Cof Qpresentation1
- 1. Cost of Quality An overview of non-value added costs and what to do with them
- 2. Cost of Quality Understand the cost of quality concepts Learn how to implement a cost of quality process
- 3. Cost of Quality Concepts As the concept of measuring quality costs evolved and practiced, several findings became evident. The most notable are as follows:
- 4. Quality Cost Categories Internal Failure Costs External Failure Costs Appraisal Costs Prevention Costs
- 5. Internal Failure Costs All work performed to contain and correct the results of the problem. Scrap: Material, labor and overhead wasted on services that cannot be repaired or reworked. Reinspection: Reinspection and retest of reworked service. Rework: Work performed such that the resulting service will meet the customers specification. Concessions: Selling to the customer at a reduced cost when services do not meet specification but are still functional. This can include recasting a break, additional testing, discounting TV, phones, etc., to provide service recovery.
- 6. External Failure Costs: All costs required to perform corrective actions on the symptoms of the problem which include: Phone calls, meetings, expediting replacement parts, warehouse searches, travel to the customer, extra testing, etc. Product Liability Costs: Costs incurred in responding to legal challenges brought on by defective services. Loss of Customer Goodwill: Non-visible costs associated with the loss of potential sales due to customer dissatisfaction over poor quality services. This can include misdiagnosis, wrong medications, readmissions, etc.
- 7. Appraisal Costs Inspection and Test Activities: Costs associated with planned (not reactive) inspection, testing and surveillance activities used to determine the conformance of product. Quality Auditing: Costs associated with the evaluation of the quality system including ISO activities. Laboratory Testing: Costs associated with planned (not reactive) internal or external laboratory confirmation testing. Installation Testing: Costs associated with the verification of installation activities.
- 8. Prevention Costs Costs associated with activities performed to ensure the service is delivered defect-free. Develop the specifications for purchased product. Select subcontractors (approved vendors.) who can supply product which meets specified requirements. Training: Costs associated with equipping personnel with the knowledge and tools to produce a quality service. Costs associated with evaluating and selecting suppliers based on their quality capability. Reviewing sources of information then taking action to prevent future problems
- 9. The Quality-Productivity Model Quality and productivity are connected as described in the following relationship that was presented by W. Edwards Deming
- 10. Value Added Analysis Process control: Making product or producing service Inventory control: Receiving, stock-keeping, material handling Purchasing: Costs of subcontracting product Training: Producing competency in employees Design control: Developing designs which satisfy customer's needs
- 11. WORKSHOP Value Added (VA) or Non-Value Added (N)
- 14. COQ-1 Quality and Productivity The Three Sources of Cost Reduction Opportunities
- 19. Brainstorming with Cross-Functional Teams “Silent” Brainstorming
- 23. Activity-Based Costing Traditional cost systems use a two-stage process to allocate costs.
- 26. Developing an Activity-Based Cost System
- 30. Formalize the Information Gathering Strategy Central Information System:
- 32. The COQ Report
- 34. Improvement Opportunities Pareto charts or pie charts are excellent tools for identifying the most important improvement opportunities . September Quality Costs $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Secondary Quality Reviews Machine room Damage Contaminated filters Dropped Elements Poor resistance Low wafer yield No Customer Filters Stock Out Poor Bond Derbies Too much glue Cracked Cans Bad filters
- 35. COQ-6: Problem Solving Strategies
- 37. Summaries for each Individual Measurement
- 39. The Objectives of the Cost of Quality Program A Cost of Quality Program identifies, measures and monitors an organization’s quality costs. The primary objectives are: Quantify the quality costs in the “language of management” -money. Identify major opportunities for improvement and cost reduction. Identify opportunities to reduce customer dissatisfaction by identifying after-sales product deficiencies .