Category Archives: Quality Management

Managerial Issues

Managerial Issues

Quality will always matter to customers-so it should be a high priority for every manager. This is true for both manufacturing operations as well as services, Defining quality from the customer's perspective, however, is very difficult as it can mean different things to different people: This is one of the major challenges facing managerial today, At the same time, the level of quality being provided in the goods and services being sold today continues to increase, due in part to a combination of increased global competition and an increased knowledge of customers. Service quality is especially difficult to manage, for a variety of reasons. Unlike product quality, service quality is often highly subjective, varying from customer to customer even under identical circumstances. As a result, good service quality to one customer may be viewed as poor service quality by another. The reason that quality is difficult to define is that it is
a very broad concept that encompasses many dimensions, which vary for both goods and services. Good managers will identify those quality dimensions that are most important to their customers. Another reason managers should be concerned with. quality is that quality and cost are closely related. There are significant costs associated with producing bad products. Similarly there are costs related to providing poor service to customers. Bad quality results in dissatisfied customers who eventually take their business elsewhere.
Thus, high quality in goods and services is essential to maintain customer loyalty and long-term customer relationships, which has been shown to significantly increase
profits. With the growth in global competition, the markets for goods and services has shifted from being a producers' major where customers are at the mercy of the firms that
are providing the goods and services, to being a. consumers market, where customers have a wide variety of sources from which to by the goods and services they desire. This trend is expected to only increase as more and more consumers purchase goods and services on the Internet from literally any corner of the world. In such a highly competitive environment, managers are acknowledging the importance of customer loyalty, and recognize .



Sunny Fresh Foods (SFF)manufactures and distributes more than 160 different egg-based food products to more than 1,200 food service operations across the United States: Its customers in quick-serve restaurants, schools, hospitals and convenience stores. Competing with about 40 other' companies, SFF is ranked second in its industry (up from 14th in 1988) with than -a 19 percent market share in the United States. The ,999 recipient of the Malcolm Bad  National Quality Award in the small business category attributes much of its success to its high levels of customer satisfaction. One hundred percent of its customers are "satisfied" or "very satisfied" with SFF in three of its five key  categories-on-time delivery, technical support, and customer service access-and more than 90 percent are "satisfied" or "very satisfied" in the remaining two categories: product performance and product freshness. Not coincidentally, claims filed by its customers have decreased dramatically from initially low levels to what is now better than six sigma levels of quality Its combination of innovative new products, a near-perfect record for on-time delivery, and resulting high level of customer satisfaction has been a major factor in SFF becoming the sole supplier for several major national restaurant chains. In addition, many of its customers h~ye recognized SFF's superior performance with supplier awards. As proof that providing high quality products and services pays, SFF's return on gross investment tripled between 1994 and 1999, and it experienced an average increase in operating profits of 25 percent per year over the same five-year period.

Quality Management

Chapter Objectives

• Introduce those individuals, often referred to as quality gurus who have played a significant role in the evolution of quality management 1. and describe their specific contributions.

• Identify the different dimensions of quality as they relate to bond goods and services

• Define the various elements that comprise he cost of quality

• Describe the more successful management quality initiatives such
as total quality management (TOM) and six sigma.

• Present the various quality awards and recognition that promote
and encourage firms to provide high-quality goods and services.