Quality Control and Quality Assurance PDF

BM2408 QUALITY CONTROL AND QUALITY ASSURANCE Establishing and maintaining high-quality assurance and control are among the most important components of a successful operation ac...

BM2408 QUALITY CONTROL AND QUALITY ASSURANCE Establishing and maintaining high-quality assurance and control are among the most important components of a successful operation across various industries, whether in manufacturing or service-oriented businesses. Ensuring and preserving the quality of goods and services is essential for customer satisfaction and retention (Tarlengco, 2024). TQM in Service Operations Service businesses are of great significance as they provide vital support and assistance to individuals and other businesses. They address a wide range of needs and demands and play a pivotal role in fostering innovation and addressing evolving challenges in various industries (Davids, 2024). What is a Service? (George, 2024) William Edwards Deming asserts that service is a type of intangible product that customers receive in exchange for payment. Unlike physical offerings, services are non-physical and encompass a broad range of activities, such as professional assistance and task performance. They are prevalent in sectors such as healthcare, finance, education, and transportation. Services differ from goods in that they are often consumed immediately upon production and cannot be stored or resold. Examples of service offerings include consulting, repair, maintenance, hospitality, banking, and entertainment. The quality of a service is shaped by factors such as customer experience, satisfaction, and the ability to meet customers' needs and expectations. Classification of Services (Shafer, 2024) As Shafer emphasizes in his book, the role of every business is to ensure the high quality of their market offerings, optimize resource utilization, maximize efficiency, and maintain quality control. Services are categorized into different types to make them easier to understand and manage efficiently. This classification facilitates better communication and understanding among service providers, consumers, and regulatory agencies. Business services: These are services that cater to the needs of businesses, such as consulting, accounting, and legal services. McKinsey, a leading management consulting firm in the Philippines, provides advice and expertise to help businesses improve their operations. Professional services: These services are performed by professionals who have specialized knowledge and skills, such as doctors, lawyers, accountants, and architects. Philippine General Hospital is an example of this, offering healthcare services provided by doctors and other healthcare professionals. Personal services: These services are aimed at fulfilling individual needs and include services like personal grooming, fitness training, and home cleaning. A good example is a spa that offers massage and beauty treatments or a Beauty Salon that offers different haircare treatments and make-up services for various occasions. Social services: These services are geared towards enhancing the well-being of individuals and communities, including services like childcare, elder care, and community development programs. Bahay Tsinoy Foundation, a nonprofit organization that provides shelter for homeless individuals, is an example of this service. Another one is the Philippine Social Welfare and Development Agency, 05 Handout 1 *Property of STI Page 1 of 8  BM2408 which serves as the primary government institution responsible for social protection and poverty alleviation programs in the country. Financial services: These services include banking, insurance, and investment services. For instance, a commercial bank like BDO, Metrobank, and Unionbank provides various financial services, such as savings accounts, loans, and credit cards. Hospitality services: These services are related to the tourism and hospitality industry, such as hotels, restaurants, and travel agencies. For instance, Shangri-la Hotel and Astoria Plaza in Boracay offer accommodation, dining, and concierge services to travelers. Transportation services: These services involve the movement of people or goods from one place to another, such as airlines, taxi services, and shipping companies. A courier service that delivers packages and documents like J&T, Lalamove, and Air21 are examples of these services. Communication services: These services facilitate the exchange of information, such as telecommunications, internet providers, and media companies. The best examples are Globe and Smart Telecommunications, the two leading mobile phone network providers in the Philippines, which offer voice and data communication services to their customers. Education services: These services are related to the field of education, including schools, colleges, and tutoring services. For instance, STI College provides learning classes to students. Entertainment services: These services offer leisure and entertainment options, such as movie theaters, amusement parks, and event management companies. A concert venue that hosts live performances is an example of an entertainment service. Benefits of TQM in the Service Operation (Besterfield, 2024) In the service industry, the implementation of Total Quality Management (TQM) fosters a proactive approach to problem-solving. This approach emphasizes prevention rather than correction, enabling service organizations to achieve elevated levels of quality and productivity such as: Improved customer satisfaction: Quality value in the service industry ensures that customers receive services that meet or exceed their expectations. For