Examples of How the Lack of Quality Management Systems May Affect Companies
Quality management systems have become essential in modern business management. Customers expect consistency in product and service delivery. Any deviation from their expectations can lead to dissatisfaction, complaints and, eventually, loss of income. Even smaller businesses must ensure that they have quality management systems in place. This also pertains to customer service. Take for example, a restaurant. Though the restaurant’s social media pages indicate that, overall, the customers are satisfied with the service level, deviation by one service attendant can cause a negative chain reaction. Consider the scenario below to get an understanding of why having a quality management system in place is important:
A group of young people reserve four big tables at Restaurant X. The waiter serving them is rude and an argument ensues. The waiter accuses a pregnant customer of bringing alcohol onto the premises when the pregnant customer only ordered non-alcoholic beverages the entire evening. Upset by the waiter’s accusations and rudeness, the pregnant customer tells the rest of the group. Even though there are cameras installed at the restaurant, the management team fails to view the footage to determine what transpired and assumes the waiter is right. Instead of apologising for the waiter’s accusations, they warn the group and tell them that they can stay, but they shouldn’t be rude and may not consume alcohol not bought at the restaurant, ignoring the fact that the waiter insulted the customer.
The group leaves shortly after because of the incident. The next day a flame war erupts on the restaurant’s social media page and within 48 hours, the restaurant’s good standing in the community drops to a rating of 2 from 5. Instead of diffusing the situation, the management team keeps on insulting the pregnant customer on their social media page in response to her public venting on the page about the incident. Pretty soon, other customers who were also at the restaurant when the incident occurred complain about the lack of service and poor quality of the food. This leads to more accusations and the restaurant loses a large part of their customer base.
The above example shows how easy it is for a business to lose customers, income, public standing, and credibility through just one incident. Had there been proper quality control in place regarding how to address customers, what level of service to give, how to resolve issues, and what quality of food and service to provide, the incident may never have happened. Had the management team approached the situation according to a set of rules and procedures to deal with such situations, the restaurant, even though the waiter was wrong, would have been able to pacify the customer and portray a professional image.
In another scenario, a customer orders a product with the expectation that it will work as stated. However, due to the manufacturer’s lack of quality control, the product is faulty. The customer returns it and demands a refund. The customer buys from a competitor instead and tells his friends about the poor quality from the original manufacturer. Based on what he says, his friends all decide to only buy from the competitor. The company loses customers, integrity, and income. At the same time, the manufacturer loses money, because of wastage. Every returned product means loss of income. The product must be repaired or replaced. Lack of quality management thus costs the company money.
Now we get to international trading. Suppose a company in South Africa orders a large quantity of inflatable toys from a supplier in another country. The products arrive three weeks later and the South African company distributes the products without quality checks. The products end up on retailer shelves, but every seventh item sold is returned because of a flaw. The South African company refunds the retailers who refund their customers.
The retailers are upset, customers don’t want to buy from them again, and the South African company loses a great deal of money, and their good standing as supplier. They had reason to expect consistent quality, but though the overseas supplier does have a quality management system in place, lack of documentation leads to inconsistencies in reporting returned products and because the company also fails to perform quality audits on its supplier, it ends up bearing the brunt of the angry retailers.
What it boils down to is that companies cannot afford to operate without quality management systems in place. It also means that the quality management systems must be implemented throughout the entire organisation. Constant improvements must be made and documentation must be in place to ensure consistency. It also becomes apparent that one company’s idea of a quality management system can differ from another company’s. With standardisation of quality management systems, it is possible to have the assurance that an overseas supplier will apply specific quality controls in the manufacturing and delivering of their products. This is where the International Standards Organisation becomes important. With the setting of ISO standards, it is possible to create benchmarks against which companies’ quality management systems can be measured. Guidelines for implementation of the benchmarks’ standards can be followed and independent audits can be performed to ensure conformance with the requirements of the QMS standard.
The ISO 9000 family of standards is relevant to the setting up, implementation, and management of quality management systems. Though compliance and certification according to ISO 9001 are not compulsory, the worldwide need for consistency in quality has led to many thousands of companies supporting the standard. As such, compliance with the standard helps to give credibility with trading partners. Business partners and customers know that the company has a quality management system in place according to requirements of an internationally recognised standard.
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