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iOM3 Diploma > Unit 3 - Quality and Business Management > Flashcards

Unit 3 - Quality and Business Management Flashcards

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1
Q

Why is quality important to stakeholders?

A

Customer: ensures product reliability and performance

End user: receives a product that is fit for purpose

Company: supports profitability, business continuity, and reputation

Workforce: supports job security and satisfaction

Environment: reduces waste, energy use, and emissions

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2
Q

What are the three parameters of quality?

A

Design – how well the product meets customer needs and expectations

Conformance – how well the product matches design standards

Performance – how consistently the product works in use

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3
Q

What tools and terms support quality management?

A

Specifications – provide standards for comparison

Benchmarking – using reference points

Partnerships – working openly with others

SMART objectives – Specific, Measurable, Assignable, Realistic, Time-based

Six Sigma – tools and techniques to improve business processes

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4
Q

What are costs associated with poor quality?

A

External faults (after shipping): replacements, repairs, liability, customer loss

Internal faults (before shipping): waste, rework, employee demotivation

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5
Q

What are costs associated with achieving quality?

A

Preventative actions: training, system development, reliability checks

Evaluation costs: supplier control, lab testing, inspections, surveys

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6
Q

What is the role of quality control?

A

Involves testing (e.g. dimensions, thickness, weight) to assess whether goods are acceptable

Focuses on defect detection

Uses sampling and analysis to predict the quality of an entire batch

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7
Q

What are the 3 rules of quality control?

A

No inspection without recording – all data is valuable

No recording without analysis – useful insights come from analysing the data

No analysis without action – every result should lead to a decision (e.g. withdraw or ship batch)

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8
Q

What is the role of quality assurance?

A

Ensures processes are designed to prevent defects

Built into the process itself (e.g. incoming material checks, storage checks)

Aims to “make right the first time”

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9
Q

What are the six areas of quality assurance?

A

Resource – ensure requirements are understood and achievable

Planning – define logical sequences and checkpoints

Purchase – control materials/services from suppliers

Process – apply controls and conduct checks

Audit – monitor the system and its results

Action – correct faults and stop them from recurring

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10
Q

What is a Quality Management System (QMS)?

A

A formalised system of processes, procedures, and responsibilities that ensures:

Customer satisfaction is continuously improved

Objectives are met

A quality product is consistently delivered

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11
Q

What are the 3 key goals of QMS?

A

Ongoing improvement of customer satisfaction and added value

Responding to customer feedback and complaints

Proving quality through process control data

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12
Q

What are the types of corporate responsibilities in QMS?

A

Philanthropic – Be a good corporate citizen

Ethical – Be ethical in your actions

Legal – Obey the law

Economic – Be profitable

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13
Q

Which QMS systems are commonly used?

A

ISO 9000

BRCGS (Brand Reputation through Compliance Global Standards)

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14
Q

What is ISO 9000?

A

A set of international standards that help businesses develop, maintain, and improve an efficient quality management system.

Applies to any business, not just packaging.

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15
Q

What are the 7 principles of ISO 9000?

A

Customer focus

Leadership

Engagement of people

Process approach

Improvement

Evidence-based decision making

Relationship management

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16
Q

What is the principle of “Customer Focus” in ISO 9000?

A

It means understanding the needs of current and future customers to meet or exceed their expectations.

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17
Q

What does the “Leadership” principle in ISO 9000 involve?

A

Providing clear vision, direction, and purpose for the organisation.

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18
Q

What is meant by “Engagement of People” in ISO 9000?

A

Ensuring that team members are trained, involved, and feel valued and engaged in achieving quality objectives.

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19
Q

What is the “Process Approach” principle in ISO 9000?

A

Using Standard Operating Procedures (SOPs) to ensure consistency, with regular reviews for improvement.

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20
Q

What does the “Improvement” principle in ISO 9000 encourage?

A

Ongoing efforts to enhance capabilities, processes, and overall performance.

