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Cost of Quality
The cost of poor quality are
Failure cost
Appraisal cost
Prevention Cost
Hidden Cost
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Failure Cost These Cost are associated with the manufacturing
and usage of products, which fail on QualityRequirements.
Failure Cost : Internal failure Cost &
External Failure Cost
Internal Failure cost : cost associated with themanufacture of products which fail on qualityrequirements
These comprise losses arising out of Cost of labour, materials, machines hours etc, lost in
scrapped items
Cost of rework/ reassembly at subsequent stages
Cost of failing to meet contracted schedules
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External failure cost: Cost associated with theusage of products which fail on quality
requirements
These comprises imputed costs of shippingdefective products to customers such as:
Cost of attending to consumer complaints and repairs(repair cost)
Cost of replacement
Cost of legal liabilities arising out of guarantee orproduct liability
Cost of loss of consumer goodwill
Cost of loss of sales due to the publicity of failures
Downgrading
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Appraisal Cost
Costs associated with routine quality control andinformation systems designed to provide managerial controlthrough measurement, evaluation and auditing of existinglevel of Quality
Cost of Quality data acquisition and analysis consist of: Cost of inwards, in process and final inspection
Cost of destructive test losses, if any Cost of preparation of reports and audits Cost of maintenance and calibration of test
instrumentations and facilities Cost of administrative machinery and organization for
inspection, testing and appraisal
Product review cost Process control cost Quality engineering cost Field evaluation cost
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Prevention Costs
These costs are incurred to ensure that badquality does not occur in manufactured goods.These are: Cost of quality data acquisition and analysis for
prevention
Cost of Pilot production and scientific product
development Cost of engineering quality at design state
Cost of quality planning and organization
Product review analysis
Cost of process control
Research and testing costs aimed at quality assuranceand quality enhancement
Cost of training for quality
Trouble shooting and failure analysis
Administrative costs of systems and staff
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Hidden Costs
Potential Lost sales Cost of redesign due to quality reasons
Cost of software changes due to quality reasons
Extra manufacturing costs due to defects
Scrap not reported
Excess process costs of acceptable products
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The masters of quality
W Edward Deming
First American quality expert to teach Japanesemanagers methodically about quality
Deming propounded the followingprinciple
The PLAN-DO-CHECK-ACT-CYCLE
Quality Through
Constancy of purpose
No inspection
Continuous improvement Barrier less communication
Pride of workmanship
Continuous training
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Demings Famous 14 point methodologyConstancy of purposeThe new philosophy
Cease dependence on InspectionEnd awarding lowest tender contractsImprove every ProcessInstitute training on the JobInstitute LeadershipDrive out FearBreak down barriersEliminate exhortationsEliminate arbitrary numerical targets
Permit pride in workmanshipEncourage educationCommitment of the top management
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Joseph M JuranJurans Quality TriologyQuality Planning
Identify the customers Determine their needs Translate those needs into our language Develop a product that can respond to those needs Optimise the product features to meet our and
customer needsQuality Improvement
Develop a process, which is able to produce theproduct
Optimize the Process
Quality Control Prove that the process can produce the product the
product under operating conditions Transfer the process to operations
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Juran propounded the following
message on qualityQUALITY MUST BE AN INTEGRAL PART
OF MANGEMENT
QUALITY IS NO ACCIDENTQUALITY MUST BE PLANNED
THERE IS NO SHORTCUTS TO QUALITY
USE PROBLEM AS SOURCES OFIMPROVEMENT
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Jurans Formula
Build an awareness of the need and give an opportunityfor improvement Set goals for improvement Organize to reach the goals ( establish a quality council,
identify problems, select projects, appoint teams,designate facilitators)
Provide training Carry out projects to solve problems Report progress Give recognition Communicate results
Keep score Maintain momentum by making annual improvement
part of the regular systems and processes of thecompany.
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Philip B CrosbyHe had given FOUR ABSOLUTES OF QUALITY
The Definition: Quality is conformity torequirements, not goodness
The System: Prevention not appraisal
The Performance standards: Zero Defects
The Measurement: The price of non-conformity torequirements, not quality indices
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Based on these premises, Crosby developed a 14step methodology
Crosbys 14 steps: Management commitment Quality Improvement team Quality measurement Cost of quality Quality awareness
Corrective action Zero defect planning Supervisor training ZD day Goal setting
Error cause removal Recognition Quality council Do it over again
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The best known TQM Models are:
Deming Award Criteria
Malcolm Baldridge Award Criteria
European Foundation for Quality Management(EFQA) Award Criteria
Australian Quality Award Criteria
Confederation of Indian Industries (CIl) AwardCriteria
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Japanese 5 S practice
The 5 S practice is a technique used to
establish and maintain qualityenvironment in an organization.
The 5 S stand for five Japanese words
Seiri
Seiton
Seiso
Seiketsu
Shitsuke
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Japanese Meaning Typical examples
Seiri Organization Throw away rubbish
Seiton Neatness 30-second retrieval of a
document
Seiso Cleaning Individual cleaning
responsibility
Seiketsu Standardization Transparency of storageShitsuke discipline Do 5 S daily
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Step1 Seiri (Straighten up)
Its about separating the things which arenecessary for the job from those that are not.
Differentiate between the necessary and theunnecessary and discard the latter in thefollowing areas:
Work in Process
Unnecessary toolsUnused machinery
Defective products
Paper and documents
This can be achieved by;Stratification Management
Differentiate between needs and wants
One is best
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Step 2 Seiton (Put things in order)
Things must be kept in order so that they are
ready for use when needed. It is all aboutneatness.
There are 4 ways to achieve neatness
Analyse the status quo Decide where things belong Decide how things should be put back Obey the put-away rules (Putting things back where
they belong)
Step 3 Seiso (Clean up)Keep the workplace clean. Everyone in theorganization from the managing director to thecleaner should undertake this job.
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Step 4 Seiketsu (Personal cleanliness)
Make it a habit to be clean and tidy starting with your ownperson. The emphasis is on visual management (putappropriate labels) and standardization.
Step 5 Shitsuke (Discipline)
Discipline means instilling the ability of doing things theway they are supposed to be done.
The emphasis here is creating a workforce with good habits.
How to implement 5 S in the organization Step 1 Get the commitment of the top management and
be prepared
Step 2 Draw up a promotional campaign
Step 3 Keep records
Step 4 5 S training
Step 5 Evaluation