instance, luxury hotel chains like Okada Manila focus on providing exceptional services, such as personalized greetings, customized amenities, and 24/7 concierge assistance, which elevate the overall experience and leave a positive, lasting impression on customers. Increased customer loyalty and retention: By consistently delivering high-quality services, companies can build trust and loyalty, encouraging customers to return in the future. Apple is renowned for its commitment to quality in its electronic products, creating a loyal customer base that eagerly awaits their new releases and often becomes repeat buyers. Enhanced reputation and brand image: Quality value contributes to building a strong reputation and a positive brand image. For example, Amazon has established itself as a leader in the e-commerce industry by prioritizing quality in its vast product range and ensuring timely delivery, leading to a reputation for reliability and excellent customer service. Competitive advantage: Offering superior quality services can give a company a competitive edge over its rivals. Philippines Airlines differentiates itself by providing exceptional customer service, on- time performance, and overall satisfaction, positioning itself as a preferred choice for air travel compared to other airlines in the highly competitive industry. Operational efficiency and cost savings: Quality value focuses on streamlining processes and eliminating inefficiencies, which can result in cost savings for the company. McDonald's introduced 05 Handout 1 *Property of STI Page 2 of 8  BM2408 the “Self-service Kiosk” to improve the speed and efficiency of their food preparation, leading to cost savings and faster service for customers. Employee satisfaction and productivity: Empowering employees to deliver high-quality services boosts their job satisfaction and can lead to increased productivity. Tobys, a famous multi-brand sports retailer, places great emphasis on employee satisfaction and empowerment, resulting in a workforce that goes above and beyond to provide exceptional customer service. Continuous improvement and innovation: Quality value encourages a culture of continuous improvement and innovation, pushing companies to evolve and stay ahead. Tesla, for example, has revolutionized the electric vehicle industry by continuously improving its products, expanding charging infrastructure, and introducing innovative features to provide customers with top-quality electric cars. Customer advocacy and referral: When customers experience quality value in the service industry, they become advocates and are more likely to recommend the company to others. Apple's dedicated fan base serves as a powerful marketing tool, as satisfied customers often refer their friends and family to purchase Apple products. Reduced customer complaints and returns: By delivering services of high quality, companies can minimize customer complaints and returns, saving time and resources. Uniqlo, a fast-fashion retailer, has a stringent quality control process that ensures its products meet the desired standards, reducing the likelihood of customer dissatisfaction or returns. Sustainable business growth: Quality value contributes to the overall growth and success of a business. Toyota's strong focus on quality, displayed through its "Toyota Production System," has allowed the company to become one of the largest and most profitable automakers globally, ensuring sustained growth and success Hindrances to Quality Service (Davis, 2024) Implementing Total Quality Management (TQM) may appear deceptively effortless, but it poses numerous challenges. The application of TQM in service-oriented enterprises encounters obstacles that necessitate substantial cultural and organizational transformations. These shifts can prove to be challenging to accomplish within the framework of service businesses: Lack of employee training and development: When employees are not adequately trained and developed, they may lack the skills and knowledge needed to provide high-quality service. This can result in mistakes, delays, and poor customer experiences. Solution: Implement regular training programs and provide opportunities for employees to enhance their skills and knowledge. Inadequate communication: Miscommunication or insufficient communication between employees and customers can lead to misunderstandings and dissatisfaction. If a customer's request is not clearly understood by an employee, it can result in a wrong product or service being delivered. Solution: Implement effective communication channels and encourage open and transparent communication between employees and customers. Poor leadership and management: When leaders and managers do not prioritize and emphasize the importance of quality service, it can trickle down to the employees, affecting their motivation and attitude toward delivering excellent service. Solution: Ensure strong leadership and management support, where quality service is set as a priority and actively promoted among employees. 