Methods of Quality Management (Cambridge (CIE) A Level Business): Revision Note

The importance of quality

• Quality considers the characteristics and features of a product that satisfy the needs of customers

• Businesses need to maintain a level of quality that attracts and retains customers if they want to remain successful

• Customer perceptions of quality are related to a range of product or business features

Factors that influence quality perception

• Customers may consider products or services to be of good quality if they

  • Look good and are sold by a reputable business or brand

  • Are reliable and durable

  • Are safe and fit for purpose

  • Receive good customer service, including after-sales service

• If quality is not maintained, then businesses may be at risk of

  • Losing their competitive advantage and customers to other brands that offer better quality goods or services

  • Experiencing higher costs due to having to replace faulty or defective goods

  • Gaining a poor reputation as customers spread poor reviews about the business to others

• In some countries laws protect consumers so businesses need to ensure that the products they sell are free of faults or defects to avoid harming customers or their reputation

Quality control

• Quality control is a traditional method of checking quality at the end of the production process by using quality inspectors to find faults

• It is not possible to achieve perfection in every production process

  • E.g. there will always be some variation in terms of materials used, production skills applied or reliability of the finished product

The impact of quality control on business

1. Reduces risk of poor-quality products reaching customers

• Helps maintain the business’s reputation and avoid customer complaints

2. Wasted output may increase

• Faulty items are found after production, so time and materials may already be wasted

3. Higher inspection costs

• Employing inspectors adds to labour costs, especially in large-scale operations

4. Low training costs

• Limited staff training is needed as inspectors check quality rather than the employees themselves

5. Less responsibility for workers

• Employees may depend on inspectors instead of taking ownership of quality themselves

6. Inconsistent quality improvements

• Problems are found but not always prevented, so the same issues may continue to occur

Quality assurance

• Quality assurance involves inspecting the quality of production throughout the process

  • Workers check their own work and, sometimes, the work of others throughout the various stages of production 

• Some business take a whole-business approach to quality assurance, with systems such as quality circles, benchmarking and total quality management

The impact of quality assurance on business

Total Quality Management (TQM)

• Total Quality Management (TQM) places quality at its core and makes every worker responsible for quality throughout the business

  • Quality is considered from the customer's perspective

  • Inefficiency and wastage is removed from every business activity or function, including those that are not directly related to production

Advantages and disadvantages of TQM

The importance of benchmarking

• Benchmarking involves a business comparing its quality and performance with market leaders within the same industry

1. Internal benchmarking

• Comparison of different functions within a business, such as finance or marketing

  • Performance 

    • Comparison of key performance indicators such as labour productivity or labour turnover rates

  • Process

    • Comparison of business operations and processes such as call centre queue times or delivery times

2. External benchmarking

• Comparison of key performance indicators, such as the number of product recalls, against those of market leaders in an industry

Evaluating benchmarking