U1 & U2 Flashcards
Manufacturers have realized that quality is of immense importance to stay competitive in the market and must plan how to offer good quality throughout the their value chain. The process begins with?
-the selection of suppliers
-and raw material,
-continues with the production process,
-and ends with the customer.
a firm that does not manage its quality systematically is unlikely to be successful in ?
building good brand reputation and customer loyalty. Considering the fierce competition in global markets
Quality management emerged around ?
the ninteenth century, when the term primarily referred to controlling quality, e.g., in production or as a service provider .
People performed specific jobs in factories and a select individual (typically the foreman) was responsible for?
overseeing the workers and the products.
Before the First World War, the production of many goods became ?
more sophisticated, and the role of official quality controllers emerged (Ingason, 2020, p. 21).
As time progressed, and extensive production took place during and after the Second World War, —————————————was introduced.
statistical quality control
Quality controllers, for example,
took product samples, noted deviations and defects, and summarized their findings in charts .
As early as the 1980s, Garvin (1984) identified —————————–as an important issue for creating a firm’s —————————————–.
product quality
competitive advantage
Around that time, many Japanese manufacturers who?
entered the US market offered better product reliability and had lower dissatisfaction levels.
Once the US firms lost market share to their new competition, they understood?
the value of quality in creating a competitive advantage.
Competitive advantage?
This is what makes a firm more successful, e.g., they have an increase in proportion of total sales compared to other competing businesses and cannot be easily imitated.
Another movement became popular in the same decade. Companies understood that control beyond the ———- was necessary, and total quality management (TQM) systems were ———- ————————————-.
project
set in place
Quality management thus developed into a?
management style.
The focus further shifted from performance control on total quality management to?
the management of customer expectations.
Every employee was now responsible for providing quality, from the worker on the assembly line, to the service person who had direct customer contact. Due to?
increasing globalization, it was difficult for large firms to manage quality across countries.
Firms worked to introduce certification along international quality standards.?
it was difficult for large firms to manage quality across countries.
National standard associations around the world formed the —————————————————————, located in Geneva, Switzerland. Isos is the Greek word for—————— .
International Standardization Organization (ISO)
“equal”
The ISO has created a series of standards related to organizational management. One internationally recognized quality norm is?
DIN EN ISO 9001
DIN EN ISO 9001?
Which relates to quality procedures concerning management and quality assurance (ISO 9001:2015;
This norm is helpful for an international understanding of quality.
Numerous definitions of quality exist since there are so many different meanings associated with the term quality. Because the term is ?
ambiguous,
however, it is essential that every worker in a given company have the same understanding of ?
quality,
or communication errors will arise.
First, ?
there needs to be a comprehensible strategic plan concerning quality in a firm.
Second,?
if quality is not precisely defined, quality cannot be measured and controlled for.
And third,?
firms cannot work toward common goals without these being clearly defined .
today, the issue of quality in a broader context is still as important to firms as it was in the past. Quality can be influenced by myriad factors:
-saturated markets;
error costs;
-increasing environmental awareness, technification of everyday life, customer knowledge (and the availability of information), and customer legal power;
-globalization;
-and company image
Product and service quality is influenced by all activities in a company across?
the value chain.
Quality can be a critical success factor for a firm to establish a ————————————– Many other firms compete on ————(e.g., the car manufacturer Dacia), whereas other choose to compete on —————- (e.g., the car manufacturer Bentley). These firms then need to carefully plan and monitor their ————-.
competitive advantage.
costs
quality
quality
Starbucks, for example, has a competitive advantage because of ?
its coffee quality, which leads to very high customer satisfaction.
To be able to maintain a competitive advantage, it is essential that firms include?
strategic planning of their processes as part of their corporate management.
Strategic management first involves?
-the careful research of the internal and external environment of the firm.
-Next, it includes the formulation of a strategic plan and the implementation of the plan and the strategic control.
In the literature, these steps are presented as a——————–. One of the essential models in management, it is also called the ———————————-.
circle
management circle
Part of quality management is the creation of ?
trust that all quality requirements are fulfilled.
Many of these requirements are specified in a ?
firm’s quality management handbook.
The task of quality management in a firm is then to increase?
their ability to meet the set quality requirements.
It is essential that the firm has an understanding of ——————-. Quality is not something that is achieved by ———————-; instead, quality needs to be ———
quality
extensive testing
created
Many firms decide to use a quality management system (QMS) to improve?
their performance.
This system is a good basis for ?
sustainable development (ISO 9001:2015).
A QMS is a formal system in which promises are delineated in?
documents and operation is controlled.
