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business Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit." Having a business name does not separ ...
,
engineering Engineering is the use of scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad range of more speciali ...
, and
manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to ...
, quality – or high quality – has a pragmatic interpretation as the non-inferiority or superiority of something (
goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not ...
or services); it is also defined as being suitable for the intended purpose (fitness for purpose) while satisfying customer expectations. Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or
sustainable Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...
. In such ways, the subjectivity of quality is rendered objective via
operational definition An operational definition specifies concrete, replicable procedures designed to represent a construct. In the words of American psychologist S.S. Stevens (1935), "An operation is the performance which we execute in order to make known a concept." F ...
s and measured with metrics such as proxy measures.


Description

There are many aspects of quality in a business context, though primary is the idea the business produces something, whether it be a physical good or a particular service. These goods and/or services and how they are produced involve many types of processes, procedures, equipment, personnel, and investments, which all fall under the quality umbrella. Key aspects of quality and how it's diffused throughout the business are rooted in the concept of
quality management Quality management ensures that an organization, product or service consistently functions well. It has four main components: quality planning, quality assurance, quality control and quality improvement. Quality management is focused not on ...
: # Quality
planning Planning is the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. The evolution of forethought, the capacity to think ahead, is c ...
is implemented as a means of "developing the products, systems, and processes needed to meet or exceed customer expectations." This includes defining who the customers are, determining their needs, and developing the tools (systems, processes, etc.) needed to meet those needs. #
Quality assurance Quality assurance (QA) is the term used in both manufacturing and service industries to describe the systematic efforts taken to ensure that the product(s) delivered to customer(s) meet with the contractual and other agreed upon performance, design ...
is implemented as a means of providing enough confidence that business requirements and goals (as outlined in quality planning) for a product and/or service will be fulfilled. This error prevention is done through systematic measurement, comparison with a standard, and monitoring of processes. #
Quality control Quality control (QC) is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "a part of quality management focused on fulfilling quality requirements". This approach place ...
(QC) is implemented as a means of fulfilling quality requirements, reviewing all factors involved in production. The business confirms that the good or service produced meets organizational goals, often using tools such as
operational auditing Operational audit is a systematic review of effectiveness, efficiency and economy of operation. Operational audit is a future-oriented, systematic, and independent evaluation of organizational activities. In Operational audit financial data may ...
and
inspection An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity. ...
. QC is focused on process output. #
Quality improvement Quality management ensures that an organization, product or service consistently functions well. It has four main components: quality planning, quality assurance, quality control and quality improvement. Quality management is focused not on ...
is implemented as a means of providing mechanisms for the evaluation and improvement of processes, etc. in the light of their efficiency, effectiveness, and flexibility. This may be done with noticeably significant changes or incrementally via
continual improvement A continual improvement process, also often called a continuous improvement process (abbreviated as CIP or CI), is an ongoing effort to improve products, services, or processes. These efforts can seek "incremental" improvement over time or "breakth ...
. While quality management and its tenets are relatively recent phenomena, the idea of quality in business is not new. In the early 1900s, pioneers such as Frederick Winslow Taylor and Henry Ford recognized the limitations of the methods being used in mass production at the time and the subsequent varying quality of output, implementing quality control, inspection, and standardization procedures in their work. Later in the twentieth century, the likes of