05 Handout 1 *Property of STI Page 3 of 8  BM2408 Inefficient systems and processes: Outdated or inefficient systems and processes can hinder the delivery of quality service. If a customer must go through a lengthy and complicated process to get their issue resolved, it can lead to frustration and dissatisfaction. Solution: Regularly review and optimize systems and processes to ensure they are streamlined and customer-friendly. Lack of customer feedback and evaluation: Without input from customers, businesses may not be aware of areas where their service falls short. A restaurant that does not actively seek customer feedback may not realize that their service speed is too slow, resulting in customers leaving unsatisfied. Solution: Establish mechanisms to gather customer feedback, such as surveys or suggestion boxes, and use the feedback to identify areas for improvement. Insufficient employee empowerment: When employees do not have the authority or autonomy to make decisions or resolve customer issues, it can hinder the delivery of quality service. If a customer complaint goes through multiple levels of approval, it can lead to delays and frustration. Solution: Empower employees by providing them with the necessary authority and resources to resolve customer issues promptly. Lack of consistent standards and guidelines: Inconsistency in service delivery can lead to confusion and dissatisfaction among customers. A hotel that has different interpretations of cleanliness standards across its various branches may result in varying customer experiences. Solution: Establish and communicate clear standards and guidelines for service delivery to ensure consistency across all touchpoints. Failure to adapt to changing customer needs: If a business fails to understand and adapt to evolving customer needs and preferences, it can result in outdated and irrelevant service offerings. Solution: Regularly conduct market research and engage with customers to stay informed about their changing needs and modify service offerings accordingly. Lack of emphasis on employee satisfaction: Disengaged or dissatisfied employees are less likely to provide quality service. A retail store that does not provide sufficient incentives or recognition for its employees may lead to a lack of enthusiasm for serving customers. Solution: Prioritize employee satisfaction by implementing initiatives such as rewards and recognition programs, employee surveys, and a positive work environment. Failure to resolve customer complaints effectively: Inability to address and resolve customer complaints can damage the reputation of a business and lead to customer loss. A company that mishandles customer complaints may face negative reviews and decreased customer loyalty. Solution: Establish a robust system for handling customer complaints promptly and effectively, ensuring that customers feel heard, and their issues are resolved to their satisfaction TQM in Manufacturing Operations What is Manufacturing? According to Jacobs (2024), Manufacturing is the process of converting raw materials, components, or parts into finished goods on a large scale using machinery, labor, and various production techniques. It involves a series of steps, such as design, engineering, production, and quality control, to create a final product that can be sold to consumers or other businesses. This industry encompasses a wide range of sectors, including automotive, electronics, food and beverage, pharmaceuticals, and more. The goal of manufacturing is to efficiently produce goods that meet market demand while ensuring high quality and cost-effectiveness. 05 Handout 1 *Property of STI Page 4 of 8  BM2408 Classifications of Manufacturing (Shafer, 2024) Manufacturing operations are classified to establish a structured and comprehensive approach to organizing and comprehending the various types of manufacturing activities. Grouping these activities facilitates analysis, comparisons, and decision-making processes, as well as enables the identification of shared characteristics, trends, and challenges within similar manufacturing sectors. Job Order Manufacturing: This involves producing customized products in small quantities according to specific customer requirements. In the Philippines, Jeepney manufacturing creates unique designs based on client orders. Batch Manufacturing: This method involves producing a specific quantity of items before moving on to the next batch. A good example is the production of packaged food items like dried mangoes, which are made in batches to meet market demand. Mass Production: This involves manufacturing large quantities of standardized products in an assembly-line fashion. One notable example is the production of consumer goods like canned sardines, which are manufactured in huge volumes. Continuous Manufacturing: This method involves the uninterrupted production of goods, often using automation. For instance, the production of cement by companies like Holcim Philippines, where the process runs continuously to meet market demands. Process Manufacturing: This entails the production of goods through a systematic series of steps. Companies producing beverages, like San Miguel Corporation, utilize process manufacturing to create beverages such as beer and soft drinks Benefits of TQM in Manufacturing Operations (Besterfield, 2024) The integration of Total Quality Management (TQM) in manufacturing operations fosters a culture of constant improvement and active employee involvement. This approach facilitates enhanced problem-solving abilities and promotes innovation, contributing to superior process control, waste reduction, and more effective decision-making. Improved quality: TQM focuses on continuously improving product quality to meet customer expectations and reduce defects. For example, Toyota's implementation of TQM has led to higher- quality vehicles and increased customer satisfaction. Cost reduction: By identifying and eliminating waste and inefficiencies, TQM helps manufacturing operations reduce costs while maintaining or improving product quality. For instance, Samsung saw significant cost savings after implementing TQM in its manufacturing processes. Enhanced customer satisfaction: TQM aims to meet or exceed customer expectations, resulting in higher customer satisfaction and loyalty. General