1. Quality Business

2. Learning Objectives Explain the meaning and significance of quality
Assess the various quality systems
Discuss difference between quality assurance and quality control

3. Introduction
Quality is one of the most important challenges facing a business
Nearly all markets are becoming more competitive:
Customers are more knowledgeable
Customers are more demanding
Customers are more prepared to complain about poor quality
Customers can easily share information about poor quality (e.g. via or internet discussion groups)
If a business can develop a reputation for high quality, then it may be able to create an advantage over its competitors
AS text p.288 p.298

4. What is Meant by Quality?
Quality is about meeting the needs and expectations of customers
Think about your needs and expectations as a customer when you buy a product or service. These may include
Performance
Appearance
Availability
Delivery
Reliability
Price
If a product or service meets all those needs - then it passes the quality test. If it doesn't, then it is sub- standard.
AS text p.288 p.298

5. Examples of Poor Quality
Product fails – e.g. a breakdown or unexpected wear and tear
Product does not perform as promised
Product is delivered late
Poor instructions/directions for use
Customer service is hard to find (e.g. telephone not answered)
Business employees appear rude or uninterested in the customer
AS text p.288 p.298

6. Toyota Prius recall
Activity In pairs, discuss why quality is important and identify as many reasons as you can.
uk/1/hi/business/ stm
uk/1/hi/ stm
AS text p.288 p.298

7. Costs of Poor Quality
There are many costs of poor quality, including:
Lost customers (expensive to replace – and they may tell other people about their bad experience)
Cost of reworking or remaking product
Costs of replacements or refunds
Wasted materials
Poor quality is a source of competitive disadvantage
If competitors are achieving higher quality, then a business will suffer
AS text p.288 p.298

8. Quality Management Quality assurance Quality control
Producing products of the required quality does not happen by accident
There has to be a production process which is properly managed
Ensuring satisfactory quality is a vital part of the production process.
Quality management is concerned with controlling activities with the aim of ensuring that products and services are fit for their purpose and meet the specifications
There are two main parts to quality management
Quality assurance
Quality control
AS text p.288 p.298

9. Quality Assurance
Quality assurance is about how a business can design the way a product of service is produced or delivered to minimise the chances that output will be sub-standard
The focus of quality assurance is, therefore on the product design/development stage
Why focus on these stages?
If the production process is well controlled - then quality will be "built-in“
If the production process is reliable - there is less need to inspect production output (quality control)
AS text p.288 p.298

10. Quality control Inspection Testing Sampling.
Quality control is the traditional way of managing quality
Quality control is concerned with checking and reviewing work that has already been done
For example, quality control includes:
Inspection
Testing
Sampling.
Quality control is mainly about "detecting" defective output - rather than preventing it
Quality control can also be a very expensive process. Hence, in recent years, businesses have focused on quality management and quality assurance.
AS text p.288 p.298

11. Total Quality Management (“TQM”)
TQM is essentially an “attitude”
Whole business understands need for quality and seeks to achieve it
Everyone in workforce s concerned with quality at every stage of production process
Quality is checked by workers and not inspectors
AS text p.288 p.298

12. Advantages of TQM Puts customer at heart of production process
Motivational since workers feel more involved and are making decisions
Less wasteful than throwing out defective finished products
Eliminates cost of inspection
AS text p.288 p.298

13. Continuous Improvement
Japanese Philosophy
KAIZEN
Continuous Improvement
Small incremental changes to achieve better quality
AS text p.288 p.298

14. Quality Standards
Set criteria for quality establishment in an organisation.
Awards granted ensure quality is implemented and monitored.
BS 5750
ISO 9001
Drawbacks?
Emphasises process not the product
AS text p.288 p.298

15. Learning Objectives Explain the meaning and significance of quality
Assess the various quality systems
Discuss difference between quality assurance and quality control
Evaluate the importance of quality to a business
AS text p.288 p.298