A quick Internet search will provide you with an interesting insight into the meaning of quality. For the Oxford English Dictionary, for example, quality is “the standard of something as measured against other things of a similar kind; the degree of excellence of something”. The Business Dictionary defines manufacturing-related quality – our main focus here – as “a measure of excellence or state of being free from defects, deficiencies and significant variations, brought about by the strict and consistent adherence to measurable and verifiable standards to achieve uniformity of output that satisfies specific customer or user requirements”. Finally, ISO 9000 defines quality simply as “the degree to which a set of inherent characteristics fulfils requirements”. These requirements are the needs or expectations, generally implied or obligatory, of interested parties such as customers, suppliers and society.
For us, the quality of a product or service depends on an exchange between two persons, one supplying the product or service and the other receiving the product or service. The supplier and the customer can have different views on what quality is and this may lead to misunderstandings and disputes. In that sense, quality can be understood as “the conformance with customers’ requirements or fitness for purpose”.
The first point to note is that it is the customer who defines whether a product is fit for use or not. If the characteristics of a product or service do not match those required by the customer, it will not be a quality product for the latter. For example, a limousine with high gas consumption will not be a quality product for someone looking for a small car with low gas consumption. A supplier can prepare specifications for his/her product based on what is perceived as the requirements of customers and manufacture products conforming to those specifications. However, if the conforming products are found to be unfit for use by the users, they would be considered defective products; in this case, the specifications have failed to take fully into account the needs of the consumers. This brings us to the adage that the customer is king.
Quality is not absolute but relative. A product may be of good quality for someone, but of poor quality for someone else. For instance, one person may be comfortable with high-heeled shoes while another may prefer flat shoes. As pointed out by Snyder, quality is all about the customer’s perception of excellence and our response to that perception. It is measured solely by its utility to one audience – the customer.
The second point to note is that customers’ requirements change over time as purchasing power increases or as more innovative products are made available on the market. A customer who was satisfied with a black-and-white television set in the past now goes for a colour television set with a flat screen.
Quality or fitness for purpose is usually defined by quality of design and quality of conformance. However, for products with a long life such as computers and refrigerators, which require after-sales service, there are two other parameters. These are the availability for use (the product should not break down often and should work for a reasonable period before breaking down again) and field service, which should be prompt and performed with integrity by competent personnel.
When talking about quality, the term ‘grade’ comes to mind; it is defined in ISO 9000 as the “category or rank given to different quality requirements for products, processes or systems having the same functional use”.
Some examples are the class of airline ticket and category of hotel in a hotel guide.
Quality has many dimensions and these have been defined by Garvin (1987) as follows:
• Performance, which refers to a product’s main operating characteristics;
• Features, which are extras that supplement the main characteristics;
• Reliability, which reflects the probability of a product malfunctioning or failing within a specified period;
• Conformance, which is the degree to which a product’s design and operating characteristics meet established standards;
• Durability, which is the amount of use before the product deteriorates;
Serviceability, which is dependent on the service team’s speed, courtesy, competence and the product’s ease of repair;
• Aesthetics, which is linked to appearance and impression;
• Perceived quality, which is linked to the reputation of the brand.
The ISO 9000 definition of quality, i.e. “degree to which a set of inherent characteristics fulfils requirements”’, is equally applicable to a service. While it is easy to define and measure the characteristics of a hardware item, the service being an intangible item is difficult to define and measure.
Parasuraman, Zeithaml and Berry (1988) have defined the following generally acceptable service characteristics and have given them the acronym RATER:
• Responsiveness: willingness and/or readiness of employees to help customers and to provide prompt service, timeliness of service.
• Assurance: knowledge and courtesy of your employees and their ability to convey trust and confidence, viz. competence, trustworthiness, inspiring confidence.
• Tangibles: physical appearance of the service such as facilities, tools, equipment, appearance of servicing personnel and communication materials.
• Empathy: provision of caring, individualized attention to the customer, giving the customer information in a language he or she understands, understanding the customer’s specific needs.
• Reliability: the ability to perform the promised service dependably and accurately, e.g. performing the service right the first time, giving accurate information in the billing.
In the marketplace, the winners will be those who can give products or services that are better (in terms of quality), cheaper (in terms of costs) and supplied more efficiently (delivered in time or provided with a timely after-sales service).
‘Quality of design’ needs to be differentiated from ‘quality of conformance’, which is the level at which products or services conform to the quality of design. A higher quality of conformance can be achieved by the application of quality management. for example, after the design of the vehicle, a limousine or a small car, the application of quality control during the manufacturing process will minimize scrap and rework. By adopting a preventive approach, you will have more conforming products and less product recalls, resulting in lower costs. Thus, achieving a higher quality of conformance costs less as it reduces waste due to rework or discarding defective parts.
Quality costs that refer to the quality of conformance are divided into prevention costs, appraisal costs and failure costs. These are detailed below:
• Prevention costs. These are associated with activities designed to prevent poor quality in products and services. For example, a car company may decide to implement a quality improvement project, or to invest in education and training to avoid poor quality in the manufacturing line.
• Appraisal costs. These are associated with measuring, evaluating or auditing products and services to measure their conformance with requirements. For example, our car company wants to inspect the parts coming from suppliers to make sure they meet its quality requirements.
• Failure costs. These are associated with products or services not conforming to requirements or customer needs. Failure costs are divided into: a) internal failure costs, which occur prior to the delivery of the product or service; and b) external failure costs which occur after the product is shipped or while the service is being delivered. For the car company, an internal failure cost would be reworking a door which does not fit when the car is assembled. An external failure cost would result from a customer complaint following the malfunctioning of the gearbox.
You can measure your quality costs. These are actually not the costs of producing quality products but the costs associated with poor quality. They result from deficiencies in the product or service provided to customers and the associated activities which contributed to them. Briscoe and Gryna (2002) summarized the data on quality costs in medium-sized and large firms as follows:
The quality related costs are much larger than are shown in the accounting reports. For most companies in the manufacturing and service sectors, these costs usually vary from 10 to 30 % of sales revenue or between 25 to 40 % of operating expenses. Some of these costs are visible; some of them are hidden. Such profit leaks help to justify an improvement effort.
By focusing on activities related to prevention, you can significantly reduce your appraisal and failure costs; these will result in a drop in your total quality cost and a rise in your profit.
After designing your product for a particular market segment, you can attain a higher quality of conformance by applying quality control techniques and quality management. By aiming to produce ‘right the first time and every time’, you will reduce waste and thus lower costs. You will have more satisfied customers who will have fewer problems with your product or service. Customers will come back for more of your product and business will grow as your brand name gets established. If your product or service is under warranty, costs will be minimized because you will have fewer calls for repairs during the after-sales service period. All these will bring about a rise in productivity and a reduction in costs.
You can make use of part of the savings resulting from the higher quality of conformance to add features to your product or service at no real extra cost and no added cost for the customer. You would thus raise your quality of design without a price increase. This would have a major effect on your sales revenue, improve your market share and engender in your customers a higher level of satisfaction. You can thus have cycles of continual improvement through higher quality of conformance, followed by higher quality of design, again followed by higher quality of conformance, and so on.