Product Quality
- 1. N T O C N U IO OD T R C P U D ’S O N TR VI T Y IN AR LI G UA Q
- 2. INTRODUCTION ON GRVIN’S PRODUCT QUALITY About the Author : • A professor of business administration at Harvard Business School. • Researcher in general management and strategic change. • An author of 10 books, articles and case studies. • He was an economist for the Federal Trade Commission and the Sloan Commission on Government and Higher Education. He has served on the board of overseers of the Malcolm Baldrige National Quality Award, the Manufacturing Studies Board of the National Research Council, and the board of directors of Emerson Hospital.
- 3. GARVIN’S “PRODUCT QUALITY” Important competitive issue. Academic literature on quality has not reviewed extensively. Philosophy, economics, marketing, and operation management have considered the subject on their own vantage points. There are few key important facts to be consider in his study, they are: 1. Five approaches to define quality 2. Eight dimensions of quality. 3. The strategic importance of quality. 4. Correlates of quality.
- 4. FIVE APPROACHES TO DEFINE QUALITY 1.Transcendent Approach This means quality is achieved through experience 2.Product based Approach This is reflected by differences in product and its ingredients or attributes. 3.User based Approach Based on personal views and idiosyncrasies. Durability is the key factor. 4.Manufacturing based Approach This approach is focused on cost reduction, And concerned with manufacturing and engineering. 5.Value based Approach This approach is based on cost and prices. Better performance at lower cost is recognized as a quality product.
- 5. DIMENSIONS OF QUALIT Y The Basic Elements of a product quality 1. 2. 3. 4. 5. 6. 7. 8. Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived Quality
- 6. PERFORMANCE •Refers to the primary operating characteristics EX : Car -Acceleration , Braking, Handling •The degree of the performance varies according to the performance class Toyota Prius bugatti veyron 0-60 mph – 2.7sec Acceleration 0-60 mph – 9sec
- 7. FEATURES •Additional characteristics that enhance the appeal. •Secondary aspects of performance. •Ex – Cruise control, Leather seats, Smart parking
- 8. RELIABILITY •The likelihood that the product will not fail within a specific time period •The common measure of reliability is the failure rate per unit time
- 9. CONFORMANCE •To what extent the product design and the operating characteristics meet the preestablished standards. • What is “tolerance stack-up” ? •service businesses, measures of conformance normally focus on accuracy and frequent mistakes.
- 10. DURABILITY The length of a product’s life. But Product can be repaired, estimating durability is more complicated. Durability can be defined as: The amount of use one gets from a product before it breaks down Reliability and Durability are closely linked.
- 11. SERVICEABILITY Serviceability means the consumer's ease of obtaining repair service This includes: • Responsiveness of service personnel •Willingness of repair personnel •Reliability of service •Speed
- 12. AESTHETICS •Aesthetics refers to how the product looks, feels, sounds, tastes or smells. •This is a matter of personal judgement
- 13. PERCEIVED QUALITY •Reputation is the primary stuff of perceived quality •The perceived quality may be base on images, advertising and brand names. •Perception is not always reality. •Defers from person to person.
- 14. CORRELATES OF QUALITY Quality and Price The relationship between Quality and price runs in both ways. It varies due to customer perceptions , information available , brand name etc. Quality and Advertising Two main types of goods : Search goods and Experienced goods Experienced High quality products needs more advertising than low quality products. Shows a positive relationship in many aspects.
- 15. CORRELATES OF QUALITY Quality and Market Share This depends on how quality is defined When quality is defined by premium prices - Negative relationship. When quality is defined by fitness for purpose -Positive relationship.
- 16. QUALIT Y AND PROFITABILIT Y • To improve quality, the performance, features and other dimensions should be improved in order to gain large market shares and higher profits. • To minimize defects and failures which tends to lower reworks and inspection costs, results in quality improvements and increased profits. • High improved quality brings in a high return on investment (ROI) on any market share and tends to lower costs and increase profits. • High quality brings high reputation for the product, which a premium price can be charged and this increases profits. • High quality achieves economies of scale due to cost savings, which results to increase in profits.
- 17. QUALITY AND COST In the theoretical perspective, it is assumed that quality and cost are positively related. Another point which says that quality and cost is inversely related, that when quality is improved, it reduces costs such as reworks, scrap and warrants. Quality costs are the cost of manufacturing and it should only incurred one time if the product is made to its highest quality at the first time and does not result in reworks. Investing in new machinery and technology will reduce costs and improve quality and experience economies of scale.
- 18. Summary
- 19. Thank You !