One of the driving factors for this trend is the "impact of competition" (Burrill and Ledolter, 1999, pg. 523). The second major factor is the ISO 9000 system of standards. These standards provide a baseline by which processes and organizations are checked. The organizations strive to achieve certification as a stamp of approval. The final factor is quality awards. Companies compete to earn the highly visible quality awards. Not only do these awards make a statement about the organization, but these needs will have leverage in marketing campaigns (Burrill and Ledolter, 1999, pg. 523).
The major factors that help define the value of quality have been presented. The next phase is to tie these factors to customer satisfaction. Greater levels of competition provide a catalyst to force companies to keep improving products or services. Consumers can generally choose from one of many companies to meet needs. One way for a company to keep customers is to provide a much greater level of satisfaction. The manufacturing industry will be used to illustrate this example.
Automotive manufacturing is a $484 billion industry (Yahoo! Finance, 2007). Quality plays a major role in the success of this business. According to industry data Toyota is currently at the top of the market capitalization with $228.3 billion. Toyota takes both employee's and customer seriously when it comes to satisfaction. Toyota vehicles are in the top five in both the Midsize Car Initial Quality and Midsize Car Reliability awards from JD Power (JD Power, 2007). These examples of quality awards and the financial standing in the industry provide evidence of Toyota's value of quality being important.
Consumer trends show the importance of fuel efficient vehicles that are still safe and fun to drive. Industry trends cited record-level gas prices for the beginning of the trend toward more fuel efficient vehicles. The forecast for the 2006 model year showed Japanese Big Three (Honda, Nissan, and Toyota) continuing to capture market shares. Customer needs were being met by these companies. Fuel efficient and hybrid vehicles were being manufactured with attention to quality (Edmunds, 2007). The manufacturers spotted the trend and produced quality vehicles that met the customer's needs.
Toyota maintains quality at all levels of the company. This method allows Toyota to garner the best input from every employee. Special attention is paid to Toyota's methods for gathering input from all employees. "Toyota receives 4,000,000 ideas from its 80,000 employees. Since over 95% are implemented, this is over forty-six implemented ideas per employee per year" (Wadsworth, Stephens, and Godfrey, 2002, pg. 92). Toyota leverages the knowledge each employee gains while performing job functions. This allows for a close check to be kept on the quality of the products being manufactured.
Service companies lose millions of dollars when failures become repetitive. The failures result in redesign costs, liabilities, and transaction costs (Free Quality, 2007). Much of the business lost as a result of failures is the most serious cost and causes customer defection. The task that service companies must provide is error-free services. Error-free service becomes challenging due to subjective