Quality Assurance and Statistical Process

Quality Assurance and Statistical Process Control

Quality Assurance

The factors determined by the globalized business environment and customers' needs have determined companies to focus on increasing the quality levels of their products and services in order to improve their competitive advantage. This requires that these companies refer to certain standards in this field. The International Organization for Standardization deals with developing international quality standards regarding most fields of activity. Companies and individuals that intend to address these activities must meet the ISO requirements and must improve the quality of their activity in accordance with developments made by this organization.

The following pages focus on analyzing the quality levels at Costco Warehouse and the processes used by the company in order to ensure the quality of its products and services. As a large retailer, Costco addresses numerous customers and has a great influence on the market. This is reflected in the high quality standards that the company must meet.

In order to ensure high quality standards, Costco must take into consideration the principles of total quality management. Different specialists in the field have identified several principles regarding TQM that companies must include in their strategy. These principles vary in accordance with the size, activity, and objectives of the company.

In the case of Costco, the TQM principles that must be addressed by the company's strategy are represented by efficient leadership, involvement of all the stakeholders of the company in ensuring high quality standards, customer focus, organizational culture, continuous improvement, and training of employees. In order to build sustainable quality processes, it is required that Costco has leaders with suitable skills that are able to influence the behavior of employees towards ensuring quality. The involvement of stakeholders is quite important in retailing. In this case, the stakeholders that must be involved in the quality assurance process refer to managers, owners, employees, customers, suppliers, and the community.

In addition to this, the fact that Costco works directly with customers determines the company to continuously rely on customer satisfaction. Organizational culture is another factor that significantly influences the efficiency and productivity of Costco. This is because the work environment is likely to determine the motivational strategy and the performance of employees. Ensuring high quality standards within the company's processes requires the continuous improvement of these processes and activities. The company must also invest in training its employees, in order to help them improve their skills.

However, it is important to monitor quality within the company. The most important statistical tools used in monitoring and improving quality are represented by control charts. In the case of Costco, these charts can be used for calculating attributes, or discrete data, or to calculate variables, which are considered continuous data. The objective of these control charts refers to identifying the causes of variation within quality processes (SQC Online, 2010).

In other words, control charts are used in monitoring the parameters of the process by different measurement functions. In order to use control charts on Costco's manufacturing process, it is required to determine the process parameter that must be monitored. In accordance with the targeted value of the parameter in case, the centerline of the plot must be determined. Several measurement groups must also be created. The control limits are established based on certain formulas.

Some of the most important strengths of Costco are represented by the company's focus on customer satisfaction and by its intention of continuously focusing on improving quality. However, there are certain aspects regarding quality that the company can improve. The objective of Costco is to improve quality of products and services while reducing their price. This is a difficult objective to reach, given the fact that high quality is usually attributed to higher prices.

Therefore, Costco understands that it must work on technological aspects in order to improve the quality of its process and maintaining its cost effectiveness. In other words, the company invests in technological developments that allow Costco to continuously improve the company's efficiency and productivity. These technological developments are also intended to improve the work conditions of employees, which leads to improved performance. In addition to this, technological developments reduce the risks and errors within the company's processes (Daft & Marcic, 2008).

Another aspect of great importance to the company that requires quality improvement is represented by Costco's supply chain management. The retailing activity requires efficient supply chain strategies. The company must determine the most suitable inventory levels in accordance with its activity and customers' requirements.

There are several strategies that can be applied in order to increase the efficiency of the company's supply chain. Costco's efforts regarding its supply chain improvement should be directed towards its inventory levels. This means that the success of such strategies depends on inventory management.

The competition in this business sector is intense, and Costco must develop flexible strategies that allow the company to sustain its competitive advantage. Therefore, Costco must compare its activity to that of its competitors in order to establish its performance on the market. In this case, companies use the benchmarking process. Benchmarking is represented by continuously measuring the company's products and services against those of competitors. Costco's practices, processes, and activities are also analyzed by using the benchmarking method.

In order to obtain suitable results, it is recommended to analyze competitors of similar size, with good position on the market, and that address similar market segments. Based on these comparisons and their results, Costco can identify the areas that require improvements (Encyclopedia of Business, 2011). There are several types of benchmarking that must be used in accordance with each situation. In the case of Costco, it is recommended that the company addresses competitive benchmarking. This is because this method allows Costco to analyze the market share, customer levels, customer satisfaction, and others. This information can be used in developing and implementing strategies intended to increase the company's market share.