Quality Assurance 4

Quality Assurance 


In any business organization profit is the ultimate goal. To achieve this there are several approaches. Profit may be maximized by cutting costs for the same selling price per unit. If it is monopolistic business, without giving much of importance to the cost reduction programs, the price may be fixed suitably to earn sufficient profit. But to survive in a competitive business environment goods and services produced by a firm should have the minimum required quality. Extra quality means extra cost. so the level of quality should be decided in relation  to other factors such that the product is well absorbed in the market. In all these cases to have repeated sales and thereby increased sales revenue basic quality is considered to be one of the supportive factors. Quality is a measure of how closely a good or service conforms to specified standard.

Quality standards may be any one or a combination of attributes and variables of the product being manufactured. The attributes will include performance reliability appearance commitment to delivery time etc, variables may be some measurement variables like length width height diameter surface finish etc.

Improvements in quality help firms increase sales and reduce costs both of which can increase profitability. increase in sales often occur as firms speed response increase or lower selling prices and improve their reputation for quality products. similarly, improved quality allows costs to drop as firms increase productivity and lower rework. scrap and warranty costs.

Quality or the lack of quality affects the entire organization from supplier to customer and from product design to maintenance. Perhaps more importantly building an organization that can achieve quality is a demanding task, the following figure lays out the flow of activities for an organization to use to achieve total quality management (TQM). A successful quality strategy begins with an organizational culture that fosters quality followed by an understanding of the principles of quality and then engaging employees in the necessary activities to implement quality. when these things are done well the organization typically satisfies its customers and obtains a competitive advantage. The ultimate goal is to win customers. Because quality causes so many other good things to happen it is a great place to start.

Defining Quality

An operations managers objective is to build a total quality management system that identifies and satisfies customer needs. Total quality management takes care of the customer. The word quality does not mean the quality of manufacturered product only. It may refer to the quality of the process(I.e men material and machine) and even that of management. Where the quality manufactured product referred as or defined as quality of product as the degree in which it fulfills the requirements of the customer. It is not absolute but it judged or realized by comparing it with some standards.

The American society for quality (ASQ) defines quality as a subjective term for which each person has his or her own definition. In technical usage quality can have two meanings 1) the characteristics of a product or service that bear on its ability to satisfy stated or implied needs and 2)A product or service free of deficiencies. Obviously quality can be defined in many ways depending on who is defining it and the product or service it refers to.

Quality begins with the design of a product in accordance with the customer specification further it involves the established measurement standards the use of proper material selection of suitable manufacturing process etc quality is a relative term and it is generally used with reference to the end use of the product.

Quality is conformance to requirement or specifications

Quality is fitness for use.

Quality is defined as being about value.

Quality is the ability of the product to meet or exceed customer expectation.

Dimensions of product quality

The key dimensions of product quality are listed below:

1.Performance : The basic operating characteristics of a product; for example how well a car handles or it's gas mileage.

2. Features: the extra items added to the basic features such as a stereo CD or a leather interior in a car.

3. Reliability: the probability that a product will operate properly within an expected time frame that is a TV will work without repair for about seven years.

4. Conformance:The degree to which a product meets pre established standards.

5. Durability: how long the product lasts its life span before replacemwnt. A pair of L.L bean boots with care might be expected to last a lifetime.

6. Serviceability: the ease of getting repairs the speed of repairs and the courtesy and competence of the repair person.

7. Aesthetic: how a product looks feels sound smells or tastes.

8. Safety: Assurance that the customer will not suffer injury or harm from a product an especially important consideration for automobiles.

9. Other perceptions: subjective perceptions based on brand name advertising and the like.

These quality characteristics are weighed by the customer relative to the cost of the product. In general customers will pay for the level of quality they can afford. If they feel they are getting what they paid for them they tend to be satisfied with the quality of the product.

Dimensions of service quality

The dimensions of service quality differ somewhat from product quality. Service quality is more directly related to time and the interaction between employees and the customer. Evans and Lindsay identify the following dimensions of service quality.

1. Time and timeliness: how long must a customer wait for service and is it completed on time? For example is on overnight package delivered overnight?

2. Completeness: is everything the customer asked for provided? For example is a mall order from a catalogue company complete when delivered?

3. Courtesy: How are customers treated by employees? For example are catalogue phone operators at L.L bean nice and are their voices pleasant?

4. Consistency: Is the same level of service provided to each customers each time? Is your newspaper delivered on time every morning?

5. Accessibility and convenience: how easy is it to obtain the service? For example when you call L.L bean does the service representative answer quickly?

