“The bitterness of poor quality is remembered long after the sweetness of low price” is the saying when buyer’s remorse is experienced.
I once purchased shock absorbers from a supplier after shopping around for a cheaper price. I paid an auto mechanic to fit the shock absorbers. After a few months, the shock absorbers started to malfunction, oil was leaking from the shock absorbers and my vehicle was unstable on the road. I realised that I bought shock absorbers of an extremely inferior quality. I was extremely upset about the bad purchase decision. I decided I shall never again buy any product or service of an inferior quality. I am prepared to pay more for a decent quality product or service that provides value for money i.e. it is durable, it serves its purpose and provide the expected benefits.
Other extreme examples of inferior quality products are collapsed buildings where inferior quality materials were used, poorly skilled construction workers were employed and where corners have been cut. Another example is poor service delivery in local, provincial and national governments.
Quality must be one of the top priorities in running an organisation. In fact, quality must not be an option for any organisation. Excellent quality must be a minimum standard for every organisation. Quality is therefore a critical success factor. Organisations that do not provide quality goods and services do not survive.
HOW DOES AN ORGANISATION PROVIDE QUALITY GOODS AND SERVICES
Quality must be designed into an organisation. Quality must be a process. Quality must be a culture. Quality must be produced consistently. Quality must be monitored, measured and tested continuously throughout the production/value creation process. In order to produce quality products and services consistently, organisations must design and build resilient, efficient and effective quality operations.
Excellent quality operations is made up of the following:
- A culture and value system of quality
Top management must drive quality from the top. It must continuously communicate the importance of quality to the rest of the organisation. It must also create an environment that is conducive to quality.
- Attracting, developing and retaining skilled and talented employees
Skilled and talented employees are a cornerstone of excellent quality operations. Skilled, experienced and dedicated employees perform at higher levels. They understand the intricacies of producing the desired output at the required high standard. Therefore, organisations must strive to attract, develop, and retain skilled and talented employees. In addition, such employees are also a scarce resource.
- On-going training and development of staff
Organisations must allocate adequate resources to continuously train and develop its staff including the management team. Training and developing staff will significantly improve an organisation’s capabilities, boost its competitive advantage, motivate and retain such staff. Well-trained and developed staff contribute immensely to excellent quality.
- Mentoring and coaching of staff
Mentoring and coaching generate higher levels of performance. Mentoring and coaching change unproductive and negative behaviour in employees and instil behaviours that will enable them to increase productivity and produce timeous and quality work. Mentoring and coaching impart skills and knowledge to employees that will boost their performances. Therefore, organisations must adopt mentoring and coaching as part of its management style. Mentoring and coaching must also become an important policy in order to have the desired effect.
- Use of high standards
The implementation of high standards leads to superior quality outputs. Management must continuously push its standards higher. Examples of high standards include ISO quality standards, checklists compiled internally or externally, standards and frameworks of professional bodies e.g., the Internal Control and Enterprise Risk Management – Integrated Frameworks of the Committee of Sponsoring Organisations of the Treadway Commission (COSO), the International Integrated Reporting Framework of the International Integrated Reporting Council, the Code of Professional Conduct of the SA Institute of Chartered Accountants etc.
- Dynamic business processes
Excellent operational processes and procedures should be designed and built in order to produce high quality products and services. These processes and procedures must be structured, standardised and cost effective. These processes and procedures must also be well documented as documented processes facilitate revision and improvement on a regular basis. Such documentation also assists in the training and development of employees on the operational processes and procedures.
- Benchmarking with successful companies and competitors
Benchmarking enables an organisation to measure itself against excellent and successful external organisations and/or competitors. Any gaps that arise from such benchmarking will enable an organisation to adopt strategies and plans to improve its processes, methodologies, practices and operations to bring itself on par with such external organisations and/or competitors.
- Innovative use of technology
Technology boosts the capabilities of an organisation. Technology enables an organisation to produce goods and services faster, easier, better and cheaper. Technology also enables an organisation to compete effectively in the marketplace.
- Procurement of quality goods and services from suppliers
Suppliers must be an extension of the quality operations of an organisation. Suppliers that supply inferior quality products and services to the organisation create a weak link in the quality value chain. Therefore, an organisation must design and implement effective and efficient supply chain management processes, procedures and policies to enable it to produce quality goods and services.
- Innovation and continuous improvement
There is infinite scope for change and improvement. The management of an organisation must continuously review, improve and change its operations, processes, practices and systems with a view to make it better, faster, easier and cost effective. The management must also create an innovation culture that will boost the generation of new ideas by employees. New ideas may create better and improved operations, new products and services as well as compelling new business models.
- Supervision of operations
The supervision of operational processes and activities enhances production of quality goods and services. Senior staff members and management must supervise the process of producing services and goods at each milestone of the production value chain. Supervision also ensures that there is adherence to production standards, staff are disciplined and there is compliance with the specifications of the designed products and services.
Effective supervision at a higher level of the organisation i.e. board level, level of chairperson, is also crucial to ensure that the organisation follows the correct strategic path and that operations are in line with the chosen operations strategy. High-level supervision also ensures that overall organisational performances are on par with business plans and expectations.
QUALITY OPERATIONS AS A TOOL FOR COMPETITVE ADVANTAGE AND VALUE CREATION
Quality operations can only become a reality if the above practices are enforced and applied consistently. Quality operations will boost the competitive advantage of the organisation and push up market entry barriers.
Organisations that have quality operations will produce quality goods and services. Quality goods and services will create satisfied customers. Satisfied customers will spread the word, which will multiply itself. A well-known and quality product and service will become a trusted brand. A trusted brand will increase its market share. A higher market share translates in increases in revenues, cash flows and profitability. Consequently, value will be created for stakeholders for the organisation.
INFERIOR QUALITY DESTROYS LONG-TERM VALUE
The business that sold me the inferior quality shock absorbers has lost me as a customer, forever. Moreover, if all customers had similar experiences that I had, the business that sold to them the inferior quality goods and services would lose more paying customers and, ultimately market share. In addition, if a business loses a client that brings in a significant share of the revenue, such business will experience financial difficulties and face the risk of bankruptcy.
Finally, every year the Auditor-General of South Africa (AGSA) reports on its findings that the overwhelming majority of the 257 municipalities in South Africa achieved poor audit outcomes and are in financial distress. In addition, significant amounts of irregular expenditure, fruitless and wasteful expenditure and unauthorised expenditure are incurred. These expenditures increase every year and there is no sign that these wastages and non-compliance to laws and regulations will ever end. This financial mismanagement, poor governance and accountability, and use of poorly skilled and experienced staff by the municipalities lead to poor service delivery to the residents which has become endemic in South Africa. The AGSA also described the issue as a deep-seated crisis in local government. However, local government can turnaround the crisis if it designs, implements and consistently enforces quality operational standards.