November 27, 2014  |  By  | 

Excellence Quality The cost of doing a quality job, conducting quality improvements and achieving goals must be carefully managed, so that the long-term effect of quality on the organisation is a desirable one. These costs must be a true measure of the quality effort, and are best determined from an analysis of the costs of quality. Such an analysis provides: • A method of assessing the effectiveness of the management of quality • A means of determining problem areas, opportunities, savings and action priorities Cost of quality is also an important communication tool. Crosby demonstrated what a powerful tool it could be to raise awareness of the importance of quality. He referred to the measure as the “Price of Non- conformance” , and argued that organisations chose to pay for poor quality. Quality-related activities that will incur costs may be split into prevention costs, appraisal costs and failure costs. are associated with the design, implementation and maintenance of the TQM system. They are planned and incurred before actual operation, and could include: • Product or service requirements – setting specications for incoming materials, processes, nished products/services • Quality planning – creation of plans for quality, reliability, operational, production, inspection • Quality assurance – creation and maintenance of the quality system • Training – development, preparation and maintenance of programmes are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products and services to ensure they conform to specications. They could include: • Verication – checking of incoming material, process set-up, products against agreed specications • Quality audits – check that the quality system is functioning correctly • Vendor rating – assessment and approval of suppliers, for products and services can be split into those resulting from internal and external failure. occur when the results of work fail to reach designed quality standards and are detected before they are transferred to the customer. They could include: • Waste – doing unnecessary work or holding stocks as a result of errors, poor organisation or communication • Scrap – defective product or material that cannot be repaired, used or sold • Rework or rectication – the correction of defective material or errors • Failure analysis – activity required to establish the causes of internal product or service failure occur when the products or services fail to reach design quality standards, but are not detected until after transfer to the customer. They could include: • Repairs and servicing – of returned products or those in the eld • Warranty claims – failed product that are replaced or services re-performed under a guarantee • Complaints – all work and costs associated with handling and servicing customers’ complaints • Returns – handling and investigation of rejected or recalled products, including transport costs page 2 of 7

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