QUALITY

1. QUALITY

2. What is quality? • Quality is all about the features of a product or service which will satisfy the requirements of the consumer. • A quality product or service has the features which a buyer looks for in a product. • The producer believes that a quality product is one which meets the standards set by the organisation

3. Possible quality features of a car for example • How It looks • Image • How many miles to the gallon • Reliability • Suitability • Value for money • Extras • warranty

4. Why is quality important? – If you provide a poor quality product what might happen? • Sales may decrease • Profit decreases • Less competitive • Future products or other existing products may be affected • Can lead to failure of the business

5. How do organisations ensure quality • Methods of Quality control • Traditional Quality Control • Quality Assurance • Total Quality Management (TQM) • Quality Circles

6. Traditional Quality Control • Quality Control is the basis of all quality methods – began to be introduced in the 1940’s when firms were becoming more competitive • Quality Inspectors employed to check other peoples work • The products are checked once they have been completed • Defective products are binned • Expensive way to do things are there is a lot of wastage due to finished products being scrapped

7. QUALITY ASSURANCE • This is all about trying to prevent poor quality products being produced in the first place • Every worker is responsible for their own quality – they quality inspect their own work • This means that at every stage of the production process quality is checked – then it is checked at the end too- so leads to less wastage • Each worker or team of workers must be satisfied with their part of the job before they pass it on

8. TOTAL QUALITY MANAGEMENT (TQM) • “Getting it right first time – every time” • Quality is inbuilt into every aspect of the organisation – from the cleaners right up to the Managing Director – everybody thinks quality • Everybody is responsible for creating quality in what ever they do – everybody is striving to look for improvements to quality • Each production operator must think of the next person as their customer and so provide them with a quality product • Customers opinions are sought and used to help improve the product/service

9. QUALITY CIRCLES • Quality circles are part of TQM – important part of TQM • Small groups of people, they meet to discuss their work – discussions aimed at solving problems and improving quality • Motivational – as workers involved in decision making – if you have motivated workers they will work hard and provide a quality product.

10. STOCK – BENEFITS TO HOLDING STOCK • GOODS ARE THERE WHEN THEY ARE NEEDED • IF YOU BUY IN BULK (LARGE AMOUNTS AT A TIME) – THEN YOU MAY RECEIVE A DISCOUNT FROM YOUR SUPPLIER – this allows your company to be more profitable and competitive

11. DRAWBACKS TO HOLDING STOCK • Stock may deteriorate – if you have stock for a long period of time it may go off and not be as good quality – so your product may not be of good quality • Money tied up in stock – if you are holding more stock than you need then you are tying up money that could be used elsewhere – even keeping the money in the bank where it will gain interest • The costs of holding stock – insurance in case of fire or theft etc, warehousing, the more stock you keep the bigger warehouse, the bigger the rent and security costs paying security firms etc to protect the stock.

12. STOCK CONTROL • Stock control is very important to successful production. It tries to ensure that the right amount of stock is held – NOT TOO LOW which could cause production to stop, NOT TOO HIGH which could cause a business to pay unnecessary costs or see stock deteriorate

13. DECIDE HOW MUCH STOCK TO HOLD • How quickly the stock is used – how much is used • How long it takes for stock to be delivered by suppliers – lead time • The shelf life of the stock – short shelf life keep enough to keep you going and make regular orders • How much space there is to hold stock

14. STOCK RECORD KEEPING • Careful records must be kept – ensuring no wastage, no theft and no money being tied up • Can use a database to keep a record of each type of stock being stored – in the database you will be able to find out how much is left in stock, how often it is used, when to re-order new stock etc • Records can also be kept manually but they are not so quick or efficient.

15. Levels of stock • Minimum Stock level – stock should not go below this level – if it does it could stop production • Maximum Stock level – stock should not go above this if it does you are holding too much stock and it is costing you money • Re-order level – takes into account lead time and stops you from going below your minimum level • Economic Level – this is the best stock level – not too much and not too little.

16. JUST IN TIME (JIT) • Fits into TQM and is the stock control method used by many TQM companies. • This is where stock arrives just in time to be used in production – no need to hold any stock – supplier will deliver to point of production so that it can be used straight away. • Producers produce just in time for customers to buy and so the finished goods get sent to customers straight away – so company doesn’t hold stock of finished goods

17. Advantages of JIT • Removes the need to hold stock which is expensive • Suppliers give assurances to the quality of stock • No costs of moving stock from the warehouse to production line • More space available for production

18. Disadvantages of JIT • Totally dependent on supplier – on quality and on delivery time • If deliveries don’t arrive – production stops • Might lose out on discounts for bulk buying