2.4.4 Quality Management

Question 1

Quality

Answer 1

• product meets the specifications that the firm has set

- meets customer requirements ‘fit for purpose’

Question 2

How to meet quality ?

Answer 2

• Find out what customer wants (MR)
• specify what product does (advertising, packaging)
• make sure specifications are achieved

Question 3

Why is quality important ?

Answer 3

1. customer satisfaction = repeat business, loyalty
2. opportunity to grow= market share (revenue)
3. less waste = lower costs
4. avoid complaints = better image and reputation
5. more competitive = differentiates
6. premium prices = adding value
7. reduce people sensitivity to price

Question 4

How is quality measured?

Answer 4

control : inspector
assurance: everyone goes through

• recommendations/reviews = returning customers/repeat purchasing / no of exchanges or returns
• rate of stock turnover
• commission/tips
• reward schemes/loyalty cards

Question 5

Service industry measuring quality

Answer 5

• customer satisfaction
• accurate billing
• speed of response

Question 6

Manufacturing industry measuring quality

Answer 6

No of products with defects

Wastage

Question 7

Approaches to quality management

Answer 7

1. Quality control
2. Quality assurance
3. Quality circles
4. TQM
5. Kaizen

Question 8

Quality control &; benefits

Answer 8

• traditional, inspector, finished, meet standards
• every product, sample each batch (random sample)
• meet required standards
• guarantee no defective item leaves
• requires little staff training

Question 9

problems with quality control:

Answer 9

• inspector = expensive = poor quality built in
• mistakes are inevitable = greater wastage and cost
• employees may not take care of work (lack of responsibility)= not best quality
• faulty products can slip through

Question 10

Quality assurance & benefits

Answer 10

• processes ensure production quality meet requirement of customer
• throughout process
• faults prevented via self checking (reject substandard)
• right first time/ 0 defects
• motivation & empowerment
• reassurance for customers (higher quality service pay more)
• quality system = each stage in production process

Question 11

problems with quality assurance

Answer 11

• requires training
• tick boxes rather than care for customer experience
• doesn’t promise high quality
• encourage complacency (quality should be kept moving)

Question 12

quality circles

Answer 12

-small groups of workers same area of production - meet regularly to study/solve production problems

Question 13

Factors influencing success of quality circle/problems:

Answer 13

1. mutual respect = positive industrial relations
2. action/implementation
3. democratic leadership

Question 14

TQM

Answer 14

Total quality management

• approach/philosophy to quality
• employees in quality improvement process (contribute to product/service)
• constantly ways to improve
• encourage intrapraneurship

Question 15

Features of TQM

Answer 15

• all employees = equal importance (motivate=buy in)
• quality considered from design to sales (whole organisation)
• customers internal and external (part of organisation)
• less productive as assessing quality
• need to establish quality ‘culture system’ = quality at centre of everything organisation does

Question 16

May resist TQM because…

Answer 16

• dont want to lose control
• managers resent authority being given to subordinate
• find it exhausting (happy with what doing)
• not believe it dont see why necessary
• need to invest in additional training

Question 17

How can managers help implement

Answer 17

• explain why necessary (communicate)
• provide training = feel supported
• rewards
• need to give it time

Question 18

benefits of TQM

Answer 18

• empowers and motivates staff
• lead to competitive advantage over time (always best)
• deeply rooted in company culture
• quality should show from design, manufacture and after sales service

Question 19

drawbacks of TQM

Answer 19

• everyone involved
• managers need to implement
• staff sceptical (lacks clear concrete programme)
• may be expensive = training needed to implement

Question 20

Autocratic leader

Answer 20

like to keep control

Question 21

Kaizen & advantages

Answer 21

LEAN

• Japanese philosophy of continuous improvement where firms should constantly seek to improve performance
• gradual, orderly and continuous improvement
• ongoing improvement involving everyone
• easier to adapt
• team work

Question 22

the philosophy;

Answer 22

• accepted by all
• 1 workers = 2 jobs (do it & is it the best)
• many small gradual changes = competitive adv effect
• staff = best resource (based around people and ideas)
• team working (cells and quality circle)
• empowerment (speed of decision making)
• performance targets
• improving quality (MR, design product, plan process)

Question 23

BPR:

Answer 23

Business Process reengineering

• redesigning key aspects of business from scratch
• scrap existing systems
• rethink/ clean slate
• attract new bosses
• ultimately = job loss

use:
- change product portfolio
- buying another business (change in ownership, technological change)

Question 24

Problems of implementing/limitations of Kaizen

Answer 24

• culture=management/workers resist change (motivation)
• training cost = change attitudes = expensive & takes time
• justfifying cost = opportunity cost of investment in time & training whilst = loss of output = hard to measure benefits
• diminishing returns: impact improvement, gets less over time and staff enthusiasm decreases
• radical solutions (not right for all situations, may need drastic action to survive)
• time

Question 25

Factors to consider/influences on which quality system:

Answer 25

- nature of business & nature of what making - scale of production system - finance available - time available - management style

Question 26

4 ways quality help be more competitive

Answer 26

1. USP 2. complaints= cost 3. add value = premium prices = profitable 4. lower cost = competitive

Question 27

competitive advantage through quality management

Answer 27

- quality = differentiate against competitors (USP) - point of promotion - reduces complaint/return = reduce cost - non-price stately so may not have to compete on price

Question 28

2 key elements to kaizen

Answer 28

1. based around people and ideas (not new technology) | 2. each change on own = little importance (if lots = cumulative effects substantial)

Question 29

good quality product will:

Answer 29

- high level of repeat purchase = longer product life cycle - brand building & marketing benefit spread from one brand to another - allow premium price - makes products easier to place (retailers stock products with good reputation)

Question 30

benefits of quality circles

Answer 30

- financial incentive = empowered and increase motivation, feel valued (difference, consultation) - everyones opinion is valued and respected = managers assembly line workers and engineers mix - membership voluntary - employees doing job = better idea of how to improve process = address known quality issues & identify better practices - cost savings - improve staff morale - take adv of knowledge of operations