Consumer Act: businesses beware

Johannesburg - The Consumer Protection Act (CPA) - to be introduced in October - has serious implications in every aspect of business relating to consumer relations, said consultancy House of Performance on Thursday.

Gregoire Aucamp, an advisor at the consultancy which focuses on continuous improvement, said retailers, wholesalers and manufacturers would need to take steps to minimise potential losses and lawsuits for poor service and defective products.

"Companies need to evaluate the current level of quality in their organisation, specifically the cost related to poor quality," Aucamp said in a statement.

"Estimates have it that the cost of poor quality could be anything between two percent to 20% of gross sales," Aucamp said.

Middle management in South Africa were generally recognised as being weak and operated under old hierarchical management structures.

"The question remains how this will impact on consumer and/or client relationships."

Aucamp said because the law imposed responsibility on any producer, importer, distributor or retailer for damage caused by supplying defective goods, management would need to take a more active role in addressing these issues.

"Managers will need to look at issues such as inadequate instructions or warnings.

"This means that a retailer could be responsible for errors made by the producer, importer or distributor, and companies will need to do their own quality control even as a distributor and retailer."

Aucamp said the tide was turning and the days of just offering a voucher to compensate for defective products or services were fast coming to an end.

"Companies that do not have a quality improvement programme in place need to do this as a matter of urgency.

"Besides ascertaining how the supply of defective products and services could result in possible legal claims, they should also determine the root causes of the quality problems in their organisations."

Aucamp said companies should examine poor quality in management controls, behaviour of management and front line employees as well as leadership at all levels.

"There are ways to provide better products and service.

"The challenge is to establish a way of thinking and acting across the entire organisation, and not just applying specific tools and methodologies."

The goal should be to expose poor quality and identify opportunities for improvement in business and to remove this waste over time and improve the quality of products and services that all impacted the consumer experience.

These improvements are achieved not by working harder, but by working smarter.

"The concept of continuous improvement implies employee involvement and establishing a mindset of the fact that there was always room for improvement," he said.

Highly-effective managers and supervisors were crucial, especially in large companies, to connect top management's vision to work-floor ideas, and in turn enhance product quality and customer service.

- Sapa