William Edwards Deming William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant. Educated initially as an electrical engineer and later specializing in mathematica ...
and Joseph M. Juran helped take quality to new heights, initially in Japan and later (in the late '70s and early '80s) globally. Customers recognize that quality is an important attribute in products and services, and suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (the quality gap). In the past two decades this quality gap has been gradually decreasing between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacturing to countries like China and India, as well internationalization of trade and competition. These countries, among many others, have raised their own standards of quality in order to meet international standards and customer demands. The ISO 9000 series of standards are probably the best known international standards for quality management, though specialized standards such as ISO 15189 (for medical laboratories) and
ISO 14001 ISO 14000 is a family of standards related to environmental management that exists to help organizations (a) minimize how their operations (processes, etc.) negatively affect the environment (i.e. cause adverse changes to air, water, or land); (b) ...
(for environmental management) also exist. The business meanings of ''quality'' have developed over time. Various interpretations are given below: # American Society for Quality: "A combination of quantitative and qualitative perspectives for which each person has his or her own definition; examples of which include, "Meeting the
requirements In product development and process optimization, a requirement is a singular documented physical or functional need that a particular design, product or process aims to satisfy. It is commonly used in a formal sense in engineering design, inclu ...
and expectations in service or product that were committed to" and "Pursuit of optimal solutions contributing to confirmed successes, fulfilling accountabilities". In technical usage, quality can have two meanings: #:a. The characteristics of a product or service that bear on its ability to satisfy stated or implied needs; #:b. A product or service free of deficiencies." # Subir Chowdhury: "Quality combines people power and process power." #
Philip B. Crosby Philip Bayard "Phil" Crosby, (June 18, 1926 – August 18, 2001) was a businessman and author who contributed to management theory and quality management practices. Crosby initiated the Zero Defects program at the Martin Company. As the quali ...
: "Conformance to requirements." The requirements may not fully represent
customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchan ...
expectations; Crosby treats this as a separate problem. # W. Edwards Deming: concentrating on "the efficient production of the quality that the market expects," and he linked quality and management: "Costs go down and productivity goes up as improvement of quality is accomplished by better management of design, engineering, testing and by improvement of processes." # Peter Drucker: "Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for." # ISO 9000: "Degree to which a set of inherent characteristics fulfills requirements." The standard defines ''requirement'' as need or expectation. # Joseph M. Juran: "Fitness for use." Fitness is defined by the customer. #
Noriaki Kano Noriaki Kano (狩野紀昭 ''Kanō Noriaki,'' pronounced ) is a Japanese educator, lecturer, writer, and consultant in the field of quality management. He is the developer of a customer satisfaction model (now known as the Kano model) whose simp ...
and others, present a two-dimensional model of quality: "must-be quality" and "attractive quality." The former is near to "fitness for use" and the latter is what the customer would love, but has not yet thought about. Supporters characterize this model more succinctly as: " Products and services that meet or exceed customers' expectations." # Robert Pirsig: "The result of care." # Six Sigma: "Number of defects per million opportunities." # Genichi Taguchi, with two definitions: #:a. "Uniformity around a target value." The idea is to lower the
standard deviation In statistics, the standard deviation is a measure of the amount of variation or dispersion of a set of values. A low standard deviation indicates that the values tend to be close to the mean (also called the expected value) of the set, whil ...
in outcomes, and to keep the range of outcomes to a certain number of standard deviations, with rare exceptions. #:b. "The loss a product imposes on society after it is shipped." This definition of quality is based on a more comprehensive view of the production system. # Gerald M. Weinberg: "Value to some person".


