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The Role Of Quality In Business The current Quality drive has brought many areas of expertise together.

We

see,for example , operations res earch, project management, e conomics, statis tics,systems an alysis, various branches of en gineering, mark

eting, general a ndstrategic management, financial management, and many others coming togetherto achieve the

best output for the organisation. The aim of the drive to improveand sus tain Quality is p rimarily to impr ove business p

erformance (thr oughreducing poor quality and related costs) and to develop a conducive corporateculture to do this.

Measuring Quality And Performanc e To be able to have a tangible effect on improving business

performance, Qualitystrategy must determine what is being done and then suggest ways of betteringit. This involves

different methods of measuring performance. Some of thesemethods are:

measurement against internal standards

measurement against customer needs business performance

measurements in financial terms

benchmarking internally and externally to set best standards

Quality measur ements that ar e holistic and s eek determinin g of totalperfor mance.We will now briefly consider each of these methods

and outline what they imply.

Internal stand ards: The elements t hat these would typically look a tinclude the direct cost

of maintaining quality:
o

warranty
o

cost of failure to perform to specifications


o

costs of setting up and

maintaining measures to prevent failure


o

inspection costs
o

on time delivery
o

success of first performance


o

value added
o

manpower costs, including cost of not having suitable personnel


o

inventory levels and turnover


o

profit from performance.

Customer needs: The most often used methods of measuring customersatisfa ction are to

measure complaints and claims. There is a fundamentalpro blem with this system of measurement because it is

widely reportedthat on ly 4% of dissat isfied customer s actually take the trouble toc omplain (see for example

Bergman and Klefsjo 1994, p. 287). However, each dissatisfied customer will speak to 11 others about his

experience,whil e a satisfied customer speaks to only three (this in itself is a measureof how we have come to expect Quali

ty in our daily dealings). Thei mplication of all this is to actually carry out customer focused studies toget a true

picture of customer sentiment.

Business performance: The basics of measuring business performanceare

to determine corporate against set goals. In measuring performanceaga inst goals, it is important to take into

account factors like changes inthe market, t he business pe rforming its fu nctions as desi gned, therespo nse to changing market needs,

the time taken to respond to suchchanges, and the outcomes, measured both in financial and market shareterms. Ke

y to studying business perfo rmance is to i nclude th

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