FAQs

In essence, a business management system is about quality assurance across your business, so this is about doing your best, knowing what is regarded to be “good”, knowing your performance, checking your performance against a standard and making improvements where you see an opportunity. This is documented so that everyone in the business understands it and it helps control documentation, risks, objectives, KPIs, management reviews, continuous improvement and creates consistency.

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Think of the business management system in terms of baking a cake; you start with the right equipment (oven), the correct ingredients, you have the recipe, you then follow the recipe (procedure), you ensure the correct utilisation of equipment (oven temperature and time), the mix then transforms into a cake, you decorate to add value and you sell a quality product.

The "Cost of Poor Quality" refers to the financial, operational, and reputational consequences that businesses incur when their products or services do not meet the desired standards or fail to satisfy customer expectations. This concept encompasses various aspects of subpar quality, including defects, errors, inefficiencies, and inadequate processes.

Key Points:

1. Internal and External Costs: The cost of poor quality includes both visible and hidden expenses. Visible costs may involve warranty claims, rework, and customer returns. Hidden costs can be less obvious, such as decreased customer loyalty, damaged brand reputation, and decreased employee morale.

2. Prevention vs. Appraisal Costs: Quality management strategies often focus on two main cost categories: prevention and appraisal. Prevention costs are those incurred to prevent defects from occurring, such as training programs or process improvements. Appraisal costs are associated with inspecting and testing products or services to identify defects.

3. Failure Costs: When poor quality results in defective products reaching customers, failure costs arise. These include the cost of fixing defects, warranty claims, legal expenses, and potential damage to the organization's reputation.

4. Impact on Profitability: High costs of poor quality directly affect a company's profitability. By reducing defects and improving quality, businesses can increase efficiency, lower costs, and enhance customer satisfaction, ultimately leading to higher revenues.

5. Continuous Improvement: To mitigate the cost of poor quality, many organizations adopt quality management methodologies like Six Sigma, Lean, or Total Quality Management (TQM). These approaches focus on identifying the root causes of quality issues and implementing processes to prevent them.

6. Customer-Centric Approach: Maintaining high-quality standards is essential for retaining customer trust and loyalty. Companies that consistently provide quality products or services not only reduce costs but also create long-term customer relationships.

In summary, understanding and addressing the cost of poor quality is fundamental for businesses aiming to thrive in competitive markets. By proactively investing in quality management, organizations can reduce waste, enhance customer satisfaction, and ultimately achieve sustainable growth

There are 8 principles that we use when looking at your business these are:

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1. Customer focus – this is not only about existing customers but also about being the first to market with a new product or service

2. Leadership – leaders must build the capabilities of people, build teams of mutually supporting members and establish unity of purpose and the direction that the organisation must take.

3. Involvement of people – the business needs to develop a culture in which everyone in the business from top to bottom is involved in order to become the best in the industry. In order to do this quality circles or other forms of self-managing approaches are required.

4. Process approach – every person in the operations process is the customer of the previous process and the supplier of the next process, so the question of does the internal supplier meet our needs and does the operations meet their internal customer needs?

5. Systems approach – the business needs to understand and manage interrelated processes as a system which contributes to the business’s effectiveness and efficiency in achieving objectives

6. Continuous improvement – the business needs a structured and disciplined approach to continuous improvement to ensure that the rate of improvements count.

7. Factual approach – the business needs to analyse data and information to ensure that decisions are based on facts and to understand the gap between the current and future state

8. Mutual beneficial supplier relationships – the supplier must become an extension of the business’s own processes with the control coming from the business therefore, the business cannot abdicate responsibility for the quality of its product or service to the supplier.