Market sector perspectives


Operations management

Traditionally, quality acts as one of five operations/project performance objectives dictated by operations management policy. Operations management, by definition, focuses on the most effective and efficient ways for creating and delivering a good or service that satisfies customer needs and expectations. As such, its ties to quality are apparent. The five performance objectives which give business a way to measure their operational performance are: * quality, measuring how well a product or service conforms to specifications; * speed (or response time), measuring the delay between customer request and customer receipt of a product or service; * dependability, measuring how consistently a product or service can be delivered to meet customer expectation; * flexibility, measuring how quickly the business can adapt to a variety of market changes; and *
cost In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in whic ...
, measuring the resources (and by extension, financed) required to plan, deliver, and improve the finished good or service. Based on an earlier model called the sand cone model, these objectives support each other, with quality at the base. By extension, quality increases dependability, reduces cost, and increases customer satisfaction.


Manufacturing

The early 1920s saw a slow but gradual movement among manufacturers away from a "maximum production" philosophy to one aligned more closely with "positive and continuous control of quality to definite standards in the factory." That standardization, further pioneered by Deming and Juran later in the twentieth century, has become deeply integrated into how manufacturing businesses operate today. The introduction of the ISO 9001, 9002, and 9003 standards in 1987 — based on work from previous British and U.S. military standards — sought to "provide organizations with the requirements to create a
quality management system A quality management system (QMS) is a collection of business processes focused on consistently meeting customer requirements and enhancing their satisfaction. It is aligned with an organization's purpose and strategic direction (ISO 9001:2015). I ...
(QMS) for a range of different business activities." Additionally,
good manufacturing practice Current good manufacturing practices (cGMP) are those conforming to the guidelines recommended by relevant agencies. Those agencies control the authorization and licensing of the manufacture and sale of food and beverages, cosmetics, pharmaceut ...
(GMP) standards became more common place in countries around the world, laying out the minimum requirements manufacturers in industries including
food Food is any substance consumed by an organism for nutritional support. Food is usually of plant, animal, or fungal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals. The substance is in ...
and beverages,
cosmetics Cosmetics are constituted mixtures of chemical compounds derived from either natural sources, or synthetically created ones. Cosmetics have various purposes. Those designed for personal care and skin care can be used to cleanse or protec ...
, pharmaceutical products, dietary supplements, and
medical device A medical device is any device intended to be used for medical purposes. Significant potential for hazards are inherent when using a device for medical purposes and thus medical devices must be proved safe and effective with reasonable assura ...
s must meet to assure their products are consistently high in quality. Process improvement philosophies such as Six Sigma and Lean Six Sigma have further pushed quality to the forefront of business management and operations. At the heart of these and other efforts is often the QMS, a documented collection of processes, management models, business strategies, human capital, and information technology used to plan, develop, deploy, evaluate, and improve a set of models, methods, and tools across an organization for the purpose of improving quality that aligns with the organization's strategic goals.


Service sector

The push to integrate the concept of quality into the functions of the service industry takes a slightly different path from manufacturing. Where manufacturers focus on "tangible, visible, persistent issues," many — but not all — quality aspects of the service provider's output are intangible and fleeting. Other obstacles include management's perceptions not aligning with customer expectations due to lack of communication and market research and the improper or lack of delivery of skill-based knowledge to personnel. Like manufacturing, customer expectations are key in the service industry, though the degree with which the service interacts with the customer definitely shapes perceived service quality. Perceptions such as being dependable, responsive, understanding, competent, and clean (which are difficult to describe tangibly) may drive service quality, somewhat in contrast to factors that drive measurement of manufacturing quality.


Quality in Japanese culture

In Japanese culture, there are two types of quality: ''atarimae hinshitsu'' and ''miryokuteki hinshitsu''. * ''atarimae hinshitsu'' – The idea that things will work as they are supposed to (e.g. a pen will write). The functional requirement actually. For example, a wall or flooring in a house have functional parts in the house as a product; when the functionality is met, the "atarimae" quality requirement is met. * ''miryokuteki hinshitsu'' (魅力的品質)– The idea that things should have an aesthetic quality which is different from "atarimae hinshitsu" (e.g. a pen will write in a way that is pleasing to the writer, and leave behind ink that is pleasing to the reader). The floor and wall example can be expanded to include the color, texture, shine, polish, etc., which are the "miryokuteki" aspects. Such aspects comprise a very important part of the quality, and add value to the product. In the design of goods or services, ''atarimae hinshitsu'' and ''miryokuteki hinshitsu'' together ensure that a creation will both work to customers' expectations and also be desirable to have.


