Cost of Poor Quality in Manufacturing
At the end of this unit, you are expected to be able to:
• Discuss the relationships between enabling activities and organisational results.
• Relate knowledge to the execution of improvements in critical activities to achieve business excellence.
1. In the manufacturing sector, which of the following is a cost of poor quality in a finished product?
a. Positive word-of-mouth recommendation.
Incorrect. Recommendation is difficult to track in trying to establish how such recommendation lead to a specific sale of product and services.
b. Lower levels of scrap.
Incorrect. Poor quality should lead to higher level of scrap.
c. More claims on warranties. Correct. Claims are directly quantifiable in dollar terms and provision of warranties cost money to the organisation.
d. Higher customer satisfaction.
Incorrect. Customer satisfaction is an intangible that is difficult to quantify in dollar terms.
2. How does The Balanced Scorecard link the strategic level of the management to operation control on the factory floor?
a. Through strategic objectives Incorrect. Strategic objectives are associated with the strategic level instead of operational level.
b. Through goals and targets
Incorrect. Goals and targets can be found at all levels; strategic, tactical and operational levels.
c. Through the cascading process
d. Through divisional scorecard
Incorrect. Divisional scorecard is meant or different division as opposed to different levels of the organisation.
3. Which of the following statement about Six Sigma is not true?
a. Six Sigma methodology defines three core steps: define, measure, analyze.
b. Six Sigma is based on a simple problem solving methodology known as DMAIC.
c. Six Sigma is suited for manufacturing industry as well as services.
d. None of the above.
4. Which of the following statement is not true about the Singapore Quality Award (SQA) in relation to the service industry?
a. The criteria permit goal-based diagnosis. Incorrect. The dimension of approach, deployment and results are assessed to ascertain that an organisation is truly excellent.
b. The criteria focus on business results.
Incorrect. Organisation musts show outstanding results in financial, customer, product, service, productivity, suppler and corporate social responsibility.
c. The criteria are non-prescriptive and adaptive.
Incorrect. The means of achieving excellent results are not prescribed. d. It is less suitable for the service industry as compared to the manufacturing industry.
Correct. This is a misconception; SQA is equally applicable in both the service and manufacturing industry.
5. Which is not true regarding differences between providing goods and services?
a. Services are generally produced and consumed simultaneously, tangible goods are not.
b. Services tend to be more knowledge-based than products.
c. Services tend to have a more inconsistent product definition than goods.
d. Goods tend to have higher customer interaction than services.
6. Which of the following statements about poor service quality is incorrect?
a. Each complaint may hide many unresolved problems. Incorrect. Although complaint may hide unresolved problems, this is not to suggest that it can be a method of detecting poor quality.
b. Among those who complain, they will continue to patronize the service firm when their complaints are handled effectively. Correct. Even though complaints are handled effectively, customer loyalty may be lost.
c. Discovering a substitute service is an important reason for a customer quitting.
d. Satisfied customers tell more people of their experience than dissatisfied ones do.