A quality product or service is one which is fit for its intended purpose, and is produced at an acceptable cost. |
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The intended purpose of a product should be to satisfy customer needs.
There are three key elements of quality which influence a product or service's ability to satisfy customer needs :
- Quality of Design
- Quality of Conformance
- Quality of Reliability
| The key elements of Quality |
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A product needs to be designed to satisfy customer needs. Market Research including Product Testing are required to identify and understand customer needs, and ensure the designed product will satisfy them. In addition, costs of supplying the product to the market must also be considered. Quality of design is about ensuring that the needs of the customer can be satisfied, by a product that can be produced at an 'acceptable cost'.
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Conformance refers to the closeness with which the finished product or supplied service matches the specifications of the original design. Production control systems, including the processes of Quality Control and Quality Assurance, are implemented to ensure the products and services a business supplies into the market conform with design.
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Reliability is a measure of the ability of the finished product to provide trouble free performance in the field, over an acceptable time period. This final factor of quality is a function of both quality design and quality conformance.
If a business developes a quality design which its finished products and services do not conform to, they will not satisfy customer needs and will prove unreliable. Conversely, if the product / service conforms closely to a poor design, again overall quality will be poor in terms of it's reliability.
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Achieving quality costs, but not providing a quality product or service, costs even more. To emphasize this point we can identify four areas of cost created by inadequate quality :
The main internal costs are generated through production of products that fail to conform to design, resulting in:
- Scrap ( wasted material or product)
- Reworking ( additional production time spent repairing mistakes)
External costs are generated when a product, or service, fails in the field ( when being used by the customer). Cost will be incurred repairing, replacing and recalling products in the feild. In addition, research claims that a satisfied customer tells 3 others about their positive experience, yet a dissatisfied customer will tell 10 others of a products failure. Such negative publicity will bite hard into a companies reputation for quality, and subsequently their sales and profits. Alongside customer dissatisfaction, product failure in the field may cause damage and/or loss to the customer, for which the business may be required to provide compensation. For example, if the product is machinery, used by another company in their production, its failure may cause Down-time and subsequent loss of production.
These are the costs a business incurs in attempting to ensure quality via their quality control systems. Staff, equipment and other resources spent on inspection, measuring / evaluating and auditing raw materials, Work-in-Progress (WIP) and finished goods.
Of all the costs identified, investment in prevention of poor quality will provide the greatest return. Prevention costs are incurred through designing, and maintaining systems which ensure products are 'right first time', that production moves towards the ultimate goal of 'Zero Defects'. A company that spends heavily on prevention, it is argued, will eventually recoup the costs incurred. However a firm which does not invest in prevention will continue to incur the Internal, External and Appraisal Costs described above.
Inadequate quality, products that are not 'right first time', poor production systems, can all represent substantial costs as a percentage of a companies turnover. If poor quality is eliminated, then money will be saved, and profits will increase.
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