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Quality

QUALITY
VIEWS OF QUALITY What is Quality?
Quality is very hard to define. W Edward Deming, the Quality is remembered long after American quality guru, said that quality is defined by the the price is forgotten. customer. The customer may define quality by insisting on Gucci slogan certain specifications or by exercising choice in the market. Another definition of quality is fit for use. Although hard to define, there is no doubt that customers are now very aware of quality. They use perceived quality as part of the buying decision. The importance of quality in that decision will depend on the choice available and the balance of power between the customer and the supplier. In a competitive market where there is a range of goods available, quality is one of the ingredients in purchasing decisions. The customer will accept some trade-off between price and quality. There is, however, a minimum level of quality that is acceptable. The customer wants the product to work (be fit for use) regardless of the price. Below a minimum level customers will not buy the product. Above the minimum level of acceptable quality, customers will expect to get more as they pay more. When competition is fierce, businesses have to meet or exceed the quality offered by their competitors. The one hairdresser in a village can relate quality to customer satisfaction. If there are four competitors, though, quality may require customers to be delighted rather than satisfied. Dell is a hugely successful computer manufacturer which sells directly to customers through the Internet or newspaper advertising. Its mission statement says:

Customers must have a quality experience and be pleased not just satisfied. Quality defined by specifications
Where the customer is in a powerful position, quality is directly defined by the customer. Many firms lay down minimum standards for their suppliers. This in turn helps them to maintain their own quality standards. Large businesses such as supermarkets and chain stores are able to insist on quality standards. They have the buying power to force their suppliers to conform. For many years, Marks and Spencer has worked with suppliers to ensure that standards are met. Other large purchasers such as government departments and local authorities are also able to insist on high standards for supplies. As new roads are built, the surface is checked to ensure its quality. If the surface does not conform to the required standards, the contractor will have to relay the area.

Quality defined by law

The law lays down minimum quality standards. This applies particularly to products where health or safety are involved. Food must be fresh and has to be handled with care, by trained staff. It is illegal to sell electrical equipment without a plug fitted. There are also trading standards. These are often industry based. They set minimum standards for particular goods and services. Some trade associations offer guarantees for work done by members of their association. Some industries have watchdogs. They ensure that minimum standards are met. MRA, the water industry regulator, has the task of ensuring that water quality is maintained. Other firms, and in particular local and central government agencies, will insist that their suppliers have obtained BS 5750 or the international equivalent ISO 9000 (see Figure 1). This ensures that suppliers are operating within a quality framework.
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ISO 9000 is an international standard for quality systems. It is a British standard that is recognised worldwide. It was previously known as BS 5750. Companies who are registered can display the BSI symbol. In order to register, companies have to document their business procedures, prepare a quality manual and assess their quality management systems. They are assessed by an independent assessor. After obtaining the award, businesses are visited at regular intervals to ensure compliance. It is necessary that everyone in the organisation follows the processes outlined in the quality manual. Firms who have registered say that it has provided a range of benefits to the business. These include: increased competitiveness increased customer satisfaction less waste cost savings fewer mistakes increased efficiency better motivated employees improved communications increased profits.
Figure 1: ISO 9000

For all customers, quality is about satisfying their expectations. Customers expect products to work and to be of a consistent standard. For many customers the issues are not limited to reliability. Quality: The customer will take into account the total buying is satisfying customer expectations experience. Customer service and after-sales service applies to services as well as may be as important as the product itself. The products inability to obtain spare parts is also a quality issue. involves the whole business process, The way the product is sold, even where it is sold, all not just the manufacturing of the contribute to the customers feelings about the product quality of the product. Quality is a moving target. is always changing Quality that is acceptable today may not be in the future. Customer expectations of quality are constantly changing. As quality improves, customer demands also increase.

QUALITY CONTROL (QC)

QC processes are inspection activities which involve monitoring to ensure that defects (or potential defects) are spotted. Quality is an important competitive issue. Its importance will depend on how competitive the market is. Where the consumer has choice, quality is vital. A reputation for good quality brings marketing advantages. A good quality product will: be easier to establish in the market generate repeat purchases have a longer life cycle allow brand building and cross marketing save advertising costs allow a price premium (This is often greater than any added costs of quality improvements. In other words, quality adds value. It, therefore, generates additional profit.) make products easier to place (Retailers are more likely to stock products with a good reputation.)

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MARKETING COSTS Loss of sales Loss of reputation May have to price discount May impact on other products in range Retailers may be unwilling to stock goods

BUSINESS COSTS Scrapping of unsuitable goods Reworking of unsatisfactory goods costs of labour and materials Lower prices for seconds Handling complaints/warranty claims Loss of consumer goodwill and repeat purchase

Figure 2: Implications of poor product or service quality

How can firms detect quality problems?

