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To mitigate the quality risks and cost involved in sourcing, we recommend five actions that have been proven successful throughout the three decades of experience we have working with clients and suppliers around the world. To help ensure that potential or existing suppliers deliver high-quality products, operate efficiently, and support continuous improvement, process surveys and factory audits are performed. From supplier capability and qualification to process control and quality system audits, there are a wide range of options. More specific audits incorporate standards such as the ISO series, TS specifications for the automotive industry, social ability, sustainability, C-TPAT for security, AS for aerospace and many others. Requirements for audits do vary based on a of factors. Two commonly performed general system audits include:.
How do customers define quality?
Corporate executives and consumers have in recent years adopted divergent views of product quality. Several recent surveys indicate how wide the quality perception gap is:. Mindful of this gap, many U. Such efforts are evident in two trends. The first is the greater emphasis advertisements place on the word quality and on such themes as reliability, durability, and workmanship. The second trend is the move to quality assurance and extended service programs.
Traditional versus modern concept of quality
It takes time to cultivate customer confidence, and promotional tactics alone will not do the job. In fact, they can backfire if the claims and promises do not hold up and customers perceive them as gimmicks. To ensure delivery of advertising claims, companies must build quality into their products or services.
From a production perspective, this means a companywide commitment to eliminate errors at every stage of the product development process—product de, process de, and manufacturing.
It also means working closely with suppliers to eliminate defects from all incoming parts. Equally important yet often overlooked are the marketing aspects of quality-improvement programs. Companies must be sure they are offering the benefits customers seek. Quality should be primarily customer-driven, not technology-driven, production-driven, or competitor-driven. In developing product quality programs, companies often fail to take into two basic sets of questions.
First, how do customers define quality, and why are they suddenly demanding higher quality than in the past?
Second, how important is high quality in customer service, and how can it be ensured after the sale? As mundane as these questions may sound, the answers provide essential information on how to build an effective customer-driven quality program.
We should not forget that customers, after all, serve as the ultimate judge of quality in the marketplace. Product performance and customer service are closely linked in any quality program; the greater the attention to product quality in production, the fewer the demands on the customer service operation to correct subsequent problems. Office equipment manufacturers, for example, are deing products to have fewer manual and more automatic controls.
What is your definition of quality?
Not only are the products easier to operate and less susceptible to misuse but they also require little maintenance and have internal troubleshooting systems to aid in problem identification. The up-front investment in quality minimizes the need for customer service. Besides its usual functions, customer service can act as an early warning system to detect product quality problems. Customer surveys measuring product performance can also help spot quality control or de difficulties. And of course detecting defects early spares later embarrassment and headaches.
It is relevant at this point to consider two companies that have developed successful customer-driven quality programs: L. Bean, Inc. Although these two companies are in different businesses—L. Bean sells outdoor apparel and equipment primarily through mail-order while Caterpillar manufactures earth-moving equipment, diesel engines, and materials-handling devices, which it sells through dealers—both enjoy an enviable reputation for high quality.
Guide to deliver high quality product and satisfy customers
Some Bean recently surveyed said that quality is the attribute they like most about the company. Bean executes a customer-driven quality program by:. Asking customers to fill out a short, coded questionnaire and explain their reasons for returning the merchandise. Even stocking extra buttons for most of the apparel items carried years ago, just in case a customer needs one.
Despite recent financial setbacks, Caterpillar continues to be fully committed to sticking with its quality program, which includes:. Conducting two customer satisfaction surveys following each purchase, one after hours of product use and the second after hours of use. Maintaining a centrally managed list of product problems as identified by customers from around the world.
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Analyzing warranty and service reports submitted by dealers, as part of a product improvement program. Asking dealers to conduct a quality audit as soon as the products are received and to attribute defects to either assembly errors or shipping damages. Encouraging dealers to establish side businesses in rebuilding parts to reduce costs and increase the speed of repairs.
To understand how customers perceive quality, both L. Bean and Caterpillar collect much information directly from them.
The production-service connection
Even with such information, though, pinpointing what consumers really want is no simple task. For one thing, consumers cannot always articulate their quality requirements. Taking automobiles as an example, market data compiled by SRI International suggest that consumer priorities shifted from styling in to fuel economy in and then to quality of de and performance in Changes in the importance to customers of U.
As John F. One of the major problems facing U. Further, consumers are demanding high quality at low prices.
Some of the major influences are listed in Exhibit II. We know of no other way than to collect and analyze internal data and to monitor publicly available information. Internally generated information is obtained principally through customer surveys, interviews of potential customers such as focus group interviewsreports from salespeople, and field experiments.
Recall how L. Publicly available information of a more general nature can be obtained through pollsters, independent research organizations, government agencies, and the news media. Such sources are often helpful in identifying shifts in societal attitudes. Toward the end of the last decade, too many U. Pessimistic about what the future held, consumers began adjusting their life-styles. Integrity purchases are those made for their perceived importance to society rather than solely for personal status.
Buying a small, energy-efficient automobile, for example, can be a of personal integrity. Investment buying is geared toward long-lasting products, even if that means paying a little more. The emphasis is on such values as durability, reliability, craftsmanship, and longevity.
In the apparel business, for example, more manufacturers have begun stressing the investment value of clothing.
And life-cycle buying entails comparing the cost of buying with the cost of owning. By overlooking this fundamental shift in consumer attitudes, companies missed the opportunity to capitalize on it. If they had monitored the information available, managers could have identified and responded to the trends earlier.
As we suggested earlier, the quality of customer service after the sale is often as important as the quality of the product itself. Of course, excellent customer service can rarely compensate for a weak product. But poor customer service can quickly negate all the advantages associated with delivering a product of superior quality. At companies like L. Bean and Caterpillar, customer service is not an afterthought but an integral part of the product offering and is subject to the same quality standards as the production process.
These companies realize that a top-notch customer service operation can be an effective means of accomplishing the following three objectives:.
Different approaches for improving quality in organization
Differentiating a company from competitors. As more customers seek to extend the lives of their durable goods, the perceived quality of customer service becomes an increasingly important factor in the purchase decision. Whirlpool Corporation promises to stand by its products rather than hide behind its distribution channels; it has parlayed a reputation for effective customer service into a distinct competitive advantage that reinforces its image of quality.
Generating new sales le and discouraging switches to alternative suppliers. Keeping in regular contact with customers so as to deliver new information to them and gather suggestions for product improvements can ensure the continued satisfaction of existing customers and improve the chances of meeting the needs of potential purchasers.
Reinforcing dealer loyalty. Companies with strong customer service programs can also broaden their distribution channels more easily to include outlets that may not be able to deliver high levels of postpurchase customer service on their own.
To be effective, a customer service operation requires a marketing plan.