The system ensures that the work follows the specified ————-. In the end, there needs to be documented evidence that the procedures were all performed —————————.
procedures
according to plan
Thus, “the three foundations of a quality system [are]:
a promise,
execution of the promise,
and proof thereof”
The QMS is important for ———–employees, e.g., job training, but also for ————— parties, e.g., customers, suppliers, and shareholders. Overall, managing quality systematically with the help of a QMS saves a firm time and cost by reducing ———.
internal
external
mistakes
The international standard is to apply a ————————— when ————-a quality management system to meet customer requirements.
process approach
using
A process approach ?
“involves the systematic definition and management of processes, and their interactions, so as to achieve the intended results in accordance with the quality policy and strategic direction of the organization” .
This process approach is accomplished by using ?
the plan-do-check-act (PDCA) cycle,
the plan-do-check-act (PDCA) cycle, which was used in seminars by?
W. Edward Deming since 1940.
It is often associated with?
quality management
and continuous improvement.
Deming used the “P” to explain that ——————————————————–. “D” explains that the process is————————;
“C” is for check and implies that the processes —————————————-. The final letter, “A” shows that firms need to ———————————————————————.
business processes and resources need to be planned
realized
need to be controlled
act on any deviations found in the control phase
The term “quality” has evolved since its first use in ancient times.
Indeed, it is used in many ways in our everyday language. People will say things like “That is quality stuff” or “When I see quality, I know it.”
Even in literature, we can find numerous approaches to define it. But what exactly does quality mean?
Several types of definitions are discussed in Garvin.
-The transcendent approach
- The product-based approach
-The customer-based (also called upper-based)
-The manufacturing-based definition
-The value-based definition
The transcendent approach
begins with the absolute and refers to subjective feelings about objects.
The product-based approach
refers to measurable and classifiable product characteristics.
The customer-based (also called upper-based)
definition places emphasis on perceived customer demands.
The manufacturing-based definition
defines secondary characteristics that are required for the fulfillment of the product, value- and customer-related characteristics for manufacturing the product.
The value-based definition
refers to the cost or price of the benefit.
Yet, the early definitions of quality often centered around ?
product quality.
A further popular, but simple, definition of quality is ————————-” which refers to product features (e.g., —————————————————————————————)
and freedom from deficiencies (e.g., ——————————————————————————————-).
“fitness for use,
design, technical features, product performance, reliability, and durability
in the production process, the conformity to requirements, and lack of errors or defects at the time the product is delivered or used;
Kerzner criticizes the use of the term as a quality definition and points out that terms like “fitness for use” or “zero defects” are ?
goals rather than definitions of quality .
As organizations realized that quality was necessary to be competitive on international markets, they started to think about quality management more ——————–. Rather than just looking at product quality, they looked at quality throughout the whole ———————-.
professionally
value chain
The term quality needed to mean the same for anyone in the company and for trading partners outside the company?
As organizations realized that quality was necessary to be competitive on international markets, they started to think about quality management more professionally. Rather than just looking at product quality, they looked at quality throughout the whole value chain.
Firms have started to use the international definition based on ISO 9000:15 . Quality based on the ISO 9000:2015 norm is defined as?
the “the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs”.
A quality object is fit for?
its purpose and conforms to specific requirements.
Objects refer to :
products, services, processes, and systems
Objects build three levels for quality consideration
(system, process, and product) as depicted in the figure below.
An object is described with adjectives like
“bad,” “good,” or “excellent.”
Objects have inherent and assigned characteristics. The inherent characteristics are properties of an object (e.g., ?
a product, service, process, system, organization) that are fundamental to an object and cannot be exchanged easily without further effort.
Inherent characteristics
An object has a characteristic property.
The material, color, size, and durability of a product, e.g., a shoe, are inherent characteristics of the object that ?
cannot be changed after production.
Customers have certain requirements on these inherent characteristics, like the color and size, but?
not necessarily on all inherent characteristics.
They might want a black leather shoe in US size 9. Customers place quality requirements on inherent characteristics but?
not on assigned characteristics
Assigned characteristics
These characteristics have been explicitly assigned to an object.
Assigned characteristics can be altered without?
Because these assigned characteristics can vary and because these are not fundamental characteristics of a product, they are not quality indicators for firms
changing the object itself.
The price or the brand name of the shoes, for example, can vary over time but changing the price or brand name does not change the product itself?
Because these assigned characteristics can vary and because these are not fundamental characteristics of a product, they are not quality indicators for firms.
The term “requirement” refers to?
defined expectations that are assumed or obligatory. When quality is assessed, the inherent characteristics of objects are compared with their requirements.
Without knowing the requirements, it is impossible to formulate a————————– about quality.
statement
Requirements
These needs or expectations from stakeholders are either explicitly defined or implicitly given by common ideas from the participants.