The ideal is to detect quality problems before they reach the Quality has to be caused, customer. This can be done by: not controlled. Inspection of finished goods before sale this has been the Philip Crosby traditional method. It may be all goods or only a sample. Self-inspection of work by operatives this is being used more as businesses recognise that quality needs to be everyones business. Thirty years ago, Professor Hertzberg was emphasising the psychological importance of self-checking. Today it is a common feature of progressive factory managements. Statistical analysis within the production process this can be used to ensure that specifications stay within certain limits. For example, Mars might set a target weight for 100g bags of Maltesers of between 96 and 104g (see Figure 3). Only if the weight slips outside this range will an alarm indicator be triggered to warn that the specifications are not being met. Staff could then stop the production line and readjust the machine to ensure that the correct weight is being given.
Grams
Upper warning limit

104

100

Target Weight

96

Lower warning limit

Time

Figure 3: Actual weight of 100g bags of Maltesers coming off the production line

When problems are not detected before reaching the market, they can be identified by: Market research if the company is aware of quality, it can build it into its market research. This allows the company to discover customer attitudes towards quality. It can be used to detect quality problems. Market research can include competitive analysis. This ensures that competitors are not gaining advantage by quality initiatives. Customer complaints and returned goods this is one of the most immediate ways of identifying problems. It will only work if there is a system to collect and process the information. A store manager may be able to make an exchange or refund. If the problem is only dealt with at this level, the customer may be satisfied, but the problem could persist. The business needs to ensure that information is passed back to head office.
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How do businesses control quality?

Traditionally, quality control has been the responsibility of the production department. In the past, most quality control processes were concentrated in the factory. These were intended to prevent faults leaving the factory. The methods of quality control focused on statistical analysis and inspection. Today, firms are more likely to see quality as having product and service aspects. There are four stages to quality control. They are prevention, detection, correction and improvement. Prevention - This tries to avoid problems occurring. It can be applied to any part of the business. For example, at the design stage consideration may be given to quality by: Ensuring the product is safe Ensuring the product is easy to use Ensuring the product is reliable and long lasting Building in features that minimise production errors Detection - This ensures that quality problems are spotted before they reach the customer. This has been the traditional emphasis of quality control. The use of computer-aided statistical analysis has given firms better tools to detect faults. It has also enabled firms to keep production standards within certain tolerance levels. Increasingly, businesses are making detection the responsibility of every employee. Correction - This is not just about correcting faults. It is also about discovering why there is a problem. Once the problem is identified steps can be taken to ensure it does not recur. Improvement - Customer expectations of quality are always changing. It is important that businesses seek to improve quality.

QUALITY ASSURANCE (QA)

QA includes all the activities connected with the attainment of quality, including:
Design, including proving and testing Specification, which must be clear and unambiguous Assessment of suppliers, to ensure that they can perform Motivation of all concerned Education and training of all suppliers staff Inspection and testing Feedback, to ensure that all measures are effective

TOTAL QUALITY MANAGEMENT (TQM)

TQM was introduced by American business guru W Edward Deming in the early 1980s. He worked with Japanese firms and his techniques are said to be one of the reasons for the success of Japanese businesses. The total quality philosophy is based on the involvement of all concerned. It is a way of looking at quality issues. It requires commitment from the whole organisation, not just the quality control department. The business considers quality in every part of the business process. TQM focuses on systems procedures and processes rather than goods or services being supplied. Total quality in the supply chain would mean that suppliers, as well as customers and our own workforce, would be involved in determining quality. Suppliers supporting this process and eliminate defective goods prior to supplying them thus diminishing the need to inspect goods and assess suppliers, who are enthusiastic and committed to quality management as much as their customers. Totally quality management is about building in rather than inspecting out.

QUALITY CIRCLES
Quality circles originated in Japan. Groups of up to 12 workers plus one or two supervisors or managers from the same department would meet once or twice a week on a voluntary basis to find better ways to do things: improving quality, increasing output, easier work, or getting along with each other better. Quality circles are used to address known quality issues such as defective products. It also has the advantage of improving employee morale through employee involvement. It takes advantage of the knowledge of operators.
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Total Quality is the goal for many organisations, but it has been difficult until recently to find a universally acceptable definition of what quality actually means. The European Foundation for Quality Management (EFQM) Quality Model has been introduced in 1992 and can be used as a tool for self-assessment, where every single person within the organisation can work on improving his or her own performance through self-evaluation and assessment. It can be used for benchmarking where one company measures itself with other companies in the sector to identify improvement opportunities. This model can help an organisation structure its own Quality Management System. The model helps to assess organisations for the European Quality Award. The EFQM model may be depicted as below:

Source: http://www.12manage.com/images/figure_efqm.jpg The 5 quadrants on the left represent the key enablers for quality to occur in an organisation. These are through the leadership from top management such as democratic or autocratic where each manager reflects his background and preparation for the job being carried out but also the responsibility pertaining to his post. The people in the organisation enable quality to occur in terms of involvement and motivation that these demonstrate on their job and observations should be made such as rate of absenteeism. Policies are to be in place so as to guide employees in relation to procurement, recruitment and HR. Partnerships may be carried out with suppliers and distributors and the resources including equipment. Processes include transformational processes and technical or management processes such as ISO 9001. They are to include a complaints procedure which would help the organisation to learn from the market and develop products accordingly. The results quadrants include people results which may be viewed through internal measure of employees in each department. The customer results include customers' perceptions, feedback on product or service. The society results are the impact of the organisation on society. These include corporate social responsibility, carbon footprint, the impact of chemicals used on the environment and the impact on the mentality of the society where the company is operating. The key performance results include the facts in numbers and act as benchmark. These quadrants all contribute to the downstream flow, whilst the model represents innovation and learning as part of the upstream flow, where the organisation can renovate itself and its products/services by adjusting to market demands.
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