Electric implemented TQM to improve customer satisfaction and gain a competitive edge. Increased productivity: TQM involves focusing on process improvements and employee involvement, leading to increased productivity. Ford's successful implementation of TQM resulted in significant productivity gains in its manufacturing operations. Employee involvement and empowerment: TQM encourages involving and empowering employees to contribute to continuous improvement and innovation. Philippine Airlines is known for its TQM approach, which includes employee involvement and empowerment and has resulted in improved operational efficiency. Better decision-making: TQM emphasizes data-driven decision-making, leading to better overall decision-making in manufacturing operations. San Miguel Corporation's use of TQM has improved decision-making and problem-solving within its manufacturing processes. 05 Handout 1 *Property of STI Page 5 of 8  BM2408 Competitive advantage: TQM can provide a competitive advantage by differentiating a company through higher quality, lower costs, and greater customer satisfaction. As a result of TQM implementation, Shein has achieved a competitive advantage in its manufacturing operations. Continuous improvement: TQM promotes a culture of continuous improvement, ensuring that manufacturing operations are always striving to enhance processes and products. For instance, Apple has successfully implemented TQM to achieve continuous improvement in its manufacturing operations of Apple products to meet customer demands worldwide. Supplier relationships: TQM involves working closely with suppliers to ensure high-quality inputs, leading to improved overall product quality. Japanese car brands like Toyota, Suzuki, and Honda’s TQM approach have resulted in strong supplier relationships, ensuring high-quality components in its manufacturing operations. Enhanced communication: TQM encourages open communication within manufacturing operations, leading to better coordination, problem-solving, and innovation. Procter & Gamble has used TQM to improve communication and collaboration within its manufacturing operations. Hindrances to Quality Manufacturing (Davis, 2024) Implementing Total Quality Management (TQM) may seem deceptively simple; however, it presents numerous challenges. TQM's application in manufacturing businesses requires significant cultural and organizational transformations, leading to various obstacles. Lack of Skilled Workforce: When employees lack the necessary skills and knowledge, it hampers the manufacturing process and reduces the quality of products. Some business companies may struggle to find workers with specialized technical skills required for certain manufacturing processes. Solution: Offer specialized training programs and partnerships with educational institutions to develop a skilled workforce. Poor Infrastructure: Inadequate infrastructure and outdated facilities can lead to manufacturing inefficiencies and affect product quality. A company might face issues such as unreliable power supply or outdated machinery. Solution: Invest in modernizing infrastructure, upgrading machinery, and ensuring a stable power supply. Inconsistent Supply Chain: Fluctuations in the supply chain, including delays or shortages in raw materials or components, can disrupt manufacturing and compromise product quality. A company might experience delays in receiving raw materials from suppliers due to transportation issues or supply chain disruptions. Solution: Strengthen supplier relationships, establish backup suppliers, and consider implementing just-in-time inventory management systems. Inadequate Quality Control Processes: Insufficient quality control measures, such as lack of proper inspections and testing, can result in defective products reaching the market. A company might have limited quality control checks and fail to identify product defects before shipment. Solution: Implement robust quality control processes, conduct regular inspections, and invest in testing equipment to ensure product quality. Cultural Barriers: Differences in work culture and communication styles can impact manufacturing quality, especially in multinational companies. A company collaborating with foreign partners may face challenges due to cultural differences affecting coordination and understanding of quality requirements. 05 Handout 1 *Property of STI Page 6 of 8  BM2408 Solution: Promote cross-cultural training, encourage effective communication practices, and foster a collaborative work environment. Lack of Standardization: Inconsistent manufacturing practices and lack of standardized operating procedures can lead to variations in product quality. A company might have different manufacturing processes across different production lines, resulting in inconsistent product quality. Solution: Establish standardized operating procedures, implement quality management systems, and conduct regular audits to ensure adherence to quality standards. Insufficient Investment in Research and Development: Lack of investment in research and development limits innovation and the ability to improve product quality. A company may struggle to allocate resources for research and development, hindering improvements in manufacturing techniques and product quality. Solution: Allocate resources for research and development activities, promote innovation, and collaborate with research institutions to enhance manufacturing processes and product quality. Regulatory Compliance Challenges: Adhering to complex and evolving regulatory requirements can be a hindrance to quality manufacturing. Some companies must comply with local and international regulations, which can