The concept of TQM allows many stakeholders to/
formulate requirements.
Stakeholders include, for example,
suppliers, employees, investors, and society.
Stakeholders might formulate requirements like ——————————————. Customers might have product-specific requirements, like a specific —————————–. Other stakeholders might formulate more ———————-, like legal requirements (e.g., working conditions or safety regulations),——————————(e.g., noise regulationsm or traffic routing), or ———————————- (e.g., energy and water consumption).
1-laws and norms
screw or tire size
2-general requirements
3- social aspects
4-environmental regulations
These stakeholders then formulate requirements concerning
a) product quality,
b) process quality,
and c) system quality.
It is then the task of the firm to implement these requirements as part of?
their quality policy ).
Using ISO 9000:2015 as a reference, quality then means?
fulfillment of the targets the firm sets itself.
Quality considerations can be distinguished into three levels.
First, the product quality characteristics and customer demands build one perspective for quality consideration.
Second, the processes and the product themselves are considered. Here, the production process conforms to the requirements and is extended to further services processes.
Third, the product and the process do not exist in isolation but in a system that includes the processes and resources in a whole organization .
Rather than looking at the three levels of quality considerations, some firms work with?
quality dimensions.
Garvin (1984) identified the following self-contained quality dimensions:
-Performance refers to the objective operating characteristics of a product, e.g., speed, which can be measured. In addition, it includes subjective characteristics, e.g., handling and clarity of mobile phone display, which are evaluated differently by every individual.
-Features refer to secondary characteristics of a product beyond its basic functions, e.g., a fingerprint sensor on a mobile phone.
-Reliability refers to the probability that the product will fail in a given time period.
-Conformance is “the degree to which a product’s design and operating characteristics match preestablished standards” (p. 31). It is measured by the incidence of defects.
-Durability refers to the economic and technical life span of a product, e.g., before it breaks down or needs repair.Serviceability refers to “the speed, courtesy, and competence of repair” (p. 32).
p
=Aesthetics is a subjective measure of quality and relates to the look and feel of the product.
=Perceived quality is a subjective measure of overall quality in terms of brand image, advertising, or brand name. This is done especially when only incomplete information is available prior to purchase.
In today’s understanding of quality management, managers know that?
there is more to quality than product and production quality.
Other aspects, like “design, handling of raw materials, [and] customer complaint processes,” also play a role in?
quality management
Companies should develop a quality —————-that views quality as both a means to reduce ——– and as an opportunity to safeguard the existence of the company and jobs.
culture
cost
In a firm with a quality culture, quality should then be?
lived by everyone in the company. Quality is created in every segment or task of the firm’s operations.
An effective quality management system depends heavily on the employees. They therefore?
need to be trained,
knowledgeable,
friendly,
and engaged at all times
and should be responsible for delivering a product or service “with the right quality”
If the firm does not plan strategically and nor communicates the quality requirements to all people in the firm, the individual and the firm as a whole is unlikely to be?
successful.
The following conditions must be ensured when firms want to offer good quality:
-Quality should be planned strategically.
-Quality is the result of clear decisions about all deliverables.
-Communication paths for all production processes are needed to ensure the exchange of information for all people involved.
-Quality management covers all areas within the company.
-Quality is something that needs to be lived by everyone in the firm daily.
The requirements for quality are ?.
manifold
Quality in its broadest sense has different influencing factors. The graph below shows seven influences that need to be managed.
A single factor could destroy a customer’s ——————————————.
quality perception
The importance of all seven influences can be illustrated by someone who enters a fast-food restaurant and orders a burger.
The person is somewhat in a rush and therefore wants food quickly. The overall quality perception is going to depend on the interaction with personnel (human), the machine (display order), the management of the process, the overall restaurant environment, and the quality of the product itself (e.g., the burger meat and toppings). Even if the person had a nice interaction with the personnel, the product arrived quickly, the card payment was smooth, and the restaurant ambiance was nice, a crushed burger box with a smashed product could diminish the overall positive quality perception. It is therefore essential to have a broader view on quality management and its necessary requirements.
In 2007, the car manufacturer Daimler experienced a marketing disaster when….
their A-class car was introduced to the market prematurely. Just after the product went on the market, a Swedish magazine seeking “the car of the year,” conducted a product test and discovered that the car could not pass one of their standard tests, the “elk test” When driving quickly toward obstacles, the car did not run smoothly around them and instead tipped over. The media coverage was a disaster for the firm. In addition to their loss of reputation, the overall total loss resulting from this failed market launch was estimated to be 1.25 billion euro .Consequently, the firm thought more carefully about its quality control management.
As the A-class example illustrates, poor product quality can have severe consequences for a firm. Quality is a success factor for firms, and poor quality can be very risky.
