Quality
GCSE Business Studies
tutor2u™
Revision Presentations 2004
Introduction
Quality is one of the most important challenges facing a business
Nearly all markets are becoming more competitive:
 Customers are more knowledgeable
 Customers are more demanding
 Customers are more prepared to complain about poor quality
 Customers can easily share information about poor quality (e.g. via email or
internet discussion groups)
If a business can develop a reputation for high quality, then it may be
able to create an advantage over its competitors
tutor2u™
GCSE Business Studies
What is Meant by Quality?
Quality is about meeting the needs and expectations of customers
Think about your needs and expectations as a customer when you buy a
product or service. These may include
 Performance
 Appearance




Availability
Delivery
Reliability
Price
If a product or service meets all those needs - then it passes the quality
test. If it doesn't, then it is sub-standard.
tutor2u™
GCSE Business Studies
Examples of Poor Quality
Product fails – e.g. a breakdown or unexpected wear and tear
Product does not perform as promised
Product is delivered late
Poor instructions/directions for use
Customer service is hard to find (e.g. telephone not answered)
Business employees appear rude or uninterested in the customer
tutor2u™
GCSE Business Studies
Costs of Poor Quality
There are many costs of poor quality, including:
 Lost customers (expensive to replace – and they may tell other people about
their bad experience)
 Cost of reworking or remaking product
 Costs of replacements or refunds
 Wasted materials
Poor quality is a source of competitive disadvantage
 If competitors are achieving higher quality, then a business will suffer
tutor2u™
GCSE Business Studies
Quality Management
Producing products of the required quality does not happen by accident
There has to be a production process which is properly managed
Ensuring satisfactory quality is a vital part of the production process.
Quality management is concerned with controlling activities with the aim
of ensuring that products and services are fit for their purpose and
meet the specifications
There are two main parts to quality management
 Quality assurance
 Quality control
tutor2u™
GCSE Business Studies
Quality Assurance
Quality assurance is about how a business can design the way a product
of service is produced or delivered to minimise the chances that output
will be sub-standard
The focus of quality assurance is, therefore on the product
design/development stage
Why focus on these stages?
 If the production process is well controlled - then quality will be "built-in“
 If the production process is reliable - there is less need to inspect production
output (quality control)
tutor2u™
GCSE Business Studies
Quality control
Quality control is the traditional way of managing quality
Quality control is concerned with checking and reviewing work that has
already been done
For example, quality control includes:
 Inspection
 Testing
 Sampling.
Quality control is mainly about "detecting" defective output - rather than
preventing it
Quality control can also be a very expensive process. Hence, in recent years,
businesses have focused on quality management and quality assurance.
tutor2u™
GCSE Business Studies
Total Quality Management (“TQM”)
TQM is essentially an “attitude”
Whole business understands need for quality and seeks to achieve it
Everyone in workforce s concerned with quality at every stage of
production process
Quality is checked by workers and not inspectors
tutor2u™
GCSE Business Studies
Advantages of TQM
Puts customer at heart of production process
Motivational since workers feel more involved and are making decisions
Less wasteful than throwing out defective finished products
Eliminates cost of inspection
tutor2u™
GCSE Business Studies
Research & Development and Quality
Research and development - process by which:
 New products are developed which meet customer needs and wants
 Existing products are improved to reflect customer feedback
Types of feedback from quality control
Customer complaints
Production problems
tutor2u™
GCSE Business Studies