2.4.4 Quality Management

Quality Control

• Under traditional quality control, inspection of products takes place during at the end of the operations process. This is usually done by a quality control inspector who will check the product for faults. There is an underlying assumption that errors and defect are an inevitable part of production and that it is the purpose of quality control to check other people's work, find mistakes and put them right. For some products, there might be a sample inspections, or a target may be set, requiring a minimum percentage of the output to be without defects.
• This approach can be useful for manufacturing businesses that rely on unskilled or temporary staff. There are however several drawbacks. The system makes no attempt to find out why mistakes were made, as its purpose is to simply prevent faulty goods reaching the customer. It does not find every faulty product; this can mean dissatisfied customers and a costly returns and replacement process as well as a loss of reputation. The whole process reinforces the idea that mistakes are unavoidable and that the workforce do not need to worry about the quality as it is someone else's job to find mistakes. It is expensive in terms of implementation and wastage of stock and does not add value.

Quality Assurance

• Quality assurance works on a completely different assumption to quality control. It assumes that mistakes can be prevented and that it is possible to produce high quality output all the time. It involves much more than just an inspection of the end product. It seeks to improve quality throughout production processes as well as in the products and services themselves.
• Quality assurances implies a commitment to collaboration between everyone working in design, production and marketing. It involves working together towards improving quality and reliability at each stage in the production process. Everyone has to become conscious of the need for quality.
• This means focusing on prevention of defects, rather than just checking for any that have already happened. Some businesses have a zero-defects policy, which means getting the product right first time so that wastage is minimised, reducing costs as a consequence.
• Successful quality assurance comes through various approaches. It may mean changing the corporate culture of the business, so that all employees see quality as a high priority that influences all aspects of their work. A corporate culture that takes quality issues seriously will help to ensure that all employees feel involved and committed to maintaining quality in both the product and the production process. Systems are developed to deliver high standards at each stage of production.
• BENCHMARKING - involves comparing your business performance with other businesses that have excellent quality standards. The objectives of benchmarking are to see how other businesses reach their high standards to determine where improvements might be needed, and then use this information to improve performance.
• It also involves techniques and strategies discussed elsewhere in this book such as Kaizen, quality circles and TQM. Quality assurances strategies are an important element in the implementation of lean management. Many businesses will expect their own quality assurance standards to be applied in supplier businesses as well.

Quality Circles

• Quality circles meet up and discuss issues to do with quality, either in genera terms or to specifically to analyse a problem and to solve it. They include representatives from different departments in the organisation and from different levels in the hierarchy. They can be every effective as they bring together the people with knowledge and experience of production, such as the shop floor workers, and the people with the ability to implement new ideas, such as senior management.
• Besides improving and maintaining quality standards, quality circles have the added advantage of involving and empowering staff, which is likely to improve their motivation. In turn, this may lead to an improvement in productivity as well as quality. However, they only work if management fully support and participate in the process, listen to suggestions that are made and then act on them. It is important that involvement should be voluntary; staff who feel obliged or pressured to join in are less likely to make useful or relevant contributions. A common problem arises from managers setting up circle for which they appoint themselves as leaders; this stifles creative discussion and maintains the established hierarchy, which quality circles are suppose to break out of.

Total Quality Management

• TQM includes management, employees, design, production, sales and marketing departments. Everyone is committed to improving quality. Each department focuses on the needs of the next department in line and so strives to improve the quality at their stage of production in order to satisfy them. This means that the drive towards quality and reliability runs right through the whole production process.
• For TQM to work properly it needs committed leadership, as management must be wholeheartedly behind the scheme. As with other aspects of quality and lean production, employees need a degree of empowerment; they must have greater involvement in their work and greater responsibility to make changes. This requires a training process, as it takes time and effort to make employees aware of their changing role and to appreciate the importance of TQM. This business will need close relationships with customers to meet their needs, and with suppliers to raise the quality of inputs.
• Properly implemented TQM should lead to a range of benefits for the business, including a competitive advantage. The quality of its products or services should improve, leading to increased customer satisfaction, repeat purchases and greater brand loyalty. Profitability should improve as costs decrease and productivity improves from a more motivated workforce.
• The downside is that TQM can be time consuming and a costly system to set up and there may be resistance from people in both management and production, who may fear change. The new systems and training needed will inevitably cause some disruption and be expensive, and it may not prove effective for all businesses. Yet the potential benefits are considerable.

Continuous Improvement (Kaizen)

• Kaizen is the Japanese term for continuous improvement. It summarises a whole company approach to quality control. Kaizen focuses on numerous small improvements rather than sudden or radical change. It is about gradual evolution rather than sudden revolution, seeing more benefits and sustainability in making small improvements to 100 things rather than improving one thing by 100% when problems occur. They key word in Kaizen is 'every' because it involves everyone in everything.
• Everyone in the business is involved in the search for improvements to both the product and the process of production. They each take it upon themselves to monitor and improve quality wherever possible. Individual improvements are small and may seem trivial, but they are spread out throughout the business. They add up to a continually improving product or service. Customers benefit from a better quality product. Quality circles are just one aspect of this process.
• Kaizen is only effective when everyone participates and the management is wholeheartedly in support. Staff at all levels are given some control over decision making, with a degree of empowerment, appropriate training and access to detailed information about the company. This encourages commitment and interest, leading to job satisfaction, motivation and an increase in productivity.

Competitive advantage from quality

• in a competitive market, quality can be an important source of quality advantage, enhancing brand image. Consumers may prefer to buy a product that is perceived to be differentiated by better quality than rival products. Better quality not only encourages sales but also leads to customer loyalty and a good reputation. Where a strong reputation for quality means that a premium price can be charged, businesses can gain from increased profit margins. Another aspect to this it that improved quality mean less wastage and therefore reduced costs, which again improves profitability. Every defective product has cost the same to produce as a good one but cannot be sold to raise revenue.
• Most customers will understand that better quality often entails paying a higher price. They will see a trade-off between price and quality in the range out products available to them. In fact, quality assurance, TQM and continuous improvement may all help to give a competitive advantage and to add value in ways to enhance the reputation and performance of a business.