In today's rapidly changing and yet more competitive international market quality has become something that more and more businesses are focused on. The reasons are very clear. In this market your strategy can either be to go about the price route (i.e. competing on price) or justifying the extra price by providing better quality product so that the customer gets the feeling of getting more out of the good or service for the price he pays.
On top of the obvious challenge customers today are much more demanding due to the amount of the information that is accessible to them as well as the fact they customers can much more easily share their information on poor quality of the product or service and therefore businesses have to take even further investments into the quality management as quality control in the supply chain.
Before the Industrial Revolution in the UK all the work in the manufacturing of the product was performed by one man and its reputation as well as pride for his craftsmanship usually assured the quality standards of the product. However, with introduction of the division of labour, early models of supply chain started to arise therefore killing the whole ‘natural' quality control as there was no direct link to a craftsmanship as each worker was only doing his own part and therefore had no direct responsibility for the end product. As a result of the quality drop in the transition from craftsmanship to the supply chain manufacturing the quality inspection was introduced. George Stanley Radford in his “The control of Quality in Manufacturing” introduced the idea of the vast importance of quality considerations during a very early stage of product development. Radford, G. S. (1922) Further development and recognition of the importance of the quality management has led to the idea of linking the costs of prevention (i.e. quality management associated costs) to the costs related to the lack of quality.
It can be argued that there are four main factors that determine quality and if each one is managed and controlled the product or service may achieve superiority in the market. The first on being Quality of Design and it is vastly important for the designers to satisfy the needs and wants of the consumer and the kind of features that are important for various uses of the product. Secondly, Quality of conformance comes in place and it relates to the level of conformance between the product and its intended design. Ease of use usually refers to the instructions and forwarding thinking of the manufacturer. Failure to provide good instructions and directions of how the product should be used may lead to further costs arising from customers returns as well as some legal issues regarding the injuries that may have accrued. Finally in the modern world when we purchase a product we usually are attached to some form of service as well there for quality management must take into account both parts of the purchase to insure the quality therefore producers need to concentrate on this even further, because when product may occasionally fail it is up for the quality of the service to make up for that failure and still leave the customer if not satisfied at lease less disappointed.
Quality management on the other hand can be divided into two main approaches: Quality control and Quality assurance. Quality control can be defined as the process of inspecting product to ensure that they meet the required quality standards. The main idea behind quality control is that it is detecting defective output. As a result, in the process the consumers do get the quality control that they desire, however this is a method which deals the consequences rather than the problem itself. The quality control and inspection can be divided into three main points during the production:
• Receiving raw material
• During the production process
• Final check before delivery
The main problems associated with quality inspection its cost and as mentioned above are, it is dealing with the symptoms rather than with the disease. The cost arises from the fact that extra labour has to be hired in order to inspect the quality and this may also create a problem of workers not doing the relatively easy checks themselves as they now that its quality inspectors job which essentially means that the problem is passed through the manufacturing and when detected it may be too late and that carries extra costs within.
This brings us to quality assurance and it can be defined as the processes that ensure production quality meets the requirements of customers. This approach is much more modern and has developed during the 1950s. The quality assurance comes from the logic, that if manufacturing process as well as after-sale service are designed carefully and have many failures preventing mechanisms than quality of the product will be of the highest standard. Therefore, quality assurance unlike the quality control is focused on the processes rather than the output itself.
If taken one step further quality assurance can evolve into Total Quality Management which is a constant pursuit of quality that involves everyone in an organization. The main idea behind the idea is making customer satisfaction a key milestone in the organisation and its constant and continuous improvement the main area for company development. In order for Total Quality Management to be effective all its components have to be fulfilled. Firstly, the company has to understand exactly what customers expert from the product as well as the industry that their company is in. This sometime requires major expenses as well as a lot of data analysis as in some industries customers are not willing to share their expectations and wants, moreover in today's world customers may change their expectations very quickly depending on the trends in the industry and sometimes even in the other industries. Moreover, any business that plans to achieve customer satisfaction has to always ensure that it has the right resources and talent to unswervingly deliver the product or service which customer expect from them. Finally, the communication between the business and the customer is vital in building the desired customer satisfaction. In other words, customer need to understand exactly what your product or service is and what are you going to deliver exactly and perhaps even more importantly, what the product is not about and what it shouldn't be used for or with. The importance of satisfied customer is understood by any business and costs associated with attracting new customers are much higher in comparison to keeping the current ones. Therefore, more and more businesses invest into the total quality management and set it as a full-on mindset for the firm.
Also, it is important to understand that Total Quality Management requires much more than just understanding your customer needs. It also requires deep operations understanding and constantly improving them to satisfy those needs. The processes in the production of a good or delivering a service have to align with customer needs in order for them to be satisfied. Moreover, the processes have to deliver those outcomes that we have established from the customers and moreover the processes have to be very efficient in doing so that the firm can contain a competitive price and margins. Total Quality Management has been widely recognized and successfully implemented in many small and large organizations, giving them the edge in international as well as local competitiveness through the production of high quality products to satisfy customer needs (N.M Zakuan et al., 2008)
One of the key elements of the Total Quality Management is the employee empowerment. It allows employees to make advancements in the firm's operations by giving them ability and motivation to do so. Moreover, the quality at the source concept refers to the philosophy of making each worker responsible for its own work therefore removing the hard relationship that quality controllers had with the workers during quality control system. This system comes closest to give workers sense of pride for their work as they used to have before the Industrial Revolution.
Although benefits of the Total Quality Management are clear it can go terribly wrong if applied blindly. Many firms have tried to adopt the technique and failed because every market is different, and every business has to take into account its current position in the market as well as the competitors before making such large strategic decision. For instance, customer satisfaction may be too high of a cost to benefit and therefore not worth adopting the technique at all. Moreover, TQM requires a very strong leadership in order for the whole system to work as a whole, however this is a part which most business lack anyway and therefore adopting TQM will make the situation ever worse. Finally, one of the biggest disadvantages of TQM is the fact the cost related to training and support as well as flipping the whole mindset of the firm are immediate however benefits from them come much late on and from financial perspective not many firms can afford such long investments.
To conclude, there is a clear direct relationship between quality of the product and service and company's revenue. As well as revenue, quality management usually makes the operations much more efficient, which can vastly effect profitability as well as the position within the market. The importance of regulation has been established by majority of the free economies by introducing things like ISO 9001 as well as establishing awards like the European Quality Award and Baldrige Award in the US. It is also clear for the business that there is a return on investment when investing into quality control. The amount of capital that many firms spent on marketing and establishing relationship between the customer can be vanished in the matter of no time if the quality is not up to a presented and/or expected standard of the customer. Putting Total Quality Management may not be a solution for every firm, especially for the one straggling to produce stable cash flow, however for some of the more established players in different markets It can be a major win in the long-term which will make sure that the competition is left far behind and customers are as loyal as the can be. Moreover many firms can be dragged into short term solutions for quality management (due to the agent-principal problem) rather than rethinking the whole process and thinking for the future, unfortunately many managers take the quote of John Maynard Keynes to literarily “In the long run we are all dead”.
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