QUALITY OF PERFORMANCEAchieving a standard for a product or service that meets or exceeds customers’

expectations

CONCEPTS

Quality gap: Difference between the expected quality (management) and perceived quality (customers)

Characteristics: Good functionality – do the job well Good design – look and style Reliability – breakdowns or failures Durability – lasting as long as it should Good after sales service Value for money

ADVANTAGES OF GOOD QUALITY

Customer loyalty

Strong brand reputation for quality

Product is perceived to be better value for money and may attract a higher price

Fewer returns and replacements lead to reduced costs

Attracting and retaining good staff

REQUIREMENTS OF 8 BUSINESS FUNCTIONS

Marketing

functio

n

•Determine needs of customers•Develop products that will meet expectations

Purchasi

ng function

•Right quality goods and services are purchased•Able to produce/sell good quality products

REQUIREMENTS OF 8 BUSINESS FUNCTIONS

Production functio

n

•Produce products according to standards that meet expectations

HR fu

nction

•Ensure employees have all necessary knowledge and skills•Carry out functions and activities according to required performance standards

REQUIREMENTS OF 8 BUSINESS FUNCTIONS

Financial

functio

n

•Ensure effective planning, management and administration•Should be able to meet financial requirements of all other functions

General

Manage

ment funct

ion

•Effective planning, leading, organizing and control of overall performance of the business•Meet the goals and objectives of the business

REQUIREMENTS OF 8 BUSINESS FUNCTIONS

Public

Relation

s function

•Good relations with all stakeholders will create and maintain a positive image of the business

Administrative function

•Ensure effective data management, processing and storing to make it available to other functions, as needed.

TECHNIQUES AIMED AT IMPROVING QUALITY

• Quality CirclesA volunteer group composed of workers who meet and discuss workplace improvement

Present their ideas relating to quality to managementTypical topics include improving safety, product design and the manufacturing process

8 – 10 members

• Total Quality Management (TQM)Creating awareness of quality in all organizational processes

Based on participation of all members of the enterprise

QUALITY IN HR FUNCTION

Effective recruitment to attract the best candidates

Make use of a fair selection process

Healthy working relationship between employer and employee, as well as good working conditions will improve performance of employees.

Set up an effective organizational structure so employees understand the interrelationship between business functions and the goals of the business.

Organise training programmes and continuous skills development – keep up with changes in technology and the industry – leads to improved productivity and work of higher quality

Promote employee motivation to ensure job satisfaction and improve performance levels – fair remuneration and recognition of good work with rewards

QUALITY IN THE PURCHASING AND PRODUCTION FUNCTIONS

Purchasing of goods of the right quality from reliable suppliers.

Doing regular stock control to ensure sufficient levels of stock

Minimise losses due to theft and obsolescence

The use of good quality raw materials, labour, machinery and equipment will ensure good quality final products

Making use of a suitable production system (mass, batch or jobbing)

Doing continuous quality control

Maintaining equipment and adhering to all safety procedures and regulations to contribute to the safety of all factory workers.P 185

QUALITY IN THE FINANCIAL FUNCTION

Effective planning, management and control of funds in the business

Finance team manages and monitors flow of money accros the business and produces financial and management accounts to assess the performance of the business

Obtaining of capital from the most suitable sources

Drawing up of budgets

Ensuring financial records are up to date and investigating strategies to increase profitability

Investing surplus funds effectively

FINANCIAL FUNCTION CONTINUED…

Financial accounting

Management accounting

Income statement Balance sheet Cash flow statements

Budgeting Costing Forecasting

Deciding how to use funds

Each department compiles own budget

Measuring and recording all costs in the business

Actual costs are compared to expected costs

Profits can be increased by controlling costs

Determines amount of sales a business can make from current operations

Based on the demand for goods

Used to determine how to allocate budgets

QUALITY IN THE MARKETING AND PR FUNCTIONS

Price, place, product and promotion (4 Ps of Marketing)

