CHAPTER 20 ACHIEVING QUALITY PRODUCTION

Quality means to produce a good or service which meets customer

expectations. The products should be free of faults or defects. Quality is
important because it:
• establishes a brand image
• builds brand loyalty
• maintains good reputation
• increase sales
• attract new customers

If there is no quality, the firm will:

• lose customers to other brands
• have to replace faulty products and repeat poor service, increasing costs
• bad reputation leading to low sales and profits

There are three methods a business can implement to achieve quality: quality
control, quality assurance and total quality management:
1. Quality control
2. Quality assurance
3. Total Quality Management (TQM)

1
Quality Control
Quality control is the checking for quality at the end of the production process,
whether a good or a service.

Advantages:
• Eliminates the fault or defect before the customer receives it, so
better customer satisfaction
• Not much training required for conducting this quality check

Disadvantages:
• Still expensive to hire employees to check for quality
• Quality control may find faults and errors but doesn’t find out why the fault
has occurred, so the it’s difficult to solve the problem

2
• if product has to be replaced and reworked, then it is very expensive for the
firm

Quality Assurance
Quality assurance is the checking for quality throughout the production
process of a good or service.

Advantages:
• Eliminates the fault or defect before the customer receives it, so
better customer satisfaction
• Since each stage of production is checked for quality, faults and errors can
be easily identified and solved
• Products don’t have to be scrapped or reworked as often, so less expensive
than quality control

Disadvantages:
• Expensive to carry out
• How well will employees follow quality standards? Not everyone may follow

Total Quality Management (TQM)

• Total Quality Management or TQM is the continuous improvement of
products and production processes by focusing on quality at each stage of
production.
• There is great emphasis on ensuring that customers are satisfied. In TQM,
customers just aren’t the consumers of the final product.
• It is every worker at each stage of production.
• Workers at one stage have to ensure the quality standards are met for the
product in production at their stage before they are passed onto the next
stage and so on. Thus, quality is maintained throughout production and
products are error-free.
• TQM also involves quality circles and like Kaizen, workers come together and
discuss issues and solutions, to reduce waste ensure zero defects.

Advantages:
• quality is built into every part of the production process and becomes central
to the workers principles
• eliminates all faults before the product gets to the final customer
• no customer complaints and so improved brand image
• products don’t have to be scrapped or reworked, so lesser costs
• waste is removed and efficiency is improved
3
Disadvantages:
• Expensive to train employees all employees
• Relies on all employees following TQM– how well are they motivated to
follow the procedures?

How can customers be assured of the quality of a product or service?

• They can look for a quality mark on the product like ISO (International
Organization for Standardization).
• The business with these quality marks would have followed certain quality
procedures to keep the quality mark.
• For services, a good reputation and positive customer reviews are good
indicators of the service’s quality.

4
Customer service
• Customer service is the experience a customer gets when using products
made by the business.
• Satisfied customers make repeat purchases and recommend the product to
friends, leading to additional word-of-mouth sales.
• Customers want to buy goods and services that meet their needs at a price
they can afford. For example a café thrives when friendly staff serve tasty,
well-made meals, in generous portions, at competitive prices.

How to improve customer service

• Successful businesses define the quality or standard of service needed to
meet customer needs.
• For instance, a café can aim to take no more than 5 minutes to serve any
customer once they have ordered their meal.

Ensuring that quality standards are met requires:

• Training so that staff understand their role and responsibilities. For instance,
asking every customer if they are happy with their meal.
• Innovation or introducing new ideas and methods. For example, altering the
menu every three months keeps customers interested and helps a café to
stay one step ahead of the competition.
• Listening to customers helps a business adjust its products to better match
consumer needs and respond to any problems.

Price versus customer service

Customers compare price with customer service. Few customers expect high
quality service when buying low priced items.
For instance, travellers using a budget airline accept that they must pay for
extras such as an in-flight meal.
First class customers expect luxury seats and free champagne. The challenge
facing all businesses is to remain competitive.
They must keep prices competitive while offering a better service than rivals.