Contrasts idealised versions of quality assurance systems and quality improvement programs. Notes that only powerful customers such as defence procurement agencies can impose…
Abstract
Contrasts idealised versions of quality assurance systems and quality improvement programs. Notes that only powerful customers such as defence procurement agencies can impose quality assurance systems; also points out that individual customers are weak customers whose only power is the ability to move from one supplier to another. Outlines the conditions under which a customer will be able to impose a quality assurance system on the supplier. These conditions include, for example, that there should be an excess of capable suppliers. Points out that quality improvement programs, on the other hand, are initiated and sustained by the supplier’s own top managers. Considers also the role of such factors as industry regulators.
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This paper is a response to a consultative document by the Personal Investment Authority (PIA), the UK financial services industry regulator. Part 1 of this paper examined if the…
Abstract
This paper is a response to a consultative document by the Personal Investment Authority (PIA), the UK financial services industry regulator. Part 1 of this paper examined if the quality management principles developed in manufacturing during past years could be useful in addressing financial services regulation. The Personal Investment Authority in applying quality assurance currently relies exclusively on the specification of processes (e.g. in its Rule Book) and checking firms’ compliance to these specifications. The paper suggests that it would be more effective and efficient instead to specify “outcome” (covering both the product itself and its appropriateness for the particular customer). A total system is defined, including issue of standard product specifications (a model is given) and a customer‐appropriateness specification, an effective and affordable quality assurance check of compliance based on sampling inspection of outcomes, and a practical system of penalties for non‐compliance.
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This paper is a response to a consultative document by the Personal Investment Authority (PIA), the UK financial services industry regulator. The PIA exists, not because the…
Abstract
This paper is a response to a consultative document by the Personal Investment Authority (PIA), the UK financial services industry regulator. The PIA exists, not because the industry is a monopoly or concerned with health or safety, but because of the unsatisfactory quality it has provided to its customers. The approach of the paper is to examine if the quality management principles developed in manufacturing during past years could be useful in addressing this problem. The paper appears in two parts; the second part proposes a different type of regulatory system.
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Reports that English courts are in disarray because of gross inefficiency and excessive costs. Proposes that, it would be easier to privatize the courts, which could be broken up…
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Reports that English courts are in disarray because of gross inefficiency and excessive costs. Proposes that, it would be easier to privatize the courts, which could be broken up into small, fully competitive units, than the already privatized capital‐intensive utilities. Illustrates how this could be done for the civil courts, resulting in major cost savings. The nationalized courts do not include any formal quality assurance system and publish no quality statistics to the public as do the education, health, water industries, etc. An effective, cost‐efficient quality assurance system would be essential for privatized courts. Details one way in which this could be achieved and the quality data it would produce.
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Bradley T. Gale and Robert D. Buzzell
Most managers equate “quality” just with conformance to technical standards. The more powerful strategic weapon is market perceived quality. Here's how to measure it and why it's…
Discusses the methods used in the NHS to bring demand into balance with supply. People with minor illnesses try self‐treatments and alternative medicine. Systematic programs to…
Abstract
Discusses the methods used in the NHS to bring demand into balance with supply. People with minor illnesses try self‐treatments and alternative medicine. Systematic programs to identify ill people are applied to only a few illnesses. Waiting lists for elective surgery cause some richer people to take their demand to private hospitals. An analysis of such waiting lists shows that, other than this, queues are not a method of rationing but are just the effect of bad management of the actual methods, which are then discussed. The same methods are used to ration access to specialist physicians. Providing extra resources would eliminate queues only if another condition was satisfied. It is argued that providing fully adequate medical care for patients of working age, although expensive, might produce a net economic gain, whereas all care for pensioners, including medical care, gives a net economic loss. Therefore it may not be sensible for people to have inadequate medical care for the first 65 years of their lives just because it is economically impracticable for them to have fully adequate medical care when they are pensioners.
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Russell D. Johnson and Brian H. Kleiner
The conventional wisdom of managers in the US dictates that improving product quality will increase the cost of making the product which will either increase the price or reduce…
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The conventional wisdom of managers in the US dictates that improving product quality will increase the cost of making the product which will either increase the price or reduce the profits. Shows that improving the quality of a product or service will not necessarily increase its manufacturing cost. Obtains information on fundamental theories and case histories from business literature and uses evidence to support the hypothesis from the case histories of several US companies which have achieved higher quality with lower quality costs and improved profitability. Examples from the literature include the case histories of companies such as Florida Power & Light, Globe Metallurgical, Motorola, and Westinghouse Commercial Nuclear Fuel Division. These examples indicate increases in return on assets, improved customer satisfaction, increased market share, and increased revenues and profits. Suggests that a company which can achieve successfully both higher quality and lower cost will have improved productivity, lower manufacturing costs, better quality, greater customer satisfaction, a higher market share and greater profitability.
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James O′Hara and Carol Ann Frodey
Suggests that, in many cases, where formerly excellentmanufacturing companies have suffered a decline in their fortunes, theyfailed because they did not change with their…
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Suggests that, in many cases, where formerly excellent manufacturing companies have suffered a decline in their fortunes, they failed because they did not change with their customers; their operations were too remote. Considers how this might be avoided by applying a service quality model to manufacturing. Examines the differences between service and manufacturing operations and highlights the difficulties which manufacturing companies have in being close to their customers. Provides definitions of quality for products and services before presenting the model. Describes the features of the model – taking a total view, achieving a balance between expectations and delivery, system design and response to change‐as they apply both to service and manufacturing. Highlights the need to exceed expectations to maintain a competitive edge. Argues that, whilst this is achieved through committed staff in service industries, this same commitment can, with appropriate communication, be achieved in manufacturing companies.
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A three‐year study, partly funded by the Quality, Design and Education Division of the Department of Trade and Industry, has been carried out on the general subject of quality…
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A three‐year study, partly funded by the Quality, Design and Education Division of the Department of Trade and Industry, has been carried out on the general subject of quality improvement. As part of this work a literature survey of the English language papers was conducted on such issues as the effects of international competition, the nature of quality management, organisations and change, leadership, how companies set about quality improvement and supplier development. In order to examine topics pertinent to the research subject, the search covered not only the general literature on quality management but also the literature on corporate strategy, marketing, organisational psychology and operations management. The main findings from the literature search are presented and guidance is provided on some authoritative reading on quality improvement.
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Paul Rayner and Leslie J. Porter
The costs, benefits and implications of BS5750/ISO9000 certification for small and medium‐sized firms are investigated on the basis of a review of published literature and a…
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The costs, benefits and implications of BS5750/ISO9000 certification for small and medium‐sized firms are investigated on the basis of a review of published literature and a survey of the actual experience of a representative sample of firms. The principle motivation for installing BS5750‐based quality systems appears to be customer pressure; retaining existing customers is a key benefit. A minority of firms discover that “internal” benefits, such as greater control and discipline, turn out to be more valuable. Developing and installing a BS5750‐based system is a major exercise for small firms but through reductions in quality costs, the costs of certification can typically be recovered within three years of commencing to operate the system. The attitude of the chief executive is a key determinant of effectiveness.