Quality – introduction What is quality? Quality is important to businesses but can be quite hard to define.

Customers want quality that is appropriate to the price that they are prepared to pay and the level of competition in the market. Key aspects of quality for the customer include: • • • • • • • 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

‘Value for money’ is especially important, because in most markets there is room for products of different overall levels of quality, and the customer must be satisfied that the price fairly reflects the quality. For example, the car maker Skoda is now part of the Volkswagen group which is well-known for quality cars, but prior to this, Skoda owners were amongst the most loyal because even though the cars fell short of most others in style, comfort and performance, they were tough, reliable and very good value for money. Some products and services are marketed as ‘basic’, having none of the extra features and benefits of more expensive alternatives. Good examples would be Easyjet and George at Asda clothing ranges. Even though it may be ‘low quality’ in terms of style or features, these products still give good value for money for their overall level of quality. For the firm, good design is fundamental, so that the product can be produced efficiently, reliably and at the lowest possible cost. Also see the revision note on Quality Improvement. If products are being made for other, large firms, then the quality standards may be dictated by the firm placing the order. Why is quality important? Quality helps determine a firm’s success in a number of ways: • • • • • • Customer loyalty – they return, make repeat purchases and recommend the product or service to others. Strong brand reputation for quality 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 Attracting and retaining good staff

These points can each help support the marketing function in a business. However, firms have to work hard to maintain and improve their reputation for quality, which can easily be damaged by a news story about a quality failure. See the Tutor2U Business Blog story about Cadburys and salmonella. (LINK) How is quality measured? Aside from achievement of standards like BSI, firms can measure quality aspects such as: • • Failure or reject rates Level of product returns

which corresponds to the satisfaction of clients. the closer you get to perfection. and to spot and limit dysfunction. No firm can afford to stand still as far as quality is concerned. Internal quality. there are two types of quality: • External quality. However. This type of procedure therefore requires listening to clients but also must allow implicit needs that are not expressed by clients to be taken into account. so it is important that the benefits outweigh the costs in the long term. it can also be costly to do. Achieving external quality requires providing a product or services that meet client expectations in order to establish customer loyalty and therefore improve market share.• • • Customer complaints Customer satisfaction – usually measured by a survey Customer loyalty – evident from repeat purchases. The ISO 8402-94 standard defines quality as: The set of characteristics of an entity that give that entitythe ability to satisfy expressed and implicit needs. The purpose of internal quality is to implement the means that make it possible to best describe the organisation. The beneficiaries of external quality are a company's clients and external partners. Whilst controlling quality has benefits to the firm. • The purpose of quality is therefore to provide the client with a suitable offer with controlled processes while ensuring that this improvement does not translate into additional costs. It is possible to improve a large number of problems at a low cost. or renewal rates A detailed analysis of areas such as these would be an important part of Quality Improvement – see the separate revision note for more details Some areas for evaluation • • • • Quality is subjective. The opposite of quality. Introduction to Quality Qualité can be defined as the ability to achieve target operational goals. better materials. Quality is always evolving because of things like improved technology. which corresponds to the improvement of a company's internal operation. for private sector companies it is not really a question of exhaustively meeting client expectations ("zero defects") but rather of meeting them better than the competition. For example. Not all aspects of quality are tangible – for example the degree of assurance given by a firm’s name or reputation can be very important even though it is hard to measure. Indeed. or a quality defect also has a cost. the higher the costs reach. the price difference will be less if the defect is detected during . it is generally more costly to correct defects or errors than to "do it right" from the beginning. Internal quality generally goes through a participative step in which internal processes are identified and formalised. Moreover. quality reveals whether or not public funds are being used expertly in providing a service that is adapted to citizens' expectations. The ISO 9000:2000 standard defines it as: The ability of a set of intrinsic characteristics to satisfy requirements. making a defective product over will in the end cost more than double the production price that the initial product would have cost if it had been produced correctly the first time. In the absolute. In addition. the cost of a quality defect is greater the later it is detected. The beneficiaries of internal quality are the company's management and employees. it is a matter of personal opinion and what constitutes an acceptable level of quality will vary from one individual to another. In the public sector. new manufacturing techniques and fresh competitors. In practice.

etc. PDCA refers to the four following steps: • • • • "Plan: define the goals to be reached and plan how to implement the actions "Do: implement the corrective actions "Check: verify that the set goals are achieved "Act: depending on the results that occured in the previous step.) It is a question of finding the right balance that eliminates quality defects as much as possible. Continual Improvement One of the basic principles of quality is prevention and continual improvement. processing the incident. client monitoring. take preventative measures Quality Procedure Improving both internal and external quality allows a company to work with its beneficiaries in the best conditions. a quality procedure is an organisational approach to continual progress in the area of elimating quality defects. quality can be represented by a cycle of corrective and preventative actions called a "Deming cycle": This cycle. is called the PDCA model. which translates into a relationship of trust and gains that are both financial (increased profits) as well as personal (clarification of roles. needs and the product/service. Thus. employee motivation) in nature. Improving quality is a process that requires the participation of the entire company and most of the time leads to changes in work habits and even organisational changes. Thus. shipping costs. represented in the Deming cycle. in order to earn a good degree of customer satisfaction and customer loyalty and make profits.production than if it is detected by the end client (client dissatisfaction. This means that quality is a never-ending project whose goal is to spot dysfunction as quickly as possible after it occurs. all with a reasonable budget. It is a .

• Certification or accreditation is the written recognition by an independent third party that a service.participative procedure. Total Quality Management The concept of total quality management (TCM) refers to the implementation of a business plan that is based on a quality procedure that involves all employees. including the highest level of the hierarchy. Certification is generally based on a standard (preferrably international). cost and deadline. The framework is presented in a quality assurance manual that summarizes the company's quality policy. must participate. A "quality spirit" must be developed and shared by all in order for total quality management to succeed. a comprehensive strategy by which an entire company uses everything to satisfy its beneficiaries in terms of quality. product or system meets a certain level of quality. The goal of quality assurance is to reassure a client about the quality of a company's product or service. i. .e. Quality Assurance Quality assurance is the guarantee to maintain a certain level of quality according to target goals. meaning that the whole company. Quality assurance is guided by a framework document that formalises the quality assurance measures.

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