Cost Of Quality 365n6
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TQM- COST OF QUALITY
Quality is to continuously satisfy customer’s satisfaction Total Quality is to achieve quality at low cost Total Quality Management is to achieve Total Quality through everybody’s participation Cost of Quality -Refers to the costs associated with providing poor quality product or service. -The sum of Failure cost, Inspection/ Appraisal cost, and Prevention cost
TQM- COST OF QUALITY
Quality Control Cost Prevention Cost-Costs incurred in the process of preventing poor quality from occurring. [Cost of preparing and implementing a quality plan] Appraisal Cost- Costs incurred in the process of uncovering defects. [Costs of testing, evaluating, and inspecting quality]
TQM- COST OF QUALITY
Quality Failure Cost External Failure Cost- Costs associated with quality problems that occur at the customer site. [Costs of failure at customer site, including returns, repairs, and recalls] Internal Failure Cost- Costs associated with discovering poor product quality before the product reaches the customer. [Costs of scrap, rework, and material losses]
TQM- SAMPLE CASE
Cost of Quality (US$)
70000 60000 50000 40000
External Internal Appraisal Preventive
Exter nal
30000 20000
Inter nal
10000 0 Before
Apprai sal
Prevent ive
After
Expectation (after 5 years)
TQM- JURAN’S MODEL OF OPTIMUM QUALITY COST
Cost Per Good Unit of Product
Total Quality Cost
Optimum lies below
Failure Cost
100% Quality Level.
It will take infinite
Cost of Appraisal plus Prevention
0 (100% defective)
Quality Level
Juran’s Model of Optimum Quality Cost (1979)
investment to reach zero defects. 100% (100% good)
TQM- JURAN’S MODEL OF OPTIMUM QUALITY COST
Cost Per Good Unit of Product
Total Quality Cost
Failure Cost
Optimum quality level equals zero defects
Cost of Appraisal plus Prevention
0 (100% defective)
Quality Level
Juran’s revised Model of Optimum Quality Cost (1988)
It can be possible to
100% (100% good)
achieve zero defects by continuous improvement- a never ending effort to totally eliminate all forms of waste.
TQM- COST OF QUALITY
If we can define it- we can measure it; If we can measure it- we can analyze it; If we can analyze it- we can control it; If we can control it- we can improve it. R.M. McNealy (1994)
Quality is to continuously satisfy customer’s satisfaction Total Quality is to achieve quality at low cost Total Quality Management is to achieve Total Quality through everybody’s participation Cost of Quality -Refers to the costs associated with providing poor quality product or service. -The sum of Failure cost, Inspection/ Appraisal cost, and Prevention cost
TQM- COST OF QUALITY
Quality Control Cost Prevention Cost-Costs incurred in the process of preventing poor quality from occurring. [Cost of preparing and implementing a quality plan] Appraisal Cost- Costs incurred in the process of uncovering defects. [Costs of testing, evaluating, and inspecting quality]
TQM- COST OF QUALITY
Quality Failure Cost External Failure Cost- Costs associated with quality problems that occur at the customer site. [Costs of failure at customer site, including returns, repairs, and recalls] Internal Failure Cost- Costs associated with discovering poor product quality before the product reaches the customer. [Costs of scrap, rework, and material losses]
TQM- SAMPLE CASE
Cost of Quality (US$)
70000 60000 50000 40000
External Internal Appraisal Preventive
Exter nal
30000 20000
Inter nal
10000 0 Before
Apprai sal
Prevent ive
After
Expectation (after 5 years)
TQM- JURAN’S MODEL OF OPTIMUM QUALITY COST
Cost Per Good Unit of Product
Total Quality Cost
Optimum lies below
Failure Cost
100% Quality Level.
It will take infinite
Cost of Appraisal plus Prevention
0 (100% defective)
Quality Level
Juran’s Model of Optimum Quality Cost (1979)
investment to reach zero defects. 100% (100% good)
TQM- JURAN’S MODEL OF OPTIMUM QUALITY COST
Cost Per Good Unit of Product
Total Quality Cost
Failure Cost
Optimum quality level equals zero defects
Cost of Appraisal plus Prevention
0 (100% defective)
Quality Level
Juran’s revised Model of Optimum Quality Cost (1988)
It can be possible to
100% (100% good)
achieve zero defects by continuous improvement- a never ending effort to totally eliminate all forms of waste.
TQM- COST OF QUALITY
If we can define it- we can measure it; If we can measure it- we can analyze it; If we can analyze it- we can control it; If we can control it- we can improve it. R.M. McNealy (1994)
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