Abstract
The automotive industry is one of the industries that has been characterized by intense rivalry. Companies invest a lot of resources to come up with innovative solutions that give them an edge over their rivals. Customer satisfaction is the main target for every company since evidence suggest that increased customer satisfaction contributes to enhanced customer loyalty. One of the areas of focus has been quality control. Quality control in the automotive industry has been improving over time. Besides increasing customer satisfaction, quality controls have been employed in the automotive industry to achieve other goals such as cutting costs, meeting compliance, increasing reputation, protecting their image, increasing customer loyalty, and enhancing competitiveness. Automotive companies have refined and utilized quality control measures to their advantage. Available evidence suggests that there are more gains to be realized by continuously focusing on quality. There is also a lot of documented quality improvement and quality control methodologies which companies can adopt. The ultimate objective of managerial goals is to enhance overall organizational performance. Due to the crucial role it plays in the company, quality control is usually integrated with other strategic management goals. Excellent results can be realized in many ways. It could be increased customers, improved customer loyalty, increased profits, reduced wastes, increased efficiency, or even increased market share. Previous studies show that companies which focus on quality attract more customers who in turn become loyal and contribute to company’s profitability. Since quality control has been a key determinant of success in the automotive industry, it has attracted a lot of managerial attention. This essay will begin with an introduction of quality and its benefits to the automotive industry. It will be followed by a literature review. An implication of quality control to the management is also provided after literature review. Finally, a summary of the essay is presented.
Introduction
The automotive industry is characterized by intense competition. As a result of these, rivals in the sector do everything to outdo each other in order to remain very competitive. Companies are always exploring opportunities which help them to sustain long-term performance. One of the core areas where companies have invested in remaining competitive is quality control. Quality has been defined as the ability to deliver a product or a service which meets or even exceeds the satisfaction of the customer. The automotive industry, like many other industries, also focus a lot on delivering products which exceed customers’ expectations. Further, automotive manufacturing is a capital intensive undertaking and companies not only focus on high-quality products but also establish efficient businesses which not only minimize wastes but also increase their productivity. Emphasizing the aspect of quality control has a lot of benefits for the automotive sector. In their pursuit of quality control, the underpinning goals include competitiveness, customer loyalty, reputation, compliance, and costs. The following sections will explore these goals.
Literature Review
Hakes (1995) defined quality as what is achieved when goods are provided in such a way that they meet or exceeds customer requirements. Hake’s definition is consistent with the definition provided by Jain (2006) who defined quality as the degree to which a product or meet customer’s requirements. The other definition advanced by Jain is that quality is the fitness of a product or service to its intended use. According to Jain, quality control (QC) is a collection of efforts needed to not only manage quality but also to maintain assurance of continued provision of high-quality service or product. Jain further pointed out that it is very important to introduce systematically quality control right at the beginning of the production, or even from the stage at which products are designed and followed up until the products are finished and put to use. And since quality control involves the whole system rather than a part of it, it has been referred to as total quality control (TQC).
Golder, Mitra, and Moorman (2012) contend that of all business strategies, quality is one of the most complex and also most important. This is because as customers are in continuous search for quality, organizations compete on the basis of quality, and in the process the markets get transformed by quality. Golder et al. pointed out that quality is a multifaceted concept. Past studies suggest that quality is a key factor which determines delighted customers, organization’s profitability, and economic overall growth of nations. The automotive industry is known for breakthrough innovations in not only leadership and project management but also quality.
In one study carried out by Jahanshahi et al. (2014) on the relationship between customer service, customer satisfaction, product quality, and customer loyalty, their findings showed that the nature of relationships of quality and the other four factors was varied. From their studies, they found out that customers who describe themselves as loyal to a particular brand stated that they had used quality products. The authors then concluded that high-quality products resulted in increased customer loyalty. Further, the researchers also found out that customers who stated that they were highly satisfied were impressed by the quality of the products. In their conclusion, the authors contend that there is a positive relationship between customer satisfaction and customer loyalty in the automotive industry. Their studies were consistent with findings of investigations carried out by Chai, Ding, & Xing (2009) who also found out that the quality of a product plays a key role in customer satisfaction. Further studies by Anderson, Fornell, and Lehmann (1994) showed that there is a positive relationship between customer satisfaction and profitability. Companies that invest a lot in quality improvement excites their customers with quality products. Satisfied customers become loyal to the products. The loyalty translates into greater profits. These studies suggest that there is also a relationship between quality products and profitability. In the context of the automotive industry, the purpose of increased focus on the quality of products is to earn higher returns.
Intense global competition in the automotive industry has forced many companies to rethink their strategies so that they remain competitive. Over time, companies in the automotive sector have been aggressively pursuing efficiency and quality as their tools for maintaining sustained competitive advantage. By improving their performance, companies can increase customer satisfaction and thereby increase their market share by choosing and implementing best practice management tools. This began with the Japanese in the 1960s who pursued a competitive and aggressive ideology of work based on the principles of quality. On the other hand, their American counterparts changed their approach and adopted military standards of quality (Goicoechea and Fenerollera, 2012).
