Managing Operations: Week 7

Quality Definition

• Quality: 'Ability product (good/service) consistently meet/exceed customer expectations
• Customers' + producers' perspective.

Meaning of Quality

Producers' Perspective: Quality Conformance

• Conformance specifcations
• Cost

Consumers' Perspective: Quality of Design

• Quality characterisitics 
• Price

What is Quality: A final perspective

• Customers' + producers' perspectives depend each other.
• Producers' perspective: production, process + cost.
• Customers' perspective: fitness use + price.

Benefits of Quality: Why firms improve quality

To achieve multiple goals, such as:

• Cost reduction
• Customer satisfaction enhancement

Dimensions of Quality: Manufactured products

• Performance: Basic operating characterisitics product; how well car works.
• Features: 'Extra' items added basic features, e.g. built-in refrigerator/massage seats car.
• Reliability: Probability product operate properly within expected time frame (consistence performance overtime); e.g. TV work without repair about 7 years.
• Conformance: Degree which product meets pre-established standards, e.g. battery life.
• Durability: How long product lasts before replacement (useful life).
• Serviceability: Ease getting repairs, speed repairs + competence repair person.
• Aesthetics: How product looks, feels, sounds, smells/tastes.
• Safety: Assurance that customer not suffer injury/harm from product; especially important consideration with automobiles.
• Perceptions: Subjective perceptions based brand name, advertising etc.

Dimensions of Quality: Service

• Time + Timeliness: How long must customer wait service + completed time? Is overnight package delivered overnight?
• Completeness: Everything customer asked provided? Mail order from catalogue company complete when delivered? Foods served table what customer ordered?
• Courtesey: How employees treat customers? Are catalogue phone operators nice + voices pleasant?
• Consistency: Same level service provided each customer each time? Newspaper delivered time every morning?
• Accessibility + Convenience: How easy obtain service? Does service representative answer calls quickly?
• Accuracy: Service performed right every time? Bank/credit card statement correct every month?
• Responsiveness: How well does company react unusual situations? How well telephone operator able respond customers' questions?

Perceived Quality

• Definition: Difference between customer expectations + delivered service/product.
• If service/product experience better expected = customer satisfied + quality perceived high.

Cost of Quality

• Cost quality used persuade top management fully supporting + participating quality improvement programs.
• Can used visible evidence progress such programs.
• Profitability best accomplished reducing cost poor quality + preventing defects.

Cost of Quality: Cost of achieving good quality

• Prevention costs: Costs incurred during product design.
• Appraisal costs: Costs measuring, testing + analysing.

Cost of Poor Quality

• Internal failure costs: Include scrap, rework, process failure, downtime + price reductions.
• External failure costs: Include complaints, returns, warranty claims, liability + lost sales.