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Learning Objectives
TOPIC 2
THE ROLE OF QUALITY
IN ORGANISATION
Prepared by:
Nurliyana Binti Mohd Shazali
Senior Lecturer
FSPPP UiTM Kampus Seremban
1. Able to elaborate on the concept of
quality in manufacturing and service
organisations, as well as in business
support function.
2. Able to analyse the strategic role of
quality in sustaining the competitive
advantage.
3. Able to explain the relationship between
quality and personal values.

2.1 Quality in the Manufacturing

2.1.1 Manufacturing System
& Service System
7. Industrial engineering and
2.1.1 Quality Requirements in process design
Manufacturing System
8. Finished goods inspection

1. Marketing and sales

and test
2. Product design and engineering 9. Packaging, shipping, and
3. Purchasing and receiving warehousing
4. Production planning and scheduling 10. Installation and service
5. Manufacturing and assembly
6. Tool engineering

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Quality in Production Planning & Quality in Product Design

Scheduling
 Product design and engineering functions
develop technical specifications for products
 Poor quality often results from time and production processes to meet the
pressures caused by insufficient requirements determined by the marketing
planning and scheduling. function.

Quality in Marketing Quality in Purchasing and Receiving

A purchasing agent should not simply be

 Marketing and sales personnel are responsible for low-cost procurement, but
responsible for determining the needs should maintain a clear focus on the quality of
and expectations of consumers. purchased goods and materials.

Quality in Manufacturing and Assembly Quality in Finished Goods Inspection and

Testing
 Both technology and people are
essential to high-quality  The purposes of final product inspection are
manufacturing. to judge the quality of manufacturing, to
discover and help to resolve production
problems that may arise, and to ensure that
no defective items reach the customer.
Quality in Process Design
Quality in Installation and Service
 Manufacturing processes must be
capable of producing output that meets  Serviceafter the sale is one of the most
specifications consistently. important factors in establishing customer
perception of quality and customer loyalty.

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Key Idea (Manufacturing)
 Traditional quality assurance systems in
manufacturing focus primarily on
technical issues such as equipment
reliability, inspection, defect
measurement, and process control.
 Every manager is responsible for
studying and improving the quality of
the process for which he or she is
responsible; thus, every manager is a
quality manager.
Components of Service System
 Employees
 Information technology
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2.1.2 Service System
 Service is defined as “any primary or
complementary activity that does not
directly produce a physical product – that is,
the non-goods part of the transaction
between buyer (customer) and seller
(provider).”
 The American Management Association
estimates that the average company loses
as many as 35 percent of its customers
each year, and that about two-thirds of
these are lost because of poor customer
service.
Key Idea (Service)
Researchers have repeatedly
demonstrated that when service
employee job satisfaction is high,
customer satisfaction is high, and that
when job satisfaction is low, customer
satisfaction is low.
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 Preparation:
2.1.3 Differences between
M - Goods produced prior to consumption.
Quality in Manufacturing and S - Services are produced and consumed simultaneously.
Service System
 Customers participation:
 How to measure customer needs and performance standards?
M - Performed away from the customers.
M- Easy to measure.
S - Customers are often involved in the process.
S- Difficult to measure (different views).

 Labor vs Capital intensive:

 Customization?
M - Capital.
M - lower degree (the goal is uniformity).
S - Labor (involve human contact).
S - Higher degree (different services for different customers).

 No. of transactions:
 Output:
M – Small/limited numbers.
M - Tangible (defect goods can be recalled and replaced).
S - Large numbers / volumes / customer transactions.
S - Intangibility (poor services can only be followed up).

Key Idea (Difference) 2.2 Quality in Business

Support Functions

These differences make it difficult for 1. Finance and accounting – focus on

many service organizations to apply total effects of any financial decisions made.
quality principles, and foster misguided 2. Quality assurance – specialists who
perceptions that quality management perform special statistical studies &
analyses & maybe assigned to help the
cannot be effectively accomplished in manufacturing or other support
services. functions.
3. Legal services – a firm’s legal
department attempts to guarantee that
the firm complies with laws &
regulations.

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2.3 Quality and Competitive S.C. Wheelwright identified 6

characteristics of a strong CA:
Advantage
 Competitive Advantage – a firm’s ability to 1. It’s driven by customer wants and
achieve market superiority. needs.
2. Significant contribution to the
 A strong CA provides customer value, leads to success of the business.
financial success & business sustainability, & 3. Matches the organisation unique
difficult for the competitors to copy. resources.
4. Durable and lasting.
 Strong CA product / service quality &
corporate performance higher profitability. 5. A basis for further improvement.
6. Provide direction and motivation.

2.4 Quality and Personal Values

 Personal initiative has a positive End of Topic 2
impact on business success.
 Quality begins with personal attitudes
& behaviour.
 Attitudes can be changed through
awareness and effort (e.g., personal
quality checklists).
 Quality-focused individuals often
exceed customer expectations