Imagine a tire manufacturer that produces defective tires. These tires could burst and cause horrible accidents.
According to Benes and Groh (2017), :
-false planning,
-lack of supervision and communication,
-lack of motivation and work responsibility,
-and inability to meet customer requirements lead to quality failure .
Many additional negative consequences result from’?
quality failures, e.g., complaint costs and decreased customer satisfaction and liabilities.
The prevention, appraisal, failure cost (PAF) framework divides quality costs into three categories
table
Firms can invest in the prevention of quality costs by?
setting up and implementing a quality management system,
for example?
They can introduce quality planning of the production system and invest in test procedures and equipment.
In addition, they can perform quality engineering, which includes :
preventive maintenance;
collecting defective data;
and regularly calibrating the production equipment.
Firms can also:
work with their suppliers on quality assurance and assess these.
Further, firms can increase the durability of their products with ?
robust design,
offer quality trainings for everyone in a firm,
and invest in quality audits.
If quality defects are prevented, customers are more likely to be?
satisfied.
Appraisal costs can be prevented by ——————. Firms can set up inspection and test material, they can introduce ————————————————————— that they have collected.
inspections
quality audits, review, and evaluate the data
They can:
conduct product performance tests,
monitor their suppliers,
and qualify for ISO 9000
As the table explained, failure costs exist in two forms:
internal and external.
Internal failure costs emerge because of ?
a fault that comes from the firm during the production process, like troubleshooting in the assembly line; reinspection or disruption of production schedules; plant maintenance; warranties; keeping higher stocks levels to compensate product defects; time; and cost for handling complaints, customers, and repairs.
External failure costs occur after?
and include costs that occur after the customer is in possession of the product (e.g., lost production after system failure or costs due to the unavailability of labor, process waste, and disposal; Foster, 2017, p. 114).
the production process
External failure costs occur after include ?
costs that occur after the customer is in possession of the product
(e.g., lost production after system failure or costs due to the unavailability of labor,
process waste, and disposal).
Customer satisfaction is of great economic importance and thus?
is the focus of quality management regulations.
Brand loyal
An individual is brand loyal and buys a product repeatedly if they have a positive attitude toward the brand and believe that the brand is superior to its competitors.
Satisfied customers tend to be————————————————————————.
brand loyal and continue to buy products from the same firm
Over time, loyal customers also tend to?
buy other products from the same company and are less price-sensitive because of their high satisfaction level.
Over time, loyal customers also tend to buy other products from the same company and are less price-sensitive because of their?
high satisfaction level.
Overall, customer satisfaction leads to higher ——- and reduces the ————————————–through —————————.
revenues
cost of attracting customers
advertising
Unsurprisingly, the main goal of DIN EN ISO 9001:2015 is to improve?
customer satisfaction.
The PDCA cycle, for example, is a tool applied in this context to ?
continuously improve quality.
Customers generally buy products as a solution to a problem and then pass through a ?
five-step decision-making process.
They start with problem recognition,……
search for information,
evaluate alternatives,
choose a product,
and evaluate it in post-purchase processes.
The product or service quality can play a role in —————-.
all five steps
Imagine that Martin’s TV is broken.
In the first step of the decision-making process, he recognizes that the broken TV is a problem and that he wants a better-quality TV next time.
While researching, Martin might look for products that possess certain quality criteria. When evaluating competing products, the ones that meet his quality criteria might be preferred over alternatives.
He might buy one of his preferred brands because he is brand loyal. During the purchase phase, Martin might select a store known for a nice ambiance and employing competent salespeople. In the end, Martin evaluates his TV.
The result of this post-purchase evaluation will be Martin’s level of satisfaction or dissatisfaction.
Satisfaction
The customer’s perception of the service received, this measures how happy or unhappy the customer is with the firm’s product, service, or experience.
Satisfaction “refers to the overall feelings, or attitude, a person has about a product after [they purchase] it” .
Through communication in the media or discussions with other people, customers have expectations about?
the product features (technical features, design, performance, reliability, and durability), but they also expect freedom from deficiencies.
The firm’s communication should thus?
correspond to the delivered product quality.
After the product purchase and \/or use, the customers compare their expectations with?
the confirmation\/disconfirmation paradigm.
what was actually delivered.
This is called?
the confirmation\/disconfirmation paradigm.
New product development is very important for ?
a firm’s strategy.
When a firm develops new products, it needs to consider the ———————————————–in the planning stage.
customer requirement
Companies today do not grow because of?
volume or price,
but because they offer customers innovative and valuable products with which they differentiate themselves from competitors.
Normally, a linear relationship between —————————————————- is assumed in the literature.
product attributes and customer satisfaction
