A quality issue that impacts productivity thus cost
Quality assurance and control and productivity usually seem to sharea see-saw in any business. I am asserting this taking into considerationthe fact that, in order to make sure the product is at its highest quality,you need to spend more time ensuring the quality control. This, however,is not only non-productive and decreases the productivity of the company(considering the fact that you produce less because you verify more), butalso increases the costs, most of them costs that will not be recuperated In order to exemplify my statement, we will be considering the caseof a company producing any type of goods. The chain of the product israther simple and could be summarized into two large parts: productionitself and marketing and sales. Assuming that the company has a well-developed market, with an increasing potential target, we will be facing
In the second case, the company decides to allocate more time andresource to the product's quality. This is whereit is most likely that the marketing/sales and production people will comeinto conflict with the QA department. However, onthe other side, more QA means less products produced, a decreasingproductivity and higher costs per product for the company. Lower production costs will mean higher profit margins for thecompany. However, in this case, quality assurance and control is neglected, thuscreating the premises for lower quality products. The impact that such a scenario has on thecompany's image is great. Indeed, if thecompany has a well-established market, we may assume that it will be ableto produce as much as possible and sell to the already developed clientele. However, on the other side, we have to consider the negativeimpact this will have on the company's image: the clientele will either getused to the lower quality products, associating the company with suchproducts, or, in the worst scenario, it will migrate towards othercompanies. Of course, the company gains on onehand from better products and for the better image it will have on themarket (it will be associated with high quality products). On one side, this is a positive impact, because the product costis lower, as the company has decided to spend less on the quality assuranceprocess. Thus, we can resume and say that one of the negativeconsequences of ignoring quality is the possible migration of the existingclientele towards other companies. It become essential thus for a company to be able to make the bestdecision and decide whether it needs to spend more time and money onimproving quality or it is best to aim for high sales, no matter thequality. ll the time producing, ignoring thus thequality assurance and control and (2) allocate more time, effort andresources towards the quality assurance process. On one side, this is beneficial for thecompany, because it will mean better products and a different image on themarket than the one I have described in the lines here above. In this case, the company has a very low stock value, because theinventory turnover is high (the company sells as fast as it produces).
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