ib business and management 5.4 quality assurance
TRANSCRIPT
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IB Business and Management
5.4 Quality Assurance
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What is Quality?
• Quality is achieving a standard for a product or service which meets customers expectations
• What attributes do we associate with good quality?
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Key aspects of Quality
• Good design – looks and style • Good functionality – it does the job
well • Reliable – acceptable level of
breakdowns or failure• Consistency • Durable – lasts as long as it should• Good after sales service • Value for money
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Why is good quality important?What benefits will it bring?
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Benefits of a Quality Reputation
• Customer loyalty – they return, make repeat purchases and recommend the product or service to others.
• Retailers want to stock the product• As the product is perceived to be better
value for money, it may command a premium price and will become more price inelastic
• Fewer returns and replacements lead to reduced costs
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Quality is becoming increasingly important
because?......• Increasing consumer awareness• Increasing Competition• Government Legislation• Increasing consumer incomes
How have these factors driven the increasing importance of quality?
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Task – Look at the following companies…..
1. What would be the indicators of good/bad quality
2. How can these businesses measure the level of quality of their goods/services?
3. What measures could these businesses put in place to ensure good quality?
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How is Quality Measured?
• • Failure or reject rates • Level of product returns • Customer complaints • Customer satisfaction – usually measured by a survey • Customer loyalty – evident from repeat purchases, or renewal rates
• Increasing market shares/increasing sales
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However......• Quality is subjective• Quality is always evolving because of
things like improved technology, better materials, new manufacturing techniques and fresh competitors.
• • Whilst controlling quality has benefits to the firm, it can also be costly to do, so it is important that the benefits outweigh the costs in the long term
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Costs of Poor Quality
• Lost customers (expensive to replace – and they may tell others about their bad experience)
• Cost of reworking or remaking product
• Costs of replacements or refunds• Wasted materials
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Benefits of Improving Quality
• Improved image & reputation, which should result in: • Higher demand, which may in turn mean • Greater production volumes (possibly providing better economies of scale) • Lower unit costs because of less waste and rejected output • Fewer customer complaints (& more satisfied customers) • Potentially higher selling prices (less need to discount)
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QUALITY MANAGEMENT TECHNIQUES
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Quality Management Techniques
• Quality Control• Quality Assurance• Total Quality Management/Total
Quality Culture
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Quality Control
• This is the traditional method used by firms to make sure goods are of the right quality
• Quality inspectors test products or samples of products at the end of the production process
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Advantages of Quality Control
• Requires little staff training• Suitable when staff are unskilled or
temporary• If all output is checked, faulty goods
will not reach the consumer
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Problems with Quality Control
• Sometimes only a sample is taken• As faulty goods are often only
detected at the end of the production process a lot of goods have to be scrapped or reworked
• Staff can feel demotivated
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Quality Assurance
• This is an approach that aims to achieve quality by organising every process to get the product ‘right first time’.
• Every stage of the production process is examined for ways to improve quality
• Documents are produced at each stage to outline the way to do tasks
• Workers are responsible for ensuring quality at their stage of production
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Advantages of Quality Assurance
• Costs are reduced because there is less wastage and re-working of faulty products as the product is checked at every stage.
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Disadvantages
• Can be costly in terms of training• Can create additional paperwork to
implement• Lack of flexibility• Workers can’t use their initiative and
so may become demotivated
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TQM
• TQM is a philosophy introduced by W. Edwards Deming in the 1980’s
• Originated in Japanese firms• TQM aims to develop a
‘quality culture’ in the organisation.
• There is a commitment to quality at every step of the production process and from all staff.
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Total Quality Management (TQM)
More and more businesses are moving towards TQM…. This means:•Quality is part of every process•Quality is everyone’s job•This in turn:•Can increase employee motivation as they have added responsibility and don’t feel they are being checked up on•Can massively reduce costs of re-working/wastage
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Features of TQM
– Quality Circles – meetings of relevant workers to discuss issues relating to maintenance and improvement of quality in the business – may also double as a form of empowerment and motivation.
– Statistical Process Control – statistical data generated to inform the evaluation of processes within the business. These Key Performance Indicators are closely monitored
– Zero defects – systems in place to ensure that no product leaves the business with a defect – important in building supplier relationships, image, reputation.
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Requirements of TQM
• Skilled workers• Motivated workers• Investment in training• Creating a ‘Quality Culture’
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Quality of Services
• Quality of service is more difficult to measure:
• Efficiency• Speed• Interaction with Staff• Cleanliness
• How can quality of services be measured?
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How can Quality be Improved?
• Watch the video• ‘Gordon Ramsay eats at Guiseppes’• What are the problems with Quality• What suggestions would you make to
Guiseppes on how they can improve quality?
• How could they implement:• Quality Control• Quality Assurance• TQM