- Recognize different ways to ensure high quality goods and services
- Recognize the benefits of national and international quality standards
Quality Assurance
What is quality? According to the American Society for Quality, quality refers to “the characteristics of a product or service that bear on its ability to satisfy stated or implied needs.”[1]
Businesses want customers to be assured that when products and services make it to market, they’re of the highest quality. If they aren’t—if they fail to meet your expectations or to live up to claims—you may decide to avoid certain brands or give up on those products/services altogether. When companies can’t deliver quality goods or services, they risk losing trust, loyalty, and business.
Product Recalls
Nowhere are the high stakes of quality more evident than in the case of a product recall—when a company requests the return of a product after the discovery of safety issues or product defects that might endanger the consumer. Consider the recall of of 1.7 million Fitbit smartwatches. This product is a battery operated device worn on the wrist to help consumers track their exercise. However, the Fitbit Ionic’s battery was prone to overheating so much that it wearers could be burned.[2]
If you bought a Fitbit Ionic, you probably weren’t expecting that it might burn you during regular use. However, when a company has to recall products, the recall affects many more than just customers. If the company is publicly traded, the stock price may drop causing a loss for shareholders. A recall also results to lost income for retailers, who have to pull the product from their shelves. The entire supply chain is impacted by a quality failure as the company figures out whether they will change the product or discontinue it. In some cases, a recall can be so devastating that it leads to bankruptcy, as it did for the Peanut Corporation of America after peanut butter contaminated with salmonella was traced back to a processing facility it operated in Georgia.[3]
Given the serious financial and, in some cases, legal consequences of selling inferior goods or services, companies have to implement quality assurance processes to ensure that they’re producing products and offering services that meet customer expectations. In this section, you will examine just a few of the ways that companies manage the production of quality goods and services.
Statistical Process Control
Statistical process control (SPC) is a method of quality control that uses statistical or mathematical methods to monitor and control a process. The goal of SPC is to ensure that production operates at its full potential. Full potential is the point where the process produces the maximum amount of conforming product as possible with a minimum (if not the total elimination) of defective parts, rework, or scrap. SPC can be applied to any process in which the product can be measured. Key tools used in SPC include control charts with a focus on continuous improvement.
Benchmarking
Benchmarking involves comparing one business’ processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time, and cost. In the process of best-practice benchmarking, management identifies the best firms in their industry—or in another industry where similar processes exist—and compares the results and processes of those studied (the “targets”) to their own results and processes. In this way, management learns how well the targets perform and, more importantly, the business processes that explain why those other companies are successful.
Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. Benchmarking may be a one-time event but is often treated as a continuous process in which organizations continually seek to improve their practices.
- “Basic Concepts, Definitions,” American Society of Quality, (accessed November 3, 2011). http://asq.org/glossary/q.html ↵
- St. John, Allen. “Fitbit Recalls 1 Million Ionic Smartwatches Over Burn Hazard - Consumer Reports.” Consumer Reports, May 3, 2022. https://www.consumerreports.org/smartwatch/fitbit-recalls-ionic-smartwatches-due-to-burn-hazard-a1122765473/. ↵
- Wahba, Phil, and Emily Chasan. “Salmonella-Hit Peanut Company Files for Bankruptcy.” Reuters, February 13, 2009. https://www.reuters.com/article/us-peanutcorp-bankruptcy-idUSTRE51C67C20090213. ↵