Quality is a factor that can affect what a consumer purchases. As consumers, we do not want a product that will fall apart the next day. We don’t want a car that will blow up if we get rear-ended. If a company produces products or services that consumers do not deem to be good, this can affect sales and also the company’s reputation. Because of this, quality is an important part of operations management. Our text defines quality as “the ability of a product or service to meet customer needs.” (Heizer 209.) This definition might seem vague, but in reality, quality can mean different things to different consumers, such as reliability, durability, or even performance. The textbook mentions that two ways quality can improve a company’s profitability are creating sales gains and reducing costs (Heizer 208.)
An example of how quality comes into play in management is the situation going on in the auto industry and the handling of vehicle quality and safety. Recently, Audi and Honda have recalled certain vehicles. The Wall Street Journal reported that Audi’s recall was a result of an air-bag deployment glitch. “Audi’s action is the latest in an industry burdened by recalls. There have been tens of millions of vehicle recalls issued this year, costing…billions of dollars and denting the reputations of executives the companies they run.” (WSJ.) This highlights the fact that when a company’s product or service is perceived to have bad quality, it will cost the company money and will impact the company’s reputation. In addition, not only will recalls affect customers’ perception of a company, but they can lead to government investigations, fines, and lawsuits, all of which will impact the company’s operations management. The article mentions that Honda is reforming its quality assurance structure and will create a new job to oversee the safety changes the company will implement.
Personally, I believe quality is a vital part of operations management. I prefer to buy and spend more for products that I know are not going to fall apart a right after purchasing them. With all of these vehicle recalls, I believe the auto industry really needs to look at its quality standards. Companies need to look at where quality ranks in its operations and consider improving the system. Quality can help a company gain a competitive advantage over others, which will lead to higher profitability and a better reputation. As the textbook mentions, quality can reduce costs and improve sales, which are two features that all companies want. For instance, a product made of higher quality material will have a lower warranty cost for the company. Also, if consumers know a company produces high quality products, they are more likely to buy from that company.
Questions for the reader:
How do you define quality? Do you think its has a big effect on operations management? What are your thoughts on the continuous product recalls?
Heizer, Jay, and Barry Render. Principles of Operations Management. Upper Saddle River. 2013. Print. 208-209.
Pfanner, Eric, Boston, William, and Megumi Fujikawa. “Audi, Honda Swept Up In Concerns Over Safety.” online.wsj.com. The Wall Street Journal, 2014. Web.