IB Business Quality Management

When Two Bolts Cost Boeing $20 Billion: Quality Control vs Quality Assurance

Let's go back to January 2024 for a second. An Alaska Airlines Boeing 737 MAX 9 is cruising at 16,000 feet above Oregon when suddenly - BANG - an entire door plug blows off the side of the aircraft. Phones, headrests, and one kid's shirt get sucked out into the sky. Passengers are screaming, oxygen masks drop, and the pilots hoping for the best as they emergency-land the plane.

The investigation outcome? Two bolts. Two measly bolts that should have been there but weren't. Boeing's quality inspectors had missed them. The Federal Aviation Administration grounded 171 aircrafts. Boeing's share price plummeted. Lawsuits flooded in. Estimated cost? Over $20 billion and still counting.

Now let's compare that situation with Toyota. Same industry (sort of - cars not planes), but completely different story. Toyota's quality reputation is so top that their 20-year-old Corollas sell for insane prices because people worldwide know they'll run forever. Consumer Reports ranks them number one for reliability year after year. Their secret? They don't just check quality at the end - they build it into every single step of production.

Today we are dealing with the critical difference between quality control and quality assurance - and why understanding this distinction might literally save lives (and billions of pounds).

Quality Control: The "Check It at the End" System

Right, let's start with how most businesses used to do things in the past (and many still do): quality control (QC).

Quality control is the traditional approach of using quality controllers to check the quality of output. It's like having a bouncer at the end of the production line who eyeballs every product and decides whether it's good enough to go out or needs chucking in the bin.

QC actually involves:

Features of quality control:

• Quality control is mainly about inspecting and detecting substandard output (defects) rather than preventing it

• Quality controllers (not the workers making the product) randomly or systematically do the inspecting or checking

• It strives to ensure products meet the quality standards set by the organisation

• Firms set an acceptable level of wastage or defects (reject rate) - basically saying "yeah, we know some products will be useless, that's fine"

• QC is product orientated rather than process orientated (they care about the final product, not how it's made)

• QC is reactive rather than proactive, with quality checks done retrospectively (after the product's already been made)

IB Business Management Real-life Example: Primark is a classic QC business. They manufacture millions of cheap t-shirts, jeans, and hoodies. At various points in production, quality controllers randomly inspect batches. Find a strange looking seam or wonky print? Throw that batch away. The acceptable reject rate might be 2-3%, which sounds small until you realise that's thousands of products binned. But for Primark's business model (fast fashion, rock-bottom prices), that's acceptable wastage.

The problem? QC is fundamentally wasteful. You've already spent money and resources making the defective product. You've already used the fabric, paid the workers, run the machines. Then you bin it. At this day and age and with the technology we enjoy it doesn't make sense, really.

Quality Assurance: Will You Get It Right The First Time?

Quality assurance (QA) is an approach to quality management that involves the prevention of mistakes in the production process, such as defective output, poor customer service, or delays in distributing goods to customers. It involves agreeing to and meeting quality standards at all stages of production to ensure customer satisfaction.

Features of quality assurance:

• QA uses workers, rather than inspectors, to check the quality of output (the people making the products are responsible for quality)

• All staff are responsible for quality, so QA can be considered a form of job enrichment

• Firms have various codes of practice that notify customers of quality procedures and specifications

• QA strives to achieve greater efficiency and less wastage

• The aim is zero defects - the reject rate is literally zero (no acceptable level of rubbish)

• QA is process orientated rather than product orientated (get the process right, products will be right)

• QA is proactive rather than reactive (prevent problems before they happen)

IB Business Management Real-life Example: Apple is absolutely obsessed with QA. Every single iPhone goes through over 200 different quality checks during production, not after. Workers on the assembly line are empowered to stop production if they spot potential issues. The aim? Zero defects leaving the factory. When that iPhone X debacle happened in 2017 (facial recognition failures), Apple didn't just throw away the faulty phones - they traced back through the entire production process to find where the prevention failed and fixed it at source.

See the fundamental difference? QC says "make loads of products, check them, bin the rubbish ones." QA says "build quality into every step so nothing rubbish gets made in the first place."

Methods of Managing Quality: How Businesses Actually Do This

Quality Circles: When Workers Become Quality Detectives

Back in the 1950s, this American bloke called Professor W. Edwards Deming turned up in Japan and told manufacturers something extraordinary at the time: American management had given managers about 85% of the responsibility for quality control, with only 15% to employees. He reckoned this should be reversed.

