Achieving Quality Production
Quality means to produce a good or a service that meets customer expectations.
Quality products help businesses:
- Establish a brand image
- Build brand loyalty
- Maintain a good reputation
- Increase sales
| Method | + | – |
| Quality control is the checking for quality at the end of the production process, whether it is the production or a product or a service. It uses quality inspectors as a way of finding any faults | Can eliminate faults before customer receives the good Less training is required for workers | Expensive as inspectors need to be paid High costs if products have to be scrapped |
| Quality assurance is the checking for quality standards throughout the production process by employees. | Tries to eliminate faults at all stages of production before passing on to next stage Fewer customer complaints Reduced costs if products need to be reworked | Expensive to train employees to check the quality of their own work. Relies on employees being committed to maintaining the set standards. |
| Total quality management (TQM) is the continuous improvement of products and processes by focusing on quality at each and every stage of production. | Quality is built into every part of production Eliminates all faults or errors No customer complaints Reduced costs Increases efficiency. | It is expensive to train all employees to check the product or service. Relies on all employees following the TQM ideology and accepting responsibility for quality. |
How can customers be assured of a quality product or service?
Quality mark issued by ISO peut-ĂȘtre
Location Decisions
If job production is used, the business is likely to be on a small scale and so the influence of the nearness of the components will be less compared to a larger business.
If flow production is used on a large scale, the location of component suppliers might be of greater importance because a large number of components will need to be transported and the costs will be high. If JIT is used then this becomes even more important.
Factors affecting location of manufacturing business
- Market
- Raw materials/components
- External economies of scale
- Availability of Labour
- Government influence
- Transport and communications
- Power and water supply
- Climate
Factors affecting location of a service sector business
- Customers
- Personal preference of the owners
- Technology
- Availability of labor
- Climate
- Near to other businesses
- Rent/taxes
Factors affecting the location of a retailing business
- Shoppers
- Nearby shops
- Customer parking
- Rent/taxes
- Access of delivery vehicles
- Security
- Legislation
Factors that a business could consider when deciding which country to locate operations
- New market overseas
- Cheaper or new sources of materials
- Difficulties with the labor force and wage costs
- Rent/tax considerations
- Availability of government grants and other incentives
- Trade and tariff barriers
The role of legal controls on location decisions
- Governments try to encourage businesses to set up and expand in areas of high unemployment
- To discourage firms from locating in overcrowded areas or on sites which are noted for their natural beauty.
How does the government influence location decisions:
- Planning regulations
- Government grant or subsidies
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