Analysis of quality costs for identifying areas of quality improvement—a case study

Abstract

This paper reports the results of a study carried out in one of the plants of a multi‐plant manufacturer with the objective of evaluating and analysing the quality costs to identify areas of quality improvement and quality cost reduction. The study was carried out in two phases, namely the estimation of quality costs as a ‘one‐shot’ study followed by the identification of the ‘vital few’ defects using Pareto analysis, and this was followed by a further analysis using cause‐and‐effect diagrams to find out the underlying causes of these vital defects. This case study shows that even in situations where inspection and relevant records/data are not available, the necessary data can be obtained through a step‐by‐step analysis of current procedure and methods, and collection of data with regard to defects; and the data, thus obtained, can be used for the evaluation of quality costs. Moreover, an objective analysis of category‐wise and shop‐wise quality costs, with the help of Pareto and cause‐and‐effect analyses can bring out the critical quality problems and subsequently the causes for these critical defects.