The Japanese absolutely bought this idea and developed quality circles.

A quality circle is a small group of employees who voluntarily meet regularly to identify, examine, and solve problems related to their work, in order to improve the quality of output.

Here's how they work:

• The emphasis is on preventing defects from arising in the first place, rather than quality control during post-production checks

• Employees working in similar job roles are encouraged to investigate and suggest practices to improve quality

• For quality circles to work, members must receive appropriate training in problem-solving

• Senior management must be supportive and fund these teams appropriately, even when requests seem trivial or budgets are limited

• Kaizen (remember continuous improvement from our lean production entry?) usually involves the implementation of quality circles

IB Business Management Real-life Examples: Toyota pioneered quality circles. Groups of 5-10 assembly line workers meet weekly to discuss quality issues. Spot a recurring paint defect? The circle investigates why it happens, proposes solutions, tests fixes. Management funds their suggestions. Result? Toyota's legendary reliability reputation.

Honda UK in Swindon runs hundreds of quality circles. One circle noticed that windscreen wipers were occasionally fitted incorrectly. Instead of waiting for quality inspectors to catch it (QC approach), the circle redesigned the fitting process so it was physically impossible to install wipers wrong. Problem solved permanently.

Quality circles also bring limitations for employees, for instance senior management have a clear target for blame if there are quality issues or problems. If your quality circle was supposed to prevent defects and defects happen? Guess who's getting the blame and probably looking for a new job.

Benchmarking: Comparing Yourself to the Competition (and Yourself)

Benchmarking is the systematic process of comparing a business or its products to its competitors, using a set of standards (called 'benchmarks'), such as sales revenue, profits, labour turnover, or brand loyalty.

Think of benchmarking like checking your exam marks against your mates'. If everyone else got A's and you got a C, you know you need to improve your game. If you got an A and everyone else got C's, you're on your way to meeting your goals.

Benchmarking involves making internal and external comparisons of predetermined criteria (industry standards), with the aim of meeting or exceeding the benchmarks.

Internal benchmarking involves comparing business practices within the same organisation. Best practice is then spread throughout the organisation.

IB Business Management Real-life Example: if Tesco's store in Reading has half the wastage of the store in Bristol, they'll investigate what Reading's doing differently and roll it out to Bristol.

External benchmarking involves comparing business practices outside the organisation with other firms considered to be the best in the industry. This approach can take up significant time and resources to collect, collate, and interpret the data and information.

IB Business Management Real-life Example: Starbucks is permanently pursuing external benchmarking. They constantly compare their customer satisfaction scores, average transaction times, and drink consistency against competitors like Costa and Caffè Nero. They'll even send "mystery shoppers" to rival coffee shops to benchmark the competition's service quality and product offerings.

The ultimate aim of benchmarking is to improve performance. This helps a business maintain or develop its competitiveness. As a strategic management tool, it enables managers to compare the firm's performance, its processes, and its products with the best of other companies within the same industry.

Key features of benchmarking:

• Usually conducted at regular intervals (e.g., profits per quarter or market share per year)

• Benchmarks are typically quantifiable (e.g., star ratings for the hotel industry)

• Should be made as objectively as possible, though there's scope for subjective comparisons via customer perceptions and feedback

• Importantly, it includes examining the competition from the point of view of customers

IB Business Management Real-life Example: Nando's benchmarks everything from chicken cooking times to customer wait times to cleanliness scores. They compare stores against each other (internal) and against competitors like KFC and Wagamama (external). Each restaurant gets a monthly "benchmark report card." Top performers get recognised; struggling stores get support to meet the benchmarks.

Total Quality Management (TQM): The Ultimate Quality Philosophy

Right, this is where everything comes together. Total Quality Management (TQM) is basically quality assurance on a big scale - it's a quality management approach that aims to involve every employee in the quality assurance process.

TQM involves organisation-wide approaches to quality improvements in products, process, people, and philosophy (organisational culture).

TQM is a philosophy about embedding awareness of quality in all organisational processes - it forms a culture of quality by empowering all workers within the organisation to take responsibility for quality issues.

An essential feature of TQM is zero defects, meaning lean production that is efficient and without any wastage.

