2.35 Managing Quality

What is ‘quality’?

Simple definition = how good or bad or well made a product is

If products are poor quality:

  • customers won’t buy them – revenue and profit will fall
  • customers will go to your competitors
  • costs will increase as the business has to deal with complaints and returns
  • reputation will suffer
  • in extreme cases, customers could be seriously injured or worse (imagine if a parachute was poor quality)

A business achieves quality in 2 ways:

  1. Quality Control – at the end of the production process products are inspected. It detects faulty output rather than preventing it, therefore there could be a lot of waste.
  2. Quality Assurance – minimises faulty output as quality is built into every stage of production, not just the end product. Each worker is responsible but they may have different standards and so consistency is an issue.

Try this question:

Discuss the benefits to a business of using quality assurance (6)

Having a quality focus helps a business to reduce costs, and lower costs mean that the business can compete on price (by being able to charge lower prices for its products) or generate more profit for owners and / or shareholders.

Remember, quality is also a way of adding value.