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Quality affects a company in a variety of ways, from productivity and profitability to customer satisfaction and public perception. In addition, quality affects the overall operating costs of a company. Focusing on quality helps keep a company strong in all areas.
Productivity
Poor quality costs a company money in terms of productivity problems. If a company uses low-quality parts, systems break down, regardless of any high-quality parts also used. Low-quality parts can cause mechanical breakdowns, as well as work slowdowns or even stoppages.
Profitability
Quality increases profitability. When employees are engaged in a work environment in which teamwork is emphasized and where quality products are the goal, the work environment flows more smoothly than one in which quality is an afterthought.
Customer Satisfaction
Quality has a direct bearing on customer satisfaction. If a company produces a quality product, satisfied customers will rank that company higher in surveys than companies that fail to provide quality products or services. In addition, dissatisfied customers are more vocal in their criticisms of a company with quality problems. Various websites will rank different companies according to customer satisfaction and quality products. Poor companies may get an initial sale of a product or service but it will not create repeat customers.
Costs
Quality directly affects costs in a business. While using less expensive parts and equipment might cut costs in the short term, the long-term effects might be far more expensive. For example, using certain software that costs less might save a company money in the short term, but that software might be more complicated than more expensive software or lack customer service. In that case, employees will take longer to understand how to use the software. On top of that, if a problem arises with the software, the lack of customer support means it takes longer to accomplish the job, thereby costing the company more money than if it had used a more expensive, higher quality software product.
What Businesses Can Do
Focusing on quality can help a business maintain a satisfied customer base. In turn, this means the business might continue turning a profit. If a business is not profitable, examining the quality of the product or service is an important step to finding a solution. When focusing on quality, it must be a team effort, with everyone within the company committed to implementing any quality changes managers mandate. Although the initial cost might seem expensive, the overall costs of ensuring delivery of quality products and services might prove to be less than expected.
Cost of poor quality leads to
1. Market loss
2. Customer loss
3. Business loss
4. High servicing cost
5. High operating cost
