IGCSE Business Studies

4.3 Achieving Quality Production

Learning Outcomes

• What quality means; why it is important for all businesses

• Concept of quality control and how businesses implement quality control

• The concept of quality assurance

WHAT IS QUALITY AND WHY IS IT IMPORTANT?

What is Quality?

Quality is achieving a standard for a product or service which meets or exceeds customers expectations

Task

• Think of a good/service that you consider to be good quality.

• What about it makes you think it is good quality?

• What attributes do we associate with good quality?

Key aspects of Quality

• Good design – looks and style • Good functionality• Reliable • Consistency • Durable• Good after sales service • Value for money

Can you add any more?

Why is good quality important?What benefits will it bring?

Benefits of a Quality Reputation

• Customer loyalty – they return, make repeat purchases and recommend the product or service to others.

• Retailers want to stock the product – achieve distribution

• As the product is perceived to be better value for money, it may command a premium price and will become more price inelastic

• Fewer complaints - returns and replacements lead to reduced costs

MANAGING QUALITY

Task – Look at the following companies….. 1. How can these businesses measure the level of

quality of their goods/services? (Key Performance Indicators)

2. What could these businesses do to check that its goods/services are good quality

How is Quality Measured?

• Failure or reject rates • Level of product returns • Customer complaints • Customer satisfaction – usually measured by a survey • Customer loyalty – evident from repeat purchases, or renewal rates

MANAGING QUALITY

Quality Control Vs Quality Assurance

Quality Control Quality Assurance• Aims to get the product

‘right first time’. • Every stage of the

production process is examined for ways to improve quality

• Documents are produced at each stage to outline the way to do tasks

• Workers are responsible for ensuring quality at their stage of production

• This is the traditional method used by firms to make sure goods are of the right quality

• Quality inspectors test products or samples of products at the end of the production process

Advantages of Quality Control

• Requires little staff training• Suitable when staff are unskilled or temporary• If all output is checked, faulty goods will not

reach the consumer

Problems with Quality Control

• Sometimes only a sample is taken• As faulty goods are often only detected at the

end of the production process a lot of goods have to be scrapped or reworked

• Staff can feel demotivated

Advantages of Quality Assurance

• Costs are reduced because there is less wastage and re-working of faulty products as the product is checked at every stage.

Advantages of Quality Assurance

• Workers will need to be better trained so they know how to check for quality

Quality of Services

• Quality of service is more difficult to measure:• Efficiency• Speed• Interaction with Staff• Cleanliness

• How can quality of services be measured?

How can Quality be Improved?

Watch the video‘Gordon Ramsay eats at Guiseppe’s’•What are the problems with Quality?•What suggestions would you make to Guiseppe’s on how they can improve quality? •How could they implement:•Quality Control•Quality Assurance