Quality

• Learning Aim- to understand quality systems and the importance of quality to a business.

• Success Criteria – To explain the effect of good/bad quality on a business

Challenge

• Follow the instructions to create your hat.

Step 1 – Fold the paper in half

Step 2 - Fold down each side to make trinagles

Step 3 - Fold the bottom flaps up

Quality• Check each-others hats• Who has the best• Which is the best quality?• How could we improve quality?• How could we ensure quality

across the classroom• This is what we will learn today

Why is quality important?Think of your mobile phoneYou drop itOpen it Close itUse the buttonsFiddle with itHundreds of times a dayIf it wasn’t high quality it would breakYou would not recommend it to your friendsThe company would lose sales

The importance of Quality

• Click pic for video

What is Quality?

• Quality is subjective –a matter of personal opinion –and views of it will vary from individual to individual.

• Quality: Those features of a product or service that allow it to satisfy (or delight) customers.

• Think of 1 product that you think is high quality

How to measure quality?• Tangible measures of quality –appearance,

reliability, durability, functions (added extras), After-sale service: cost, promptness and effectiveness, repair and maintenance needs

• Intangible measures of quality –Image and brand (e.g. Cadbury), reputation (e.g. The Times newspaper), exclusiveness (e.g. Chanel)

Benefits of having a quality system

• Impact on sales volume –a business is more likely to retain customers who are happy with the quality of their products - Waitrose

• Creating a unique selling point –businesses can use the level of quality as a USP for their product – The Ritz

• Impact on selling price –businesses can charge a higher price if their goods and services are of high quality – Hotel Chocolat

Why might

they be introducing special deals???

Benefits of having a quality system

• Cost reductions –a quality system can reduce the amount of wastage and therefore the business’s costs

• The firm’s reputation –A good reputation is important for a firm’s competitiveness/profitability. – Cadbury Salmonella scare

Quality Control & Quality Assurance

Quality control where finished products are checked by inspectors to see if they meet the set standard.Quality assurance where quality is built into the production process. For example, all staff check all items at all stages of the production process for faults. In this way everyone takes responsibility for delivering quality. Successful quality assurance results in zero defect production.

What’s the difference?Quality Assurance Quality Control

A medium to long term process, cannot be implemented quickly

Can be implemented at short notice

Focus on processes, how things are made or delivered.

Focus on outputs work in progress and finished goods

Achieved by improving production processes

Achieved by sampling and checking (inspection)

Targeted at the whole organisation Targeted by production activities

Emphasises the customer Emphasises required standards

Quality is built in to the product Defect products are inspected out.

Quality at VW (click pic for video)

Managing a Quality system

• Costs – Quality procedures are expensive to set up. Continual monitoring of production involves significant costs.

• Training – Any system of quality relies on a well trained workforce. Training can be costly.

• Disruption to production – Workers need to be trained before new systems are introduced

Value for money• Some products and services are

marketed as ‘basic’, having none of the extra features and benefits of more expensive alternatives

• Even though it may be ‘low quality’ in terms of style or features, these products still give good value for money for their overall level of quality.

Value for money

• Select one company that benefits from basic quality products. How does this affect the quality bullet points below?

• Improves sales?• Creates a unique selling point?• Impact on Price?• Improves companies reputation?

Quality

• Learning Aim- to understand the concepts of TQM, Kaizen, and quality standards

• Success Criteria – To explain the importance for businesses

Recap – Intangible Quality

Intangible Quality – can be subjective

Tangible Quality

But quality can be measuredFailure or reject ratesLevel of product returns Customer complaintsCustomer satisfaction – usually measured by a surveyCustomer loyalty – evident from repeat purchases, or renewal rates

Total Quality Management• TQM is an example of a Quality

Assurance system. • It is based on the principle that

everyone within a business has a contribution to make to the overall quality of the finished product or service.

Total Quality Management

Zero Defects

Continuous Improvement

ConsistencyClear Goals

Committed Staff

TQM - Issues

• TQM is not an easy concept to introduce into businesses - In fact - many attempts to introduce TQM fail!

• It requires that management give employees a say in the production processes that they are involved in.

• So "empowerment" is a crucial part of TQM. The key to success is to identify the management culture before attempting to install TQM.

Kaizen

Kaizen

• Kaizen , or ‘Continuous Improvement’ is a policy of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.

• This approach assumes that employees are the best people to identify room for improvement, since they see the processes in action all the time.

• A firm that uses this approach therefore has to have a culture that encourages and rewards employees for their contribution to the process.

ISO 9001

• Awarded to Businesses in the EU• The award does not prove that every

product produced or service provided by the business is of good quality. It is an indication that a business has a system of quality in place that has relevant targets set and activities ready to deal with a quality problem.

Click for video hyperlink

BS5750

• BS5750 is a British Standard for quality assurance and ISO 9000 is the EU equivalent.

• This approach was very common in the 1980s and 1990s and many major organisations would only buy products and services from firms that possessed BS5750 accreditation.

• Furthermore, just because a firm holds BS5750 and is delivering a consistent service, it does not guarantee that the service is better than a firm that does not have the award.

CE Marking• CE marking is a key indicator of a

product’s compliance with EU legislation and enables the free movement of products within the European market. 

Click for video hyperlink

Royal Seal of Approval

• Royal Warrant - video• Some British firms are fortunate to gain a

‘Royal Warrant’, which allows them to state that they are endorsed by Royal Appointment to Her Majesty the Queen, to the Duke of Edinburgh or to the Prince of Wales. This accreditation will be proudly displayed on the product packaging and on the firm’s correspondence and marketing literature.

• List of companies with a royal warrant

Activity

• Choose a company from the list and research how quality helps their business. Think about :

• Tangible/intangible quality• Benefits of quality (increased sales,

reputation?)• Quality control & assurance• Quality standards• TQM/Kaizen• Are employees involved in quality?• How do they manage quality?