TQM as a form of lean production commits the organisation to continuous improvement (kaizen) and benchmarking of all operations relating to product quality. Quality circles can also be a feature of TQM.

TQM is like the "Godfather" of quality management - it brings together kaizen, benchmarking, quality circles, zero defects, all of it, into one comprehensive approach.

IB Business Management Real-life Example: The Body Shop (Yes, the company is down but not dead yet!) built their entire business on TQM principles. Every employee - from shop floor to boardroom - is responsible for quality. They continuously improve (kaizen) their ethical sourcing processes, benchmark against competitors on sustainability metrics, run quality circles to solve problems, and aim for zero defects in both products and customer service. Their "Forever Against Animal Testing" commitment? That's TQM thinking - quality isn't just about the moisturiser working, it's about the entire process being ethically sound.

Advantages of TQM:

• Motivational impact on employees who feel more involved in decision-making (you're not just making widgets, you're responsible for quality, you are part of it)

• Competitive advantages as it puts customers' needs at the centre of the production process

• Cost-effectiveness as TQM eliminates the need for inspections and the costs of reworking mistakes and defective output

• In the long term, quality is higher while costs should be reduced

• Brand reputation from emphasis on high quality and consistency

IB Business Management Real-life Example: John Lewis Partnership is a TQM dream. Their "Never Knowingly Undersold" promise and legendary customer service reputation come from every single partner (employee) being responsible for quality. Returns? Hassle-free. Product knowledge? Exceptional. Why? Because quality isn't the job of inspectors - it's everyone's job.

Disadvantages of TQM:

• Requires a change in attitudes and commitment from all staff, which can be difficult to achieve (not everyone wants responsibility for quality)

• Staff training costs, including management training and development, can be high, yet must be properly funded

• Not all workers are motivated by or suitable for job enrichment and empowerment (some people genuinely prefer being told what to do, not everyone is or wants to be a leader)

• Accreditation fees paid to awarding bodies such as the International Organisation for Standardization (ISO) can be expensive

IB Business Management Exam Tip: Students often write that TQM systems remove complaints about quality. While TQM strives for zero defects, it does not and cannot guarantee that output will be faultless or perfect for that matter. For example, toy manufacturer Mattel uses a TQM philosophy but has had to recall faulty products in the market. Remember those lead paint scandals with Barbie dolls in 2007? That was Mattel. TQM doesn't make you perfect - it just dramatically reduces defects.

The Impact of Lean Production and TQM on Organisations

Right, so why do businesses actually find al this relevant? What's the point of quality circles, benchmarking, TQM, and all that jazz?

The objective of lean production and TQM is to improve the quality of a firm's goods and services. Quality is a key source of global competitiveness.

A quality product needs to be fit for purpose - the product fulfilling its intended purpose and function. For example, a pen should enable the user to write with it. Sounds obvious, but you'd be shocked how many products fail this basic test. Anyone remember the Samsung Galaxy Note 7 that kept exploding in people's pockets? Definitely not fit for purpose.

Quality is important for an organisation for several reasons:

1. Satisfying the needs and wants of customers (if your product's rubbish, customers won't buy it twice)

2. Raising consumer confidence regarding a business and its products (a reputation for quality is marketing gold)

3. Improving the motivation of employees (people want to work for companies they're proud of)

4. Gaining a competitive advantage over rivals (quality differentiates you in crowded markets)

5. Lowering production costs, hence higher profitability (zero defects = zero waste = lower costs)

Poor quality output will result in higher costs for the business due to customers seeking compensation for substandard products. Examples of poor quality include:

• The product breaking down unexpectedly

• The product being delivered late

• A lack of instructions or directions for use

IB Business Management Real-life Example: Volkswagen learned this the brutal way with their 2015 emissions scandal. They'd deliberately programmed diesel engines to cheat emissions tests - massive quality failure in their production process. The cost? €30 billion in fines, recalls, and legal settlements. Plus their reputation for German engineering quality gone down the drain. Their US sales dropped 25% in one year.

Ultimately, lean production and a culture of TQM give an organisation competitive advantage over its rivals. Attracting customers and retaining their loyalty becomes easier as consumers trust reputable businesses and their brands.

IB Business Management Real-life Example: Dyson is the perfect example. Their TQM approach - obsessively testing every vacuum cleaner, continuous improvement of designs, zero tolerance for defects - means customers pay £300+ for a Dyson when they could get a similar vacuum for £50. Why? Because Dyson's quality reputation means people trust it'll last 10+ years. That's competitive advantage in action.

