Imperatives of Quality and Productivity

In modern times, quality, cost and the availability of the product and the service on time have become the basic necessities. Customer needs a quality product/service at a competitive price. Having said that it is obvious that as to what constitutes ‘quality’ is determined by the customer. Gone are the days when the established firms could define the quality of the product and dictate the price. It is not true any more, even in an earlier government controlled economy such as in India.

The world markets are getting more and more accessible and freer despite the efforts of some governments to build barriers to free trade by imposing one or the other conditions to the import of goods and/or services into their country. For instance, during the year 2003-04, the US government decided to bring in legislation trying to put a cap on Business Process Outsourcing to countries such as India. But, in general, the economies of a free market prevail ultimately. It makes a lot of business sense to get a quality service at half the price.

Customer’s requirements from a product/service can be captured in the specifications of the product. The production process can then be made to conform to the specifications. ‘Conformance to specifications’ has been a quality axiom since a long time. Not long ago the conformance to specifications could be within a few percentage points. The defectives rate of a single digit per hundred items was acceptable; a rate of a single digit per thousand items was considered excellent. During the past three decades, particularly since the dominance of Japanese products and the explosion of highly defect sensitive space and computer technologies, the tolerance levels of the customers of the products have come down drastically. Defects, if any, are tolerated at the level of parts per million.

This is one aspect of the change. What are even more complex for a production/operations system to handle have been the frequently changing tastes and preferences of the customers.

The product itself has to keep changing or, at best, keep evolving to suit these customer preferences that are in a constant state of flux and the expectations that are ever on the rise. Product design has, therefore, assumed great importance. The new/modified design of the product has to be made with the facilities that cannot be changed overnight. Therefore, Design for manufacturability consideration is a necessity. A good product design that can be delivered with desired quality and at the desired time with the available facilities and other infrastructure including the production plant and the supply/marketing channels has become a necessary tool for success in a highly competitive market. If a company does not offer new/modified designs to meet the market needs, it is in danger of extinction. Quality is an inescapable part of the ‘design’ of the product or service. It has to be ‘designed in’.

Quality management is too important an aspect to be handed over to just one department – the Quality Control department and forgotten. In the days of yore that might have been the case. But, now quality has to be incorporated at every function that the product interacts with. In today’s parlance, Quality means ‘total customer satisfaction’ and this cannot come about unless the organization’s culture, its values, its processes, its employees, its business associates are all aligned to this quality objective. It has to be a ‘Total Quality Management’ effort. It is needless to mention that a high level of leadership is called for.

Quality has developed several dimensions of ‘service’ since service is the ultimate goal. Product is no more just a physical entity. It is accomplished by several ‘service’ benefits to the customer. Therefore, ‘service quality’ is equally important for the physical products. Moreover, services by themselves constitute a very large proportion of the national and world economies. The need for services is growing rapidly. Service industry/business is as much perhaps a shade more in need of Total Quality management efforts as the manufacturing industry.

Since a customer pays for the products/services, these have to be available to her at the least possible price. Efficiency in terms of costs can never lose its importance. Whether the customer pays or not, an organization or a society has to pay the price. If it is not cost to the apparent customer, it may be cost to the society. Therefore, ‘productivity’ is another fundamental necessity. Usage of resources – material, energy, human intellectual has to be done in a ‘productive’ manner. Productive effort means meticulousness and focused work. Customer being the main object of focus, it is obvious that the efforts for productivity and quality would follow each other. Without quality there cannot be productivity. Without the rigor of productivity, there cannot be quality.

Quality and productivity are the imperatives of production and operations management today. Most organizations, if not all, are trying to offer quality products/services with attention to productivity. These constitute the basic minimum for the survival of any company in the present competitive business world. Therefore, the differentiation between the competing organizations has to come from other aspects that add the ‘value’ to the customer. But then, this additional ‘value’ will be realized only the basics viz. quality and productivity are right.