By

Anil.P

Quality Assessment will be the term used to describe a companywide review of the status of Quality

Assessment of quality comprises four elements: 1. Cost of poor quality 2. Standing in the market place 3. Quality culture in the organisation 4. Operation of the company quality system

Quality is defined as conformance to customer requirements

Manufacturer needs to perform several activities to assure that only conforming products (services) are delivered to the customer.
Quality cost is the cost of performing all such activities (for conformance) along with the cost of failure.

Quality Cost
Quality costs are the reflection of activities

Not done right first time Non adherence to justified manufacturing activities

The quality that is produced today will not satisfy the end-user of the future!

Cost of quality is associated with all cost involved in:

Detection Prevention Appraisal Repairing etc. of a product that doesn't meet the requirements.

2 Parts of COQ
COQ

Cost of Conformance Prevention Cost Appraisal Cost

Cost of Non Conformance Cost of Internal failure Cost of External failure

COQ
Cost of Conformance Prevention Cost Quality Planning Engineering New product review Product / process design Process control SQC / SPC ISO 9001

Training
QC Data collection Supplier quality evaluation

COQ
Cost of Conformance Appraisal Cost

Inspection and testing of incoming materials In-process inspection and testing Final inspection and testing Product quality audits Materials and service consumed Maintain accuracy of test equipments Evaluation of stock

COQ
Cost of Non - Conformance Cost of Internal failure

Scrap / rejection Re-work Re- test, repair Failure analysis

Down time
Yield loss Down grading

COQ
Cost of Non - Conformance Cost of External failure

Complaint investigation & resolution Product / material return Warrantee claims Liability cost

Penalties
Indirect cot (low reputation, low brand image)

The Cost of Poor Quality is:

COPQ = Internal Failure Costs + External Failure Costs

The picture below illustrates the some of the costs associated with poor quality. All of these represent areas of opportunity.

QUALITY COST ELEMENTS Area

Prevention
QFD Reliability analysis Reducibility analysis Design reviews FMEA DOE VA / VE GD & T

Appraisal
Design verification Prototype testing Design validation Field testing Pilot testing Reliability testing

Internal Failure
Engineering and corrective actions Rework due design errors Scrap due to design errors

Design

QUALITY COST ELEMENTS Area

Prevention
Supplier evaluation supplier audit Supplier development PO Tech. data review

Appraisal
Supplier product inspection & tests Supplier monitoring Source inspection

Internal Failure
Disposition cost of incoming rejection Replacement cost of supplier products CA investigation cost Premium frights

Purchase

QUALITY COST ELEMENTS

Area

Prevention
Capability study Inspection and testing planning Measurement system analysis Process control measurement Quality audits Training

Appraisal
Planned inspection & Tests Set up inspections Special tests Lab support Calibration

Internal Failure
material review and CA (incl. Failure analysis) Re inspection and Re test Re work Scrap Sorting and Down grading Idle time (Breakdown, defective material)

QC & Production

The goal of a Cost of Quality system is to:

Facilitate Quality Improvements that leads to operating cost reduction opportunities.

DEFENITION

The cost difference between present operation and

the possible operation of a business with all systems and employees at 100% performance. or

The difference between actual revenues and what

revenues could be if all customers were always satisfied, that is , No Unhappy Customers.

Strategy Premise
The Strategy is based on the premise that:

For each failure there is a root cause. Causes are preventable. Prevention is always cheaper.

Benefits of Improved Quality

Decreases
Defects Overall Costs Returned Goods Employee Turnover Customer Complaints Owner & Mgmt. Stress

Increases
Revenue Sales Capacity Employee Satisfaction Customer Satisfaction Market Share Competitive Edge Personal Time Away

The Goal is not the cost.

But to:

Share information in a widely accepted common language Expose critical problems Prioritize the problems Consciously attack them in a systematic way for continuous improvement Set quantitative goals & develop COQ indices Measure the effectiveness of the Quality system

Any Questions?