The final aspect of business operations that we will cover in this section is quality management.

So, what is it?

Quality management ensures that an organization, product or service consistently functions well.

It has four main components:

• quality planning,
• quality assurance,
• quality control, and
• quality improvement.

Quality management is focused not only on product and service quality, but also on the means to achieve it.

What is Quality Planning?

A key attribute or characteristic of our products, whether they are goods or services or a combination thereof, is the quality of that product.

Quality concerns how well the product aligns with the expectations of stakeholders – manufacturer, user, etc.

The dimensions of quality (how quality is determined) includes the following:

• Performance: Primary product characteristics, such as the brightness of the picture
• Features: Secondary characteristics, added features, such as remote control
• Conformance: Meeting specifications or industry standards, workmanship
• Reliability: Consistency of performance over time, average time of the unit to fail
• Durability: Useful life, includes repair
• Service: Resolution of problems and complaints, ease of repair
• Response: Human – to – human interface, such as the courtesy of the dealer
• Aesthetics: Sensory characteristics, such as exterior finish
• Reputation: Past performance and other intangibles, such as being ranked first

An important aspect of management is to plan for the creation of quality products (quality planning) and the assurance of product quality once created (quality assurance and quality control).

What are the Steps Involved in Quality Planning?

Quality planning is a core function of management practice.

The following are the important steps for quality planning:

• Establishing quality goals.
• Identifying customers.
• Discovering customer needs.
• Developing product features.
• Developing process features.
• Establishing process controls and transferring to operations.

Each of these steps requires unique skills and task that will vary based upon the nature of the product or service being created.

We explore each of these steps in the planning process further in our management course.

What is Quality Assurance?

Quality assurance is a management system designed to provide confidence that a product or service meets expected quality standards.

Establishing confidence is important for managers, owners, and third-party stakeholders, such as employees, customers, creditors, regulators, etc.

Quality assurance is largely a preventative measure. In its most basic form, it is a process to limit defects and waste in manufactured products and services rendered.

Quality Assurance is not necessarily a stand-alone process. It may be integrated into other managerial approaches, such as Total Quality Management.

There are two main principles of quality assurance:

• Fit for Purpose: A product or service should be fit for the purpose for which it is designed or developed.
• Free of Defects: The product or service should be free from any defects once created.

The objectives or quality assurance are as follows:

• Identify any causes of non-compliance or failure to meet standards.
• Reduce or eliminate these defects or causes for non-compliance.

The quality assurance is basically a plan of action focused on the creation process. Next, we need to ensure that any product (once created) meets the identified standards standards.

What is Quality Control?

Quality control refers to a set of procedures through which businesses review their manufactured products to ensure they meet standard quality requirements.

There are certain standards or qualities that products must meet.

Failure of the products to meet the stipulated qualities means they must be junked, reworked, or improved upon.

The International Organization for Standardization (ISO) specifies quality standards that products must fulfill.

Quality control must be carried out in every process of a business operation to ensure that products meet the required specifications.

Testing the units of a product to determine whether they are within the scope of quality standards is essential.

The type of product a company manufactures determines the quality control measures that will be used.

Inspectors, generally employees of regulatory bodies, ensure that products meet quality control criteria.

We previously mentioned that quality control and assurance further the objectives of overall quality improvement.

What is Quality Improvement?

Quality improvement is a system or approach adopted by a company to make improvements to operations or processes to gain efficiency and effectiveness while reducing waste.

Examples of quality improvement systems include:

• Total Quality Management
• Six Sigma
• Lean Sigma
• DMAIC Methodology

We introduced these concepts in a previous section. Each of these approaches to quality improvement is discussed in greater detail in our Operations course.

At this point, it is worth identifying how business incorporate quality management procedures into a system for ensuring quality.

What is a QMS (Quality Management System)?

A quality management system consists of a number of processes aimed at efficient and accurate delivery of a value proposition to a customer, client, or end-user. The objective is to meet customer expectations and achieve satisfaction.

A Quality Management System must usually align all aspects of the delivery of the company’s value proposition (including procedural aspect and strategic objectives) through its policies, operational procedures, leadership and motivational methods, resource allocation, and distribution of information.

Each process should be documented (and perhaps certified) with regard to how it contributes to the overall system of quality management.

The idea of continuous improvement regards how these various processes are carried out.

Examples of processes might include:

• Ordering
• Planning
• Measurement
• Audit
• Problem Solving
• Compliance Activities
• Training

Quality Management is generally thought to include:

• Accurate and consistent processes and outcomes in the delivery of a value proposition;

Note: This generally employs testing and verification through statistical methods, such as random sampling.

• Resource allocation (including human capital management and output standards);

Note: Human capital management general concerns motivation, cooperation, synergies, communication, problem signaling, and continuous improvement cycles.

• Sustainability and Transparency (including repeatable process and adequate disclosure of information to company stakeholders).

The most well-known quality management system is the ISO 9000 family of quality standards. It is an international standard adopted widely in most industrial countries. The elements common to the quality standards include:

• Quality objectives
• Quality manual
• Organizational structure and responsibilities
• Data management
• Processes including purchasing
• Product quality leading to
• Customer satisfaction
• Continuous improvement including corrective and preventive action
• Quality instrument
• Document control

Conclusion

The intended outcome of this lesson is to understand the basic components of quality management – a core function of management.