Quality management techniques

*
Quality management system A quality management system (QMS) is a collection of business processes focused on consistently meeting customer requirements and enhancing their satisfaction. It is aligned with an organization's purpose and strategic direction (ISO 9001:2015). I ...
s * Total quality management (TQM) *
Design of experiments The design of experiments (DOE, DOX, or experimental design) is the design of any task that aims to describe and explain the variation of information under conditions that are hypothesized to reflect the variation. The term is generally associ ...
**
Fractional factorial design In statistics, fractional factorial designs are experimental designs consisting of a carefully chosen subset (fraction) of the experimental runs of a full factorial design. The subset is chosen so as to exploit the sparsity-of-effects principle t ...
**
Optimal design In the design of experiments, optimal designs (or optimum designs) are a class of experimental designs that are optimal with respect to some statistical criterion. The creation of this field of statistics has been credited to Danish statistic ...
**
Response surface methodology In statistics, response surface methodology (RSM) explores the relationships between several explanatory variables and one or more response variables. The method was introduced by George E. P. Box and K. B. Wilson in 1951. The main idea of RSM ...
* Continuous improvement * Six Sigma * Statistical Process Control (SPC) * Quality circles * Requirements analysis *
Verification and validation Verification and validation (also abbreviated as V&V) are independent procedures that are used together for checking that a product, service, or system meets requirements and specifications and that it fulfills its intended purpose. These are ...
* Zero Defects *
Service quality Service quality (SQ), in its contemporary conceptualisation, is a comparison of perceived expectations (E) of a service with perceived performance (P), giving rise to the equation SQ=P-E. This conceptualistion of service quality has its origins in t ...
* SERVQUAL * Theory of Constraints (TOC) *
Business process management Business process management (BPM) is the discipline in which people use various methods to discover, model, analyze, measure, improve, optimize, and automate business processes. Any combination of methods used to manage a company's business p ...
(BPM) * Business process re-engineering *
Capability maturity model The Capability Maturity Model (CMM) is a development model created in 1986 after a study of data collected from organizations that contracted with the U.S. Department of Defense, who funded the research. The term "maturity" relates to the degree o ...
s * Quality function deployment (QFD)


Quality awards

* Deming Prize *
EFQM Excellence Award The EFQM Excellence Award now known as The EFQM Global Award is a quality award that recognises European businesses with "excellent and sustainable results" across all areas of The EFQM Model. It was established in October 1991 as the European Q ...
* Malcolm Baldrige National Quality Award


See also

* Common law of business balance * Eight dimensions of quality *
Innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed enti ...
and
Tax deduction Tax deduction is a reduction of income that is able to be taxed and is commonly a result of expenses, particularly those incurred to produce additional income. Tax deductions are a form of tax incentives, along with exemptions and tax credits ...
* ISO 9000 * Metaphysics of quality *
Quality assurance Quality assurance (QA) is the term used in both manufacturing and service industries to describe the systematic efforts taken to ensure that the product(s) delivered to customer(s) meet with the contractual and other agreed upon performance, design ...
*
Quality control Quality control (QC) is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "a part of quality management focused on fulfilling quality requirements". This approach place ...
*
Quality engineering Quality engineering is the discipline of engineering concerned with the principles and practice of product and service quality assurance and control. In software development, it is the management, development, operation and maintenance of IT sys ...
*
Quality investing Quality investing is an investment strategy based on a set of clearly defined fundamental criteria that seeks to identify companies with outstanding quality characteristics. The quality assessment is made based on soft (e.g. management credibility) ...
* Six Sigma *
Software quality In the context of software engineering, software quality refers to two related but distinct notions: * Software functional quality reflects how well it complies with or conforms to a given design, based on functional requirements or specificatio ...
* Theory of constraints * W. Edwards Deming * List of economics topics * List of production topics


References


Bibliography

* Boone, Louis E. & Kurtz, David L., Contemporary Business 2006, Thomson South-Western, 2006 * Rochfort Scott, Charles & Hamerton, Robert Jacob, ''Rambles in Egypt and Candia: With Details of the Military Power and Resources of Those Countries, and Observations on the Government, Policy, and Commercial System of Mohammed Ali'', Volume I, H. Colburn, London, 1837


External links


Quality Management links
{{DEFAULTSORT:Quality (Business) Product management Quality management