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21
Q

What is “Evidence-Based Decision Making” in ISO 9000?

A

Making decisions using reliable, consistent, and regularly collected performance data.

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22
Q

What does “Relationship Management” mean in the context of ISO 9000?

A

Identifying and managing supplier relationships to enhance performance and value creation.

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23
Q

What is the purpose of the BRCGS standard for packaging materials?

A

To ensure manufacturers are hygienic and quality-driven, using a globally recognised benchmark.

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24
Q

How is compliance with the BRCGS standard assessed?

A

By a competent third party (a certification body) through audits of the company’s premises, operational systems, and procedures.

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25
What are the key principles of the BRCGS standard?
Senior management commitment to safety, legality, and quality A risk-based system covering safety, cleaning, pest control, and maintenance Documented QMS and suitable operating conditions aligned with BRCGS requirements
26
What happens after a BRCGS audit visit?
The company has 28 days (or up to 90 days for major issues) to correct any non-conformities identified during the audit.
27
What areas will an auditor typically assess in a BRCGS audit?
Management and organisation, including policies and quality systems Hazard and risk management Procedures (e.g., contract reviews, internal audits, supplier approval) Site standards like buildings, utilities, and safety Product and process control (inspection, testing, calibration) Personnel factors such as hygiene, clothing, and medical screening
28
What are the two hygiene categories in BRCGS?
High hygiene: for materials in direct contact with food or hygiene products Basic hygiene: for materials without direct food contact
29
Can different hygiene categories be mixed?
No. They must either all meet the highest standard or be kept separate in the factory.
30
What is statistical sampling and inspection used for?
To assess products against agreed standards and specifications.
31
What does a certificate of conformity tell you?
That a batch is within tolerance—but it’s not a guarantee of compliance.
32
What is vendor assurance?
The supplier has systems in place to consistently produce in-specification items.
33
What is supplier assurance?
The customer conducts their own quality checks to build confidence in the supplier.
34
What is AQL (Acceptable Quality Limit)?
The minimum quality level that is considered satisfactory and the quantity of products that can be accepted at that standard.
35
What is a critical defect?
One that prevents a pack from functioning or poses a safety risk (e.g. broken glass jar, split film).
36
What is a major defect?
One that affects usability but not safety (e.g. dented can, deformed bottle).
37
What is a minor defect?
One that doesn’t affect usability but impacts appearance (e.g. scratches, bad print, bubbles in glass).
38
What is packaging performance made up of?
Attributes and variables.
39
What are attributes in packaging?
Digital ‘yes or no’ judgements, such as whether a can leaks or doesn’t, or if a bottle has a hole or not.
40
What are variables in packaging?
Analogue characteristics that can be measured, like the weight of a glass bottle or the diameter of a plastic cap.
41
How are variables assessed?
Each variable should have a mean with upper and lower limits (e.g. crush tests only care about a lower limit to ensure it doesn’t crush).
42
What is the role of the International Organisation for Standardisation (ISO)?
Develops global standards Packaging is covered under Technical Committee (TC) 122
43
What does BSI (British Standards Institute) do?
Develops standards Provides testing and training
44
What is DIN (Deutsches Institut für Normung)?
A non-profit association Develops standards to meet market requirements
45
What is ASTM (American Society for Testing and Materials)?
A voluntary organisation Develops standards to high technical quality
46
What does TAPPI (Technical Association of the Pulp and Paper Industry) provide?
Information exchange and networking Test standards for paper and board
47
What is FEFCO (European Federation of Corrugated Board Manufacturers) known for?
Providing training and support for corrugated board
48
What are the four main types of transit hazards?
Mechanical: shock, vibration, puncture, compression Climatic: humidity, temperature, air pressure Environmental: pest, dust, dirt Chemical: contamination or spoilage
49
What is a PERT chart used for?
