Business - Quality Management


What is quality?

  • Refers to a standard of excellence
    • meeting the needs and expectation of customers
    • good design
    • durable
    • reliable
    • good functionality
    • consistency
    • value for money
      • customer has to be satisfied that the price reflects the quality
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Importance of Quality

  • fewer returns = fewer costs
  • customer loyalty
    • makes repeat purchases and recommends products to others
  • retailers and distributers will want to stock your product
  • strong brand reputation for quality
  • better value for money = will be bought even when prices change
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  • is subjective and a matter of personal opinion
    • what constitutes an acceptable level will vary from one individual to another
  • is always evolving
    • due to improvements in technology, better materials, new manufacturing techniques, and fresh competitors
  • whilst controlling quality has benefits to a business, it can also be costly to do so. The benefits must outweigh the costs in the long term.
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Measuring Quality

  • quality is measured in two ways
    • tangible
    • intangible
  • tangible
    • appearance: function and features
    • reliability
    • durability
    • cost of ownership e.g., repair/maintenance
  • intangible
    • image/brand
    • reputation
    • exclusiveness
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Cost of Quality

  • poor quality = additional costs
    • replacement and refund costs
    • loss of customers
    • wasted materials
  • poor quality includes:
    • product delivered late
    • doesn't perform as promised
    • poor instruction making product difficult to use
    • product fails
    • break downs
    • general wear and tear
    • unresponsive customer service
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Quality Management

  • ensures that an organisation, product or service is consistent
  • Total quality management:
    • aiming to develop quality culture throughout the business = zero defects
    • involves all members of staff
    • right approach 1st time
    • concentrates on the systems and staff
    • continuous improvement
    • you can't have quality control without first having quality management and quality assurance
    • staff are encouraged to put forward ideas on how to improve the process, this is known as continuous improvement. There will be commitment to quality assurance rather than quality control.
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Quality Assurance

  • production process
  • all workers are involved with checking quality of product at each stage of production
  • makes sure the product reaches the customers standards
  • aims to prevent faulty products from being produced
  • faulty products are identified early in the production process. This will reduce waste, in turn saving the company money.
  • improves workers motivation as they gain recognition
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Quality Control

  • product orientated
  • prevents faulty products reaching customers
  • products checked by inspectors to see if they meet the quality standards set by the company
  • products not meeting standards of quality will be discarded or sent for rework
  • rejected product = expensive = materials wasted = very costly
  • product inspected at the start and end of the production process
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Quality Circles

  • small groups of workers who come together to discuss and solve problems
  • employees who are doing the job often have a better idea on how to improve processes
  • 4 key stages:
    • planning
    • identify what the business needs to do
    • analysis
    • implement quality improvement
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Benefits of Improved Quality

  • key to competitiveness
    • similar price but higher quality = likely win
  • improved image and reputation
  • higher selling price = higher profits
  • higher demand = lower costs
  • fewer complaints 
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  • the objective of benchmarking is to identify internal opportunities for improvement
  • is a process of measuring the performance of a company's products, services, or processes against those of another business
  • benchmarking can be split into 5 key stages
    • planning phase
    • analysis phase
    • integration phase
    • action phase
    • maturity phase
  • best practice in industry and then copy your competitor by adding extra value or unique selling points (USP) to the product
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