People, processes and physical environment (7 Ps of Marketing)

Market research is a very important tool for businesses to gather information

Effective product development, good ricing and effective designing of packaging

Continuously adapting the product to meet the dynamic needs of consumers

PR is about creating a favourable image of the business

Treating employees well

Delivering quality goods and services

Support environmental and community projects

Preventing negative publicity by obeying laws and acting ethically and responsibly

QUALITY IN THE ADMINISTRATION FUNCTION

Applying technology efficiently

Collection of data and information

Ensuring that captured data or information is accurate

Processing of data and making information available to management so that management can react to opportunities and threats

QUALITY IN THE GENERAL MANAGEMENT FUNCTION

Creating a suitable mission and vision for the business

Organising employees in the most efficient way

Demonstrating effective leadership

Taking control of all processes and communicating with employees

Strategic planning

Involving employees in decision making processes

Involved in all other business functions and is ultimately responsible for the overall performance of the business, including maximizing profits by producing high quality goods and services

IMPACT OF QUALITY ON DIFFERENT BUSINESS STRUCTURES

Whether a business is small or large, the delivery of good quality goods and services are essential for the success of any business.

SMALL BUSINESSES LARGE BUSINESSES

• Business functions can be combined• Ignoring one business function

because too much time is spent on managing other functions

• Inability to negotiate good prices when buying trading stock makes it difficult to offer value for money goods

• Quality control may be effective, but not well documented

• Limited funds to spend on marketing

• Lack of expertise• High costs of outsourcing

• Specific people or entire deparments carries out each of the various functions

• Ability to afford specialized and skilled employees

• Ability to afford quality equipment and machinery

• Implementation of well planned quality systems

• Tall organizational structures make it difficult to detect problems or respond to weaknesses

TQM

Management system or approach that focuses on continuous quality improvement throughout the business

Basic principles: Focus on achieving customer satisfaction Look for continuous improvement in all business processes, products

and services Steps to ensure full involvement and co-operation of all employees in

improving quality.

CONTINUOUS SKILLS DEVELOPMENT

Ongoing education and training is necessary for employees to be productive and to drive quality

Skills development and training will empower employees and improve their performance as individuals and in teams

Continuous skills development needs commitment from top management

Skills employees need to implement TQM: Committed and well trained employees, who participate fully in quality

improvement activities All employees need to understand the principles of TQM and how it is

achieved and maintained Links rewards and recognition to the achievement of quality objectives

TEAMWORK

Everyone should work effectively as an individual and as a team member within a department of a business or across departments

Quality circle is a group of employees with a variety of skills and experience coming together to solve problems related to quality and to implement improvements.

They give solutions to top management

TOTAL CLIENT SATISFACTION

Quality products and services

Customers will be satisfied when they receive value for money products and services that meet needs, requirements and expectations, that are delivered when expected

TQM puts customers first: Conduct effective market research to determine customers needs and

develop products that meet/exceed those needs Consider the needs of internal and external customers Implement efficient, friendly customer service Value feedback from customers and listen to their views and opinions Respond to customer complaints in a way that will satisfy expectationsShow ethical conduct and integrity at all times

CONTINUOUS IMPROVEMENT TO PROCESSES AND SYSTEMS

TQM recognizes the link between product quality and customer satisfaction

Quality processes and systems will ensure quality products and services

Businesses should aim to have processes and systems in place that run smoothly

Processes need to be easy for customers as they don’t want to waste their time with long and complicated procedures

Zero Defects and Just-in-Time (JIT) systems was also introduced

Focus:Continuous

improvement of processes and

systems

Improvement in process quality

Improvement in product quality

Increase in customer

satisfaction

ORGANISATIONAL CULTURE

Beliefs, behaviours, norms and values of everyone who works in the business

It influences actions and attitudes of people in the business.

Important element of TQM is the creation and implementation of an open and supportive culture

Two important elements: Employee involvement Effective leadership and commitment from management