Planning, scheduling, and coordinating tasks and resources Calculating project completion time Scheduling individual tasks within a larger project
50
What are key terms associated with PERT charts?
Fast tracking: Tasks occur at the same time Predecessor event: A task that occurs immediately before Successor event: A task that occurs immediately after Slack: Time a task can be delayed without delaying the project Critical path activity: A task with no slack Crashing critical path: Shortening a task’s completion time Lag time: Earliest a task can follow another Lead time: Time to complete a task without affecting the next one
51
What is Critical Path Analysis (CPA)?
A method that lists all tasks in a process from start to finish Each task is detailed with the necessary work at each stage
52
What does HACCP stand for?
Hazard and Risk Analysis and Critical Control Points
53
What is the purpose of HACCP?
To prevent defects by carrying out risk analysis at every stage in the process
54
What is the first step in implementing HACCP?
Identify the scope of hazard and risk analysis, then apply control measures to reduce or eliminate those hazards
55
What should be done if a hazard cannot be eliminated?
Control measures should be put in place to reduce it to an acceptable level
56
Why is monitoring important in HACCP?
To ensure the system remains effective
57
What does LCA stand for and what is its purpose?
Life-cycle assessment. It is a tool used to support decision making for sustainable development by evaluating material, energy, and waste flows throughout a product's life.
58
What is the main goal of LCA?
To collect and evaluate quantitative data on the environmental impacts of a product over its life cycle.
59
What are the four components of LCA?
Goal definition Scoping Inventory analysis Impact assessment and interpretation
60
What is meant by 'Define boundaries & scope' in LCA?
It involves deciding how far down the chain the analysis will go, what attributes are being compared, and whether there’s a risk of greenwashing.
61
Why is 'Data availability' important in LCA?
To ensure that material inputs and outputs are quantified accurately and come from reliable sources like manufacturers.
62
What does 'Quantifying environmental impact' involve?
It means translating material flows into environmental categories like global warming potential.
63
What is the purpose of 'Weighting impacts'?
To assess which environmental impacts (e.g. energy use, acidification) matter most and compare their significance.
64
Why is 'Cost' a consideration in LCA?
Accessing scientific databases is expensive, and professionals needed to conduct LCA studies also come at a high cost.
65
What does SPC stand for and what does it involve?
Statistical Process Control. It uses statistics to monitor and control quality in production processes, focusing on measurable outputs that must meet requirements.
66
What are the benefits of SPC?
Helps monitor process behaviour Identifies issues and root causes Aids in finding solutions to maintain and improve quality
67
What are the two types of variation in SPC control charts?
Common cause variation: Always present and inherent to the system (e.g., variation in cereal box weight). Special cause variation: Caused by external or unpredictable factors; shows the process is out of control.
68
What do SPC control charts do?
They display data collected at different measuring points and help visualise variation to determine if a process is statistically stable.
69
What are the three main phases of applying SPC?
Understanding the process and specification limits Eliminating special causes of variation Ongoing monitoring of production
70
What does a stable process indicate in SPC?
It doesn’t trigger detection rules on the control chart and can be used to predict future conformity of the product.
71
What is the purpose of supplier management?
To identify and manage risks from suppliers to protect business continuity It's an essential part of a quality management system It improves supply chain resilience
72
What are the three phases of supplier management?
Identification phase Identify suppliers that pose the biggest risk Assess product type, financial value, dependence level, financial health, track record, and country stability Assessment phase Evaluate potential risks and impact (e.g. what happens if the supplier fails?) Assess likelihood of disruption and monitor early warning signs Mitigation phase Implement strategies to reduce disruption and minimise impact Use diversification, redundancy, and protective contracts
73
What are fixed costs in production?