Several tools have been used to control quality including PDCA cycle also known as Deming cycle, Q7: the seven basic tools of quality, M7: the new seven tools, planning techniques, control techniques, and improvement techniques (Goicoechea and Fenerollera, 2012). The Deming or PDCA cycle stands for Plan, Do, Check, and Act. The seven basic tools of quality advanced by Ishikawa include the check sheet, flow charts, cause-and-effect diagram, control charts, histograms, Pareto charts, and scatter charts. These tools had been developed for people who lack competence in statistics. However, the new seven tools were mainly developed for people who are mainly involved in decision-making processes at the management level. They are therefore tools suitable for management and include affinity diagram, relations diagram, tree diagram, matrix data analysis, matrix diagram, process decision diagram chart, and arrow diagram.
It has been pointed out that planning techniques are tools mainly employed to prevent the production of defective parts. The tools are mainly applied to control frequency, manufacturing tools, and manufacturing processes, and also personnel involved in benchmarking, quality function deployment (QFD), capacity studies, the design of experiments (DOE), control plan, and failure mode effect analysis (FMEA). Control techniques include statistical process control (SPC), audits, and definition of indicators. Techniques which have been used for improvement include Total Productive Management (TPM), continuous improvement, Lean Six Sigma, improvement group, Poka Yoke, and 8D tool also known as 8 Disciplines (Goicoechea and Fenerollera, 2012).
Managerial Implications (what are the implications for the industry and why is it important)
The concept of quality control (QC) has a huge implication in the automotive industry. Firms are always exploring ways of increasing their profits, increasing their share in the global market, and also selling huge volumes of their products. Evidence suggest that when customers are satisfied, they develop product loyalty. As a result, companies are always finding ways of increasing customer loyalty. Management, therefore, goes back to integrate quality control into their processes with the objective of improving the quality of their products. To ensure that this is achieved, automotive companies have been found to employ process methodologies that ensure stringent quality control. For example, studies show that the introduction of Total Quality Management (TQM) has played a significant role in the development of best practice management. Management view quality as a key strategic component of organizational performance because it not only helps companies to enhance their competitiveness but also to improve their business performance. Investigations carried out by Hoang, Igel and Laosirihongthong (2006) showed that total quality management enhances organization’s innovativeness. Such findings have influenced leadership and management in organizations, organizational processes, and strategic management. According to Powell (1995), TQM can be implemented by a firm and us it as a competitive advantage. Firms known for their quality tends to attract many loyal customers.
Summary
Organizational excellence has been measured by how much profits company registers. In their attempt to make more profits, companies have focused their attention on what meet or exceed their customers’ requirements. Quality control and TQM processes have been widely employed in the automotive industry to improve quality and in the process deliver products which meet or even exceed customers’ requirements. Over time, customers become loyal to the company’s products. Quality control has therefore been integrated into the strategic management plans of organizations. In their implementation of total quality management, the organization’s management play a key role because they support the program by providing resources needed to achieve the desired level of quality. Further, the organization also use best practice total quality management tools. Firms can use quality as a competitive advantage. If a firm produces the highest quality products relative to their rivals, they gain a competitive advantage since they will be in a position to attract more customers than their rival. Besides using quality to enhance customer satisfaction, organizations have also utilized TQM to minimize wastes and increase the efficiency of production processes. These also help to save the organization a lot of money. Quality controls are therefore one of the core areas of focus in the highly competitive automotive industry.
References
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: Findings from Sweden. The Journal of Marketing, 53-66.
Chai, K. H., Ding, Y., & Xing, Y. (2009). Quality and customer satisfaction spillovers in the mobile phone industry. Service Science, 1(2), 93-106.
Goicoechea, I. & Fenollera, M. (2012). Quality Management in the Automotive Industry. DAAM International Scientific Book, 619-652.
Golder, P. N., Mitra, D., & Moorman, C. (2012). What is quality? An integrative framework of processes and states. Journal of Marketing, 76(4), 1-23.
Hakes, C. (1995).Total Quality Management: Guiding Principles for Application. Philadelphia: ASTM
Jahanshani, A. A., Hajizadeh, G. M. A., Mirdhamadi, S. A., Nawaser, K., & Khaksar, S. M. S. (2011). Study the effects of customer service and product quality on customer satisfaction and loyalty. International Journal of Humanities and Social Science, 1(7), 253-260.
Jain, P.L. (2006). Quality Control and Total Quality Management. New Delhi: McGraw-Hill
Powell, T. C. (1995). Total quality management as competitive advantage: a review and empirical study. Strategic management journal, 16(1), 15-37.
Thai Hoang, D., Igel, B., & Laosirihongthong, T. (2006). The impact of total quality management on innovation: Findings from a developing country. International journal of quality & reliability management, 23(9), 1092-1117.
