Mastering Quality Management: Concepts, Dimensions, and Approaches
Definition of Quality
Quality encompasses good performance, customer satisfaction, efficiency with resources, competitive advantage, and meeting requirements.
Multiple Definitions of Quality
Quality can be grouped into four main categories:
Quality as Conformance to Specifications (Internal Perspective)
- Measured by how well a product or service meets its specifications.
- Example: Uber Eats delivery time matches the promised 45 minutes.
- Pros: Statistical control, efficiency, standardization.
- Cons: Market displacement and lack of adaptability.
Quality as Customer Satisfaction (External Perspective)
- Measured by how well a product or service meets or exceeds customer expectations.
- Example: The expected taste of bottled water.
- Pros: Market sensitive, applicable to services.
- Cons: Expectations change, difficult to measure satisfaction.
Quality as Value in Relation to Price (External Perspective)
- Perceived quality depends on price and market competition.
- Example: Comparing AVE vs. OUIGO (train services).
- Pros: Easy to communicate, applies to all aspects of business.
- Cons: Hard to standardize, risk of losing value-price ratio.
Quality as Excellence (Global Perspective)
- Striving for the best in all aspects.
- Example: Brands like Bang & Olufsen, Loewe.
- Pros: Integrative approach, applies to people and processes.
- Cons: Difficult to measure, risk of overpricing.
Synthesis of Quality Perspectives
Different perspectives on quality can be synthesized as follows:
Internal Perspective
Focuses on efficiency, ensuring conformance to specifications.
External Perspective
Focuses on efficacy, encompassing customer satisfaction and value for money.
Global Perspective
Combines both efficiency and efficacy, striving for overall excellence.
Quality Dimensions
Product Quality Dimensions (8)
- Performance: Primary operating characteristics (e.g., fuel economy in cars).
- Features: Additional functionalities (e.g., Apple Car touchscreen).
- Reliability: Probability of product failure.
- Conformance: Meeting established standards (e.g., emissions regulations).
- Durability: Product lifespan before breaking.
- Serviceability: Ease of repairs and maintenance.
- Aesthetics: Subjective appeal (e.g., car design).
- Perceived Quality: Overall customer perception.
Service Quality Dimensions (5)
- Tangible Elements: Physical aspects (appearance, equipment, personnel).
- Reliability: Consistent service performance.
- Responsiveness: Speed and willingness to help customers.
- Assurance: Employee knowledge and credibility (trust).
- Empathy: Individualized customer attention.
Approaches to Quality Management
Approaches to quality management can be categorized as reactive or preventive.
1. Control by Inspection (Reactive)
Not valid for services.
- Focus: Product-oriented, detects errors after production.
- Characteristics: No prevention; detects and discards defects.
- Example: Checking 100% of products manually or using machines.
- Limitations: High inspection costs, increased defective product waste, not suitable for complex products or services.
2. Quality Control (Reactive)
- Focus: Process-oriented, identifies issues in production.
- Characteristics: Uses statistical methods to detect variability; focuses on common (random) and special (avoidable) causes of variability.
- Example: Process monitoring to detect issues like poor material selection or lack of training.
- Limitations: Still reactive, doesn’t prevent failures, less costly than inspection but still requires high investment.
3. Quality Assurance (Preventive)
- Focus: System-oriented, aims at error prevention.
- Characteristics: Standardized procedures (e.g., ISO 9001, sustainability protocols); quality is a company-wide responsibility; proactive system development to prevent defects.
- Benefits: Higher reliability in product and process quality, prevention reduces reprocessing costs, ensures compliance with international quality standards.
4. Total Quality Management (TQM) (Preventive)
- Focus: People-oriented, continuous improvement in all areas.
- Characteristics: Customer satisfaction driven, leadership commitment from top management, collaboration with suppliers, employees, and customers; involves training, teamwork, and continuous learning.
- Benefits: Integrates quality across all business functions, encourages employee engagement, strengthens long-term competitiveness.
Why Manage Quality?
Key Benefits
- Reduces mistakes, complaints, and claims.
- Improves design adaptation to customer expectations.
- Enhances perceived value and quality image.
- Allows for higher pricing and market share growth.
- Increases sales, revenues, and profits.
- Ensures greater control over manufacturing processes.
- Reduces defective products and reprocessing.
Impact on Efficiency
Without quality management, a typical scenario might involve 20% rejections and 80% efficiency. With effective quality management, rejections can drop to 10%, increasing efficiency to 90%.
Results of Quality Management
- Continuous improvement.
- Higher productivity and lower costs.
- Competitive advantage.
- Customer loyalty.
Concept of Quality Management
Quality management is a structured approach where top management implements systems to achieve quality goals.
Why Different Approaches Exist?
Companies operate under different internal and external factors. Quality management follows an evolutionary and accumulative process, leading to diverse approaches.
Limitations of Reactive Approaches
Control by inspection and quality control share several limitations:
- Both are reactive approaches.
- Quality responsibility is limited to production.
- Market and customer needs are often ignored.
- They prevent defective products from reaching customers, but not from being produced.
- Worker fatigue reduces effectiveness.
- They lead to high costs without adding value.
The Economic Dimension of Quality
Cost of Quality Formula
Cost of Quality = Quality Costs + Non-Quality Costs
Quality Costs
- Prevention Costs: Expenses incurred to prevent defects (e.g., training, supplier quality control).
- Evaluation Costs: Expenses incurred to assess quality (e.g., audits, customer satisfaction surveys).
Non-Quality Costs
- Internal Failure Costs: Costs from defects found before delivery (e.g., scrap, rework, material waste).
- External Failure Costs: Costs from defects found after delivery (e.g., warranty claims, lost reputation).
Key Insights
- The sooner a defect is detected, the lower the cost.
- Higher quality investment leads to lower failure costs in the long run.
- Balancing prevention and failure costs is critical for financial sustainability.