of current best practice and determine what action is needed to either match or exceed best practice. For example, an IT help desk might want its call centre staff to answer 95% of phone calls within six rings, if this is the practice of the best in the industry.

Quality ImprovementStrategy

Whichever approach a business takes to improve its products or services ~ continuous improvement or quality circles ~ the end goal is always the same: happier customers/clients.

An effective quality improvement strategy would have the following characteristics: O product improvementO process improvementO people improvement

Costs of managing Quality

O Staff spending time in training or in monitoring processes.

O Investment in quality measurement systems.

O Costs of running customer surveys are significant both in time and money.

A quality-conscious business recognises that these costs are a good investment and that the benefits of managing quality outweigh these costs.

Providing quality services delivers benefits to the business. It can gain O savings from having more efficient

staff and processesO higher productivity and less wastage O improved staff morale and motivation

Good quality should also be reflected in the bottom line – in sales and profits. In many service industries, the quality of service is the key factor that helps a business to outperform its rivals. High levels of customer care create high levels of customer satisfaction, which can give the business a competitive advantage.