6. Accuracy: is the service performed right every time? Is your bank or credit card statement correct every month?

7. Responsiveness: How well does the company react to unusual situations,which can happen frequently in a service company? For example how well is a telephone. Operator at l.l. bean able to respond to a customer s question s about a catalogue item not fully described in the catalogue?

Benefits of quality to a firm

The following are the benefits of quality to a firm.

It gives a positive company image.

It improves competitve ability both nationally and internationally.

It increases market share which translates into improved profits.

Overall it also reduced costs which also translates into improved profits.

It reduces or eliminates product liability problems avoiding unnecessary costs.

It creates an atmosphere for high employee morale which improves productivity.

Implications of Quality

The major implications of quality to a firm are as follows:

1.Company reputation: As organization can expect it's reputation for quality be it good employment practices and supplier relations. Self promotion is not a substitute  for  quality products.

2. Product liability: The courts increasingly hold organizations that design produce or distribute faulty products or service liable for damages or injuries resulting from their use. Legislation such as the consumer product safety act sets enforces product standards by banning products that do not reach those standards. Impure foods that cause illness night gowns that burn tires that fall apart or auto fuel tanks that explode on impact can all lead to huge legal expenses large settlement or losses and terrible publicity.

3. Global implications: in this technological age quality is an international as well as operations management concern. For both a company and a country to compete effectively in the global economy product must meet global quality design and price expectations. Inferior product harm a firms profitability and a nation's balance of payments.

Malcolm baldrige national quality award

Cost of quality (COQ)

According to legendary quality guru Armand feigenbaum quality costs are the foundation for quality system economics. Quality costs have traditionally served as the basis for evaluating investments in quality programs. The costs of quality are those incurred to achieve good quality and to satisfy the customer as well as costs incurred when quality fails to satisfy the customer. Thus quality costs fall into two categories the cost of achieving good quality also known as the cost of quality assurance and the cost associated with poor quality products also referred to as the cost of not conforming to specifications.

Two recent trends are driving a renewed interest within organizations for measuring quality costs. First the most recent version of ISO 9000 emphasize measurement and requires that quality improvements for quality cost data in order to determine project success.

The major categories of costs quality are explained briefly: 

Cost of quality

Prevention cost Appraisal costs Internal failure costs External failure costs.

Prevention costs are the costs of trying to prevent poor quality  products from reaching the customer. Prevention reflects the quality philosophy of do it right the first time. The goal of a quality management program. Examples of prevention costs include.

--Quality planning costs: the costs of developing and implementing the quality management program.

--Product design costs. The costs of designing products with quality characteristics. 

--process cost: the costs expended to make sure the productive process conforms to quality specifications.

--Training costs:The costs of developing and putting on quality training programs for employees and management.

--Information costs:the costs of acquiring and maintaining ( typically on computers) data related to quality and the development and analysis of reports on quality performance.

Appraisal costs are the costs of measuring testing analyzing and evaluation materials parts products and the productive process to ensure that product quality specifications are being met . Examples of appraisal costs include:

-Inspection and testing: The costs of testing and inspecting materials parts and the product at various stages and at the end of the process.

- test equipment costs: the costs of maintaining equipment used in testing the quality characteristics of products.

- operator costs: the costs of the time spent by operator s to gather data for testing product quality. To make equipment adjustment to maintain quality and to stop work to assess quality.

Appraisal costs tend to be higher in a service organization than in a manufacturing company and therefore are a greater proportion of total quality costs. Quality in service is related primarily to the interaction between an employee and a customer. Which makes the cost of appraising quality more difficult. Quality appraisal in a manufacturing operation can take place almost exclusively in house appraisal of service quality usually requires customer interviews surveys questionnaires and the like.

Internal failure costs: are incurred when poor quality products are discovered before they are delivering to the customer. Examples of internal failure costs include:

Scrap costs: the costs of poor quality products that must be discarded including labor material and indirect costs

Rework cost: the costs of fixing defective product to conform to Quality specifications.

Process failure costs: the costs of shutting down the productive process to fix the problem.

Price downgrading costs: the costs of discounting poor quality products that is selling products as seconds.

External failure costs are incurred after the customer has received a poor quality product and are primarily related to customer service. Examples of external failure costs include.

Customer complaint costs: the costs of investigation and satisfactorily responding to a customer complaint resulting from a poor quality product.

Product return costs: the costs of handling and replacing poor quality products returned by the customer. In the United States it is estimated that product returns reduce company profitability by an average of 4% annually.

Warranty claims costs: the costs of complying with product warranties.

Product liability costs: the litigation costs resulting from product liability and customer injury.

Lost sales costs: the cost incurred because customer are dissatisfied with poor quality and do not make additional purchases.

Post a Comment