Quality (business)

In business, engineering, and manufacturing, quality – or high quality – has a pragmatic interpretation as the non-inferiority or superiority of something (goods or services); it is also defined as being suitable for the intended purpose (fitness for purpose) while satisfying customer expectations. Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable. In such ways, the subjectivity of quality is rendered objective via operational definitions and measured with metrics such as proxy measures.

In a general manner, quality in business consists of "producing a good or service that conforms [to the specification of the client] the first time, in the right quantity, and at the right time". The product or service should not be lower or higher than the specification (under or overquality). Overquality leads to unnecessary additional production costs.

There are many aspects of quality in a business context, though primary is the idea the business produces something, whether it be a physical good or a particular service. These goods and/or services and how they are produced involve many types of processes, procedures, equipment, personnel, and investments, which all fall under the quality umbrella. Key aspects of quality and how it's diffused throughout the business are rooted in the concept of quality management:

While quality management and its tenets are relatively recent phenomena, the idea of quality in business is not new. In the early 1900s, pioneers such as Frederick Winslow Taylor and Henry Ford recognized the limitations of the methods being used in mass production at the time and the subsequent varying quality of output, implementing quality control, inspection, and standardization procedures in their work. Later in the twentieth century, the likes of William Edwards Deming and Joseph M. Juran helped take quality to new heights, initially in Japan and later (in the late '70s and early '80s) globally.

Customers recognize that quality is an important attribute in products and services, and suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (the quality gap). In the past two decades this quality gap has been gradually decreasing between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacturing to countries like China and India, as well internationalization of trade and competition. These countries, among many others, have raised their own standards of quality in order to meet international standards and customer demands. The ISO 9000 series of standards are probably the best known international standards for quality management, though specialized standards such as ISO 15189 (for medical laboratories) and ISO 14001 (for environmental management) also exist.

The business meanings of quality have developed over time. Various interpretations are given below:

Traditionally, quality acts as one of five operations/project performance objectives dictated by operations management policy. Operations management, by definition, focuses on the most effective and efficient ways for creating and delivering a good or service that satisfies customer needs and expectations. As such, its ties to quality are apparent. The five performance objectives which give business a way to measure their operational performance are:

Based on an earlier model called the sand cone model, these objectives support each other, with quality at the base. By extension, quality increases dependability, reduces cost, and increases customer satisfaction.