affect manufacturing processes and quality control. Solution: Stay updated with regulations, invest in compliance management systems, and ensure adherence to all applicable standards and certifications. Lack of Continuous Improvement Culture: Without a focus on continuous improvement, manufacturing companies may face complacency and fail to address emerging quality issues. A company may resist implementing changes to improve manufacturing processes, resulting in quality stagnation. Solution: Foster a culture of continuous improvement, encourage employee involvement in identifying improvement opportunities, and implement lean manufacturing principles. Inadequate Data Management: Poor data management practices can hinder decision-making and compromise product quality. A company may face challenges in collecting, analyzing, and utilizing manufacturing data effectively to identify quality improvement opportunities. Solution: Develop robust data management systems, implement data analytics tools, and ensure data-driven decision-making processes to improve product quality. Quality Measurements and Metrics What is Quality Measurement? Guevara (2023) defined quality measurement as “the fundamental process of assessing and evaluating the characteristics and properties of a product, service, or process against established standards and criteria.” Through the systematic gathering and analysis of data, quality measurement permits an objective assessment of performance, adherence to requirements, and customer satisfaction. In essence, quality measurements serve to identify areas that require enhancement, monitor progress, and make well-informed decisions regarding potential changes or interventions. They play a vital role in monitoring and controlling quality, ensuring consistency, and meeting customer expectations. Across diverse industries and domains, an array of instruments and methodologies, including metrics, key performance indicators, surveys, and audits, are employed to conduct quality measurements. This comprehensive approach provides valuable insights into a system's effectiveness and efficiency, enabling organizations to drive continuous improvement and elevate overall performance. 05 Handout 1 *Property of STI Page 7 of 8  BM2408 Metrics Used to Conduct Quality Measurements (Guevara, 2023) Customer Satisfaction: This metric measures customers' satisfaction with products or services. An example is the Net Promoter Score (NPS), which gauges customers' likelihood of recommending a company's product or service. NPS is based on a simple question: "On a scale of 0-10, how likely are you to recommend our product/service to a friend or colleague?" Respondents are then classified into three categories: Promoters (scoring 9-10), Passives (scoring 7-8), and Detractors (scoring 0-6). To calculate the NPS, the percentage of Detractors is subtracted from the percentage of Promoters. The resulting score can range from -100 to +100. A positive NPS indicates that the majority of customers are satisified and will recommend the product, while a negative score indicates unsatisfied customers that will not recommend the product. Return on Investment (ROI): ROI measures the profitability of an investment and is used to assess the financial returns relative to the investment's cost. Example: Calculating the ROI of a marketing campaign to determine its effectiveness. Customer Retention Rate: This metric measures the percentage of customers that a business has retained over a specific period. Example: A company with a high customer retention rate indicates that its products or services are meeting customer needs effectively. Employee Productivity: This metric evaluates the output of employees in relation to the resources expended. Example: Measuring the sales generated per employee to assess productivity. Defect Rate: Defect rate measures the number of defective products or services produced. Example: A manufacturing company monitoring the defect rate in its products to ensure quality. Net Profit Margin: This metric assesses the profitability of a business by measuring the percentage of revenue that translates into profit. Example: Analyzing the net profit margin to evaluate a company's efficiency in cost management. Market Share: Market share measures a company's sales in relation to the total market. Example: Tracking the market share of a company's product to assess its competitiveness. On-time Delivery Performance: This metric evaluates how often a business delivers products or services on time. Example: A logistics company tracking on-time deliveries to ensure customer satisfaction. Cost of Quality (COQ): COQ measures the costs associated with ensuring product quality. Example: Assessing costs related to quality control, prevention, and appraisal activities. Employee Satisfaction: This metric measures the contentment and engagement level of employees. Example: Using employee surveys to gauge satisfaction levels within the organization References Besterfield, D. (2024) Total Quality Management. Pearson Davis, S. (2024). Total Quality Management: An Integrated Approach. Butterworth-Heinemann Publications George, S. (2024) Total Quality Management: Strategies and Techniques Proven Today’s Most Successful Companies. Wiley LLC Guevara, P. (2023). What are Quality Metrics? https://safetyculture.com/topics/quality-metrics/. Jacobs, R. (2024). Operations and Supply Chain Management. McGraw-Hill Education Shafer, M. (2024). Operations Management for MBAs. Wiley Publications. Tarlengco, J. (2024). Quality Assurance and Quality Control. https://safetyculture.com/topics/quality-assurance-and-quality-control/ 05 Handout 1 *Property of STI Page 8 of 8