Quality Management (DP IB Business Management)

An Introduction to Quality Management

• Quality management involves a business carefully considering the characteristics and features of a product that satisfy the needs of customers and ensuring that it has effective systems and procedures to meet these

• Businesses need to maintain a level of quality that continues to attract and retain customers if they want to remain successful

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

Diagram: 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

Measuring Quality

• Businesses can measure the quality of their output in a range of ways

• In addition factors such as customer satisfaction, customer loyalty and market share can provide useful indications of customer experiences and perceptions of quality

  • Customers satisfied with quality are less likely to make complaints and are likely to give positive feedback in surveys

  • High quality can drive repeat purchases

  • Increased market share may demonstrate satisfaction with quality over that offered by rival products/services

Categories of Quality Management

•  A businesses approach to quality management falls into one of two categories

  • Quality control involves inspecting the quality of output at the end of the production process

    • Workers focus on maximising output

    • Products that do not meet standards are rejected before they are released for sale

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

    • Workers check their own work and, sometimes, the work of others at 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 (TQM)

An Evaluation of Approaches to Quality Management

Quality Assurance Using Quality Circles

• Quality circles involve  groups of workers meeting regularly to identify and solve quality problems in the production process

  • Groups are made up of volunteers from different departments

  • Meetings are typically chaired by a senior leader

  • Members work together to execute and manage solutions

An Evaluation of Quality Circles

Quality Assurance Using Benchmarking

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

• Benchmarking can be internal or external

Internal benchmarking

• Comparison of different functions within a business such as finance and 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

External benchmarking

• Comparison of key performance indicators (such as product recalls) against those of market leaders in an industry

• International benchmarking compares key performance indicators against those of market leaders overseas

An Evaluation of Benchmarking

Quality Assurance Using 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

An Evaluation of TQM

The Benefits of Lean Production & TQM

• Implementing lean production and TQM can have a positive impact on various aspects of a business

  • It can lead to higher profits as a result of greater efficiency, less waste and lower costs

  • Fewer errors can lead to improved customer satisfaction and greater customer loyalty

Positive Impacts of Lean Production and TQM

• However, successful implementation of lean production is likely to require a cultural shift and ongoing efforts to sustain improvements

  • Commitment to careful recruitment, training and engagement of employees 

  • 'Getting it right first time' should be at the heart of all processes

• It also needs strong relationships with suppliers

  • Defect-free components must be delivered on-time, in the right quantities

  • Trust needs to be developed with a small number of suppliers, emphasising quality rather than cost alone

National & international Quality Standards

• Quality standards include national and international benchmarks that demonstrate a businesses commitment to quality

  • They are administered by independent bodies that carry out stringent tests to ensure standards are met or exceeded

  • Businesses awarded these standards are revisited regularly to ensure that standards are maintained

Diagram with a Selection of Quality Standard Accreditations

The Importance of Quality Standards

• Achieving accreditation reassures customers of their commitment to quality

• Accreditation also provides a range of further benefits

• Having quality accreditation can set a business apart from competitors

• Obtaining quality accreditation can allow a business to enter these markets 

• They reduce the risk of legal issues and penalties