Costs that do not change with production volume (e.g. machinery, rent, salaries, tooling) Spread across all units produced → more units = lower cost per unit Encourage economies of scale Low production volume = high unit cost, which reduces profitability
74
What are variable costs in production?
Costs that change with production volume (e.g. materials, labour, shipping, energy) Impact unit cost and fluctuate with market prices Companies must either raise prices or absorb reduced margins
75
What is the total cost per product formula?
Total cost = (Fixed cost / Units Produced) + Variable cost per unit
76
What strategy should be used when… … there are high direct costs and low volume? … variable costs are high? … scaling affordably is the goal? … targeting price-sensitive markets?
→ Use low-cost packaging to avoid setup costs → Optimise material efficiency and supply chain → Automate to reduce labour costs → Keep both fixed & variable costs low
77
What is EOQ and what does it stand for?
EOQ = Economic Order Quantity Ideal stock order quantity to minimise total inventory costs Balances ordering costs and holding costs
78
What is the EOQ formula?
Square root of: (2 x annual demand x ordering cost per year) / holding cost per unit per year
79
What is MOQ and why does it matter?
MOQ = Minimum Order Quantity Smallest quantity a supplier will sell If MOQ > EOQ, it can cause overstocking, higher holding costs, cash flow strain, and warehouse issues
80
What costs make up stock holding?
Storage Capital costs Insurance Taxes Depreciation Spoilage → These can account for ~30% of annual inventory value
81
What is included in the total cost of stock?
Purchasing Ordering Holding Stockout costs (lost sales when stock runs out)
82
What factors affect stock holding?
Predictability of demand Lead times Storage space and shelf life Bulk discounts Supplier reliability
83
How can stock holding be reduced?
JIT (Just In Time): order stock only when needed Improved demand forecasting: enables accurate EOQ VMI (Vendor Managed Inventory): supplier manages and replenishes stock for the buyer
84
What are quality costs?
All costs related to ensuring, maintaining, and failing to meet product quality standards.
85
What are the four categories of quality costs?
Prevention costs Appraisal costs Internal failure costs External failure costs
86
What are prevention costs?
Upfront investments to prevent defects (e.g. training, planning) Provide best long-term value by reducing future failures
87
What are appraisal costs?
Costs to inspect and test for defects before delivery Don’t add value to customer but necessary to catch issues
88
What are internal failure costs?
Costs of fixing or rejecting defective items before reaching the customer Less damaging than external failures, but still costly
89
What are external failure costs?
Costs from defects that reach the customer Most expensive and damaging, can hurt brand reputation
90
What is depreciation?
The gradual loss in value of physical assets over time due to use, age, or obsolescence.
91
Which types of assets are affected by depreciation?
Machinery Equipment Vehicles Computers Buildings
92
Why is depreciation important?
It helps spread the cost of assets over their useful life Often tax-deductible
93
What are the common methods of calculating depreciation?
. Straight Line Method Equal depreciation each year Formula: (Cost - Scrap Value) / Useful Life 2. Double Declining Balance Method Higher depreciation in early years Formula: Book Value × Depreciation Rate 3. Units of Production Method Based on actual usage Formula: (Cost - Scrap Value) / Total Units
94
What does ROI measure?
It measures how much profit is gained from an investment.
95
What is ROI useful for?
Machinery Marketing campaigns Training Upgrades
96
What are the benefits of using ROI?
Measures profitability Compares investment options Supports decision-making Tracks performance Justifies spending to management
97
What are the limitations of ROI?
Doesn’t show timeframe Ignores risk involved Doesn’t reflect cash flow impact
98
What is the formula for ROI?
ROI = (Net Profit / Cost) × 100
99
What is budgetary control?
Setting budgets, comparing actual costs, and taking action if off track.
100
Why is budgetary control important?
Ensures spending stays within limits Helps meet financial goals Manages upfront costs, long lead times, and multi-stage spending
101
What are best practices for budgeting?
Agree spending at key stages Helps forecast payment timing Matches cash outflows with income Avoids surprise expenses
102
What are the benefits of good budgeting?
Tracks ROI by stage Prevents scope creep and overspending Improves cash flow management Speeds up decision-making when costs change

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