2.4.4 Quality Management Flashcards
Quality
- product meets the specifications that the firm has set
- meets customer requirements ‘fit for purpose’
How to meet quality ?
- Find out what customer wants (MR)
- specify what product does (advertising, packaging)
- make sure specifications are achieved
Why is quality important ?
- customer satisfaction = repeat business, loyalty
- opportunity to grow= market share (revenue)
- less waste = lower costs
- avoid complaints = better image and reputation
- more competitive = differentiates
- premium prices = adding value
- reduce people sensitivity to price
How is quality measured?
control : inspector
assurance: everyone goes through
- recommendations/reviews = returning customers/repeat purchasing / no of exchanges or returns
- rate of stock turnover
- commission/tips
- reward schemes/loyalty cards
Service industry measuring quality
- customer satisfaction
- accurate billing
- speed of response
Manufacturing industry measuring quality
No of products with defects
Wastage
Approaches to quality management
- Quality control
- Quality assurance
- Quality circles
- TQM
- Kaizen
Quality control &; benefits
- traditional, inspector, finished, meet standards
- every product, sample each batch (random sample)
- meet required standards
- guarantee no defective item leaves
- requires little staff training
problems with quality control:
- inspector = expensive = poor quality built in
- mistakes are inevitable = greater wastage and cost
- employees may not take care of work (lack of responsibility)= not best quality
- faulty products can slip through
Quality assurance & benefits
- processes ensure production quality meet requirement of customer
- throughout process
- faults prevented via self checking (reject substandard)
- right first time/ 0 defects
- motivation & empowerment
- reassurance for customers (higher quality service pay more)
- quality system = each stage in production process
problems with quality assurance
- requires training
- tick boxes rather than care for customer experience
- doesn’t promise high quality
- encourage complacency (quality should be kept moving)
quality circles
-small groups of workers same area of production - meet regularly to study/solve production problems
Factors influencing success of quality circle/problems:
- mutual respect = positive industrial relations
- action/implementation
- democratic leadership
TQM
Total quality management
- approach/philosophy to quality
- employees in quality improvement process (contribute to product/service)
- constantly ways to improve
- encourage intrapraneurship
Features of TQM
- all employees = equal importance (motivate=buy in)
- quality considered from design to sales (whole organisation)
- customers internal and external (part of organisation)
- less productive as assessing quality
- need to establish quality ‘culture system’ = quality at centre of everything organisation does
May resist TQM because…
- dont want to lose control
- managers resent authority being given to subordinate
- find it exhausting (happy with what doing)
- not believe it dont see why necessary
- need to invest in additional training
How can managers help implement
- explain why necessary (communicate)
- provide training = feel supported
- rewards
- need to give it time
benefits of TQM
- empowers and motivates staff
- lead to competitive advantage over time (always best)
- deeply rooted in company culture
- quality should show from design, manufacture and after sales service
drawbacks of TQM
- everyone involved
- managers need to implement
- staff sceptical (lacks clear concrete programme)
- may be expensive = training needed to implement
Autocratic leader
like to keep control
Kaizen & advantages
LEAN
- Japanese philosophy of continuous improvement where firms should constantly seek to improve performance
- gradual, orderly and continuous improvement
- ongoing improvement involving everyone
- easier to adapt
- team work
the philosophy;
- accepted by all
- 1 workers = 2 jobs (do it & is it the best)
- many small gradual changes = competitive adv effect
- staff = best resource (based around people and ideas)
- team working (cells and quality circle)
- empowerment (speed of decision making)
- performance targets
- improving quality (MR, design product, plan process)
BPR:
Business Process reengineering
- redesigning key aspects of business from scratch
- scrap existing systems
- rethink/ clean slate
- attract new bosses
- ultimately = job loss
use:
- change product portfolio
- buying another business (change in ownership, technological change)
Problems of implementing/limitations of Kaizen
- culture=management/workers resist change (motivation)
- training cost = change attitudes = expensive & takes time
- justfifying cost = opportunity cost of investment in time & training whilst = loss of output = hard to measure benefits
- diminishing returns: impact improvement, gets less over time and staff enthusiasm decreases
- radical solutions (not right for all situations, may need drastic action to survive)
- time
Factors to consider/influences on which quality system:
- nature of business & nature of what making
- scale of production system
- finance available
- time available
- management style
4 ways quality help be more competitive
- USP
- complaints= cost
- add value = premium prices = profitable
- lower cost = competitive
competitive advantage through quality management
- quality = differentiate against competitors (USP)
- point of promotion
- reduces complaint/return = reduce cost
- non-price stately so may not have to compete on price
2 key elements to kaizen
- based around people and ideas (not new technology)
2. each change on own = little importance (if lots = cumulative effects substantial)
good quality product will:
- high level of repeat purchase = longer product life cycle
- brand building & marketing benefit spread from one brand to another
- allow premium price
- makes products easier to place (retailers stock products with good reputation)
benefits of quality circles
- financial incentive = empowered and increase motivation, feel valued (difference, consultation)
- everyones opinion is valued and respected = managers assembly line workers and engineers mix
- membership voluntary
- employees doing job = better idea of how to improve process = address known quality issues & identify better practices
- cost savings
- improve staff morale
- take adv of knowledge of operations
