3.4.4 Making operational decisions to improve performance: improving quality

Customer may insist on certain specifications. Quality hard todefine, but no doubt customers aware of it. Perception of quality important part of buying decision.

Customer accept trade-off between price + quality. However, min level of quality acceptable. Wants product to work regardless of price. If customers think quality below min level of acceptable, will expect to get more as pay more. 

Importance related to level of competitiveness in market. When comp fierce, quality can tip balance in customer's decision-making. Perception of quality can change.

For all customers, quality about satisfying expectations. Customer will take into account total buying experience. Customer service + after-sales service may be as important as product itself. Way product sold + where contribute to feelings about quality of product.

Quality moving target - standard acceptable today may not be in future. Customer expectations of quality constantly changing. As improves, customer demands increase.

Marketing costs: 
 - loss of sales
 - loss of reputation
 - may have to price-discount
 - may impact other products in range
 - retailers may be unwilling to stock goods

Business costs:
 - scrapping of unsuitable goods
 - reworking of unsatisfactory goods - costs of labour + materials
 - lower prices for 'seconds'
 - handling complaints/warrant claims
 - loss of consumer goodwill + repeat purchase

Introduced by W. Edwards Deming - American business guru. Worked w/ Japanese firms, techniques said to be one of reasons for success of businesses eg Honda + Toyota.

Not management tool - philosophy. Way of looking at quality issues. Requires commitment from whole organisation. Business considers quality in every part of business process - design to sales. About building-in rather than inspectng-out. To be successful, should be woven into organisational structure.

Traditional way to manage quality - based on inspection. Workers get on w/ producing as many units as possibe, quality control inspectors check output meets min acceptable standards. Might be done by checking every product.

Probelm w/ system - faulty products can slip through, stops staff from producing best quality - focus on products 'good enough' to pass checks. TQM superior approach.

Assures customers detailed systems in place to govern quality at every stage in production. Will start w/ quality-checking process for newly arrived raw amterials + components. 

Companies have to have documented quality assurance system. Should operate throughout company - suppliers + subcontractors. 

Main criticism - paper-based, encourages staff to tick boxes rather than care about customer experience.

Customer expectations of quality always changing. Important that businesses seek to improve quality. Staff need to be encouraged to put forward ways in which job can be done better. Kaizen become common in British manufacturing.

Programme developed byu America's General Electric Company - aims to have fewer defective products than 1 per 300,000. To achieve ghis, staff trained to become 'Green Belt' or 'Black Belt' quality experts. 

Group of employees who meet regularly to identify problems + recommend adjustments to working process.

Done to improve product/process. Used to address quality issues eg defective products. Can be useful for identifying better practices that may improve quality. Has adv of improving staff morale through employee involvement. Takes adv of knowledge of operators.

Aim to produce goods + services w/ no faults/problems. Vital in industries eg passenger aircraft production/manufacture of surgical equipment.

Research shows staff like to take pride in work, working to HQ standards important. Management focus on quality - can boost morale + motivation.

HQ standards can boost price levels remarkably. Waitrose supermarkets champagne prices £20-£255 for bottle - customers willing to pay £255 for product only need to pay £20 for.

If quality control to be effective, must balance costs against advs.

Companies relying on outsources/temp staff may struggle to achieve high levels of quality implied by TQM culture. True quality about service as well as product - relies on wholehearted commitment of staff.