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Cost of Quality
It is a term widely used- and widely misunderstood. The Cost of quality isn't the price of creating the quality product or service. It's the cost not creating a quality product or service. Every time work is redone, the cost of quality increases. Obvious example include 1. Reworking of a manufactured item. 2. The retesting of an assembly 3. The rebuilding of a tool etc. In short , any cost that would not have been expended if quality were prefect contributions to the cost of quality. Total Quality Costs Quality costs are the total of the cost incurred by : 1. Investing in the prevention of nonconformance to requirements, 2. Appraising a product or service for conformance to requirements, 3. Failing to meet requirements. Quality Costs - General Description Prevention costs - The costs of all activities specifically designed to prevent poor quality in products or services. Examples are the costs of : New Product Review Quality Planning Supplier capability surveys process capability evaluations quality improvement team meetings Quality improvement projects Quality education & training Appraisal Costs The costs associated with measuring, evaluating or auditing products or services to assure conformance to quality standards and performance requirements. These include the cost of : Incoming and source inspection/test of purchased material, In process and final inspection/test, Product, process or service audits, Calibration of measuring and test equipment. Failure Costs The costs resulting from products or services not conforming to requirements or customer/user needs. Failure costs are divided into internal and external failure categories. Internal Failure Costs - Failure costs occurring prior to delivery or shipment of the product, or the furnishing of a service, to the customer. E.g.. costs of scrap, rework, re-inspection, re-testing, material review, downgrading. External Failure Costs - Failure costs occurring after delivery or shipment of the product - and during or after furnishing of a service -- to the customer. E.g. Processing customer complaints, customer returns, warranty claims, product recalls. Total Quality Costs : The sum of the above costs. This represent the difference between the actual cost of a product or service and what the reduced cost would be if there were no possibility of substandard service, failure of products or defects in their manufacture.
By- Ashish Bhargava Bsc, Msc Electronics, Lead Auditor for ISO9001:2000
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