Author: vestina30113f14

It’s just not the same

Posted on by vestina30113f14

According to Investopedia.com quality management is the act of overseeing all activities and tasks to maintain a desired level of excellence. Quality management is an important part of operations management, and is one of the top priorities in a business that produces not only goods, but services. Lots of times companies encounter an issue where they have to compromise quality in order to increase profits. In our puppet class activity, we discussed the importance of having a unified quality standard. When one department thinks something may be acceptable, and the next department doesn’t let it go through then that becomes a vicious cycle of resource waste. What happens when a huge client or huge profits are on the line? In those cases this may result in ethical issues.

There are many people out there that choose the items they buy based on either the price, or the reputation of the company. It costs millions of dollars for companies to establish a reliable and trustworthy reputation; it also costs them to maintain that reputation. Eventually companies strive to increase their profit by increasing their productivity, without diminishing their quality. Productivity can be increased by perfecting the process by which the product is produced, or being able to obtain cheaper raw materials.

What happens to companies that have a wide breadth of products? We would hope that a company with a good reputation would make sure each and every one of their products is maintaining its quality; unfortunately that is not always the case.  Let’s take a look at a company that is widely respected, with a huge range of products.

Lancôme is one of those companies that has a wide breadth products. Although it’s all cosmetics, they range from face wash to eye shadows, to lipsticks. For the past couple of years I have been a huge fan of their voluminous mascara, and have suggested it to all of my friends. No matter how many new types of mascara Lancôme came out with, or other companies came out with; I never felt the need to make a change.

After a couple years of using that mascara, I felt it wasn’t doing the job quite the same. At first I thought it might have been a while that I had it, and it might have dried up. After I bought a couple more, I realized that the mascara was simply not the same. It looked the same, and was at the same price point, but it seemed that the quality had diminished. I don’t know if it was just the color or type I was buying, but I was no longer happy with the results.

I was very disappointed, and had to go through a few new ones to find one that I liked. I guess that’s what happens as new items are released by a company; more resources are put towards those products, and the old ones become less relevant. On the other hand,  the voluminous mascara is part of the cheaper line of products within the company. The low cost of the product might make it a little more difficult to maintain the quality when compared to their higher end products.

Do you guys think that companies with a more narrow scope of products tend to maintain quality a little better?

Is cost a direct reflection of the quality, even if it’s produced by a highly respected company?

 

 

http://www.investopedia.com/terms/q/quality-management.asp

Inventory IS Important

Posted on by vestina30113f14

According to Brightpearl, a business management software company, keeping track of accurate inventory is not only essential for great customer service, but also for keeping accurate accounting records and having an efficiently running business. For certain business inventory may be as simple as office supplies for the employees, or as important as goods that are being sold to customers. Brightpearl has emphasized 10 main reasons for why keeping accurate track of inventory is important.

  1. Loss of sales due to out of stock items
  2. Loss of cash in overstock of inventory
  3. Improve accounting and profit reporting
  4. Identifying issues early on
  5. Customer Service
  6. Efficient Re-ordering
  7. Minimizing theft and losses
  8. Trust in your information systems
  9. Minimize warehouse costs
  10. Efficient stock take and end-of-year process

All ten of these reasons are great motivators to implement a more accurate inventory count within a business. I have witnessed firsthand what happens to a business that has no inventory tracking structure. I previously worked at a fitness club that had a section dedicated to nutrition and athletic clothing sales, and in the two years that I worked for that company I never saw a productive account of inventory. Every so often we would have a group of corporate representatives that came in to take count of our inventory. I was not surprised that they would report a huge loss for us; the thing that did shock me was they acknowledged the loss as if it was completely normal and acceptable. When looking at the ten reasons as to why taking inventory is crucial, I can definitely point out several things that took a hit by not being proactive with it.

In regards to customer service and losing sales, there were multiple instances where customers decided to opt out of a purchase because we didn’t have the products that they wanted. As customer service and sales representatives we had two options to help them; we could either try to transfer a certain product that they wanted from another location, or we could ask our manager to check if it will be on our next purchasing order.  The problem with those solutions was that we weren’t able to close that sale, since nobody would want to pre-pay for a product they were not receiving.

Another huge issue was that our inventory would consistently cause inaccuracies with our purchasing orders. Since there was no theft or loss reported, purchasing managers thought that we still had certain products and wouldn’t place an order for them. The fact that we were not aware of the losses as they were happening, would carry over for when corporate would come in and result in a huge sum of money that was being lost.

In our case, upper management was not interfering with the fact that their investment was being accounted for as a loss. In order to make other people want to be responsible, they had to implement it at the top.

From a managerial standpoint, would you rather invest money into keeping an accurate inventory, or save your time and money and focus on making sales, accepting the loss as a natural aspect of business?

 

https://www.brightpearl.com/sites/default/files/10-Reasons-Why-Accurate-Inventory-is-Important_0.pdf