National and International Quality Standards: The Gold Star of Business

Right, let's wrap this up with quality standards.

National and international quality standards are a form of benchmark. A good or service must meet a set of predetermined criteria of quality in order to be awarded certification of quality standards that may be recognised within the country or throughout the world.

The big one you see everywhere? ISO 9000.

ISO 9000 is the international quality standard awarded to organisations that ensure their goods and services consistently achieve quality standards to meet the needs of customers.

It's an internationally recognised quality accolade, awarded by the International Organisation for Standardisation (ISO) - a global network of 168 national standards bodies.

To be certified for ISO 9000, organisations must ensure there is evidence that quality is consistently improved. It's not a one-and-done thing. The ISO sends inspectors regularly to verify you're maintaining standards.

IB Business Management Real-life Example: Jaguar Land Rover has ISO 9000 certification for all their UK manufacturing plants. Why does it matter? Because when a wealthy customer in Dubai or Shanghai is dropping £80,000 on a Range Rover, that ISO certification signals "this company has internationally recognised quality systems." It's a trust badge.

Advantages of meeting quality standards:

• Quality standards can provide major marketing advantages (you can literally put the ISO logo on your website and products)

• They can help to differentiate the organisation from rivals, thus minimising potential competition

• They provide opportunities to build brand loyalty and charge higher prices (premium positioning)

• Motivational impacts on workers who feel proud working for a business recognised for its quality

IB Business Management Real-life Example: Pret A Manger doesn't have ISO 9000, so what is the alternative? they have rigorous internal quality standards that are independently audited. Every shop gets weekly mystery shopper visits scoring them on 80+ quality criteria. High scores = bonuses for the team. Low scores = retraining and support. This creates a culture where quality actually matters to frontline workers.

Costs of meeting quality standards:

• Operational costs of meeting national or international quality standards can be very high (e.g., funding staff training or buying necessary technology)

• Inspection costs must be paid to outside agencies such as the ISO (annual certification fees can be £5,000-£50,000 depending on company size)

• Ongoing costs of obtaining certification, licenses, or awards (it's not one payment - it's recurring similar to a subscription model)

• Some customers may be put off by the higher prices (ISO certification costs money, which gets passed to customers)

IB Business Management Real-life Example: Greggs do things their own way. They could get ISO 9000 certification - their quality systems are robust enough. But they've calculated that their customers (people wanting a cheap sausage roll) don't care about ISO badges. So they've invested in internal quality standards instead, saving the certification costs and keeping prices lower. Smart business decision based on understanding their market.

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IB Business Management Exam Gold

Here's what your IB Business Management examiners want you to understand: quality management is about trade-offs.

Yes, TQM and quality assurance are theoretically superior to quality control. Yes, ISO 9000 certification signals quality to customers. Yes, quality circles empower workers and improve products.

But it's not that simple:

• TQM requires massive cultural change that can take years to embed (Boeing's quality failures suggest their TQM culture isn't as strong as they claim)

• Quality standards cost serious money to achieve and maintain

• Not all industries need the same level of quality (Primark's acceptable reject rate works for their business model)

• Workers aren't always motivated by empowerment (some genuinely prefer being told what to do rather than taking responsibility)

The key is understanding context. A company making budget airlines doesn't need the same quality standards as a company making aircraft engines. But when Boeing started treating aircraft production with the same "acceptable defects" mindset as budget products? Disaster happened.

Quality management - whether it's the reactive approach of QC, the proactive philosophy of QA, the democratic empowerment of quality circles, the competitive focus of benchmarking, the holistic culture of TQM, or the international credibility of ISO 9000 - is fundamentally about preventing costly mistakes before they happen.

Because as Boeing discovered with those two missing bolts, the real cost of poor quality isn't the defective product. It's the destroyed reputation, the lost customers, the legal battles, and the billions in damages.

Get quality right, and customers will pay premium prices, recommend you to friends and family, and stay loyal for decades (Toyota, Dyson, Apple). Get it wrong, and you're facing recalls, lawsuits, and corporate disaster (Boeing, Volkswagen, Samsung Note 7).

That's quality management. May not be glamorous or exciting, but absolutely fundamental to business success.

Stay well,