Cost of quality: findings of a wood products ' manufacturer

Abstract

Purpose – Today substantial investments are made to improve the bottom line and cost of quality (CoQ) is a tool that identifies weaker areas where these investments should be directed. In literature, the authors find various CoQ models and their applications but it is deficient in providing a standard format of a “Quality Cost Procedure” for a CoQ program’s company-wide deployment. A procedure was thus developed and its effectiveness was evaluated implementation. The paper aims to discuss these issues. Design/methodology/approach – CoQ program was implemented in the production department of a wood products’ manufacturer using the action research approach. Prevention, Appraisal and Failure Cost model was employed. Data collection was challenging, however, stakeholders were interviewed, data were acquired from Management Information System and various reports were reviewed for cost elements. Findings – Total CoQ as a percentage of sales was found to be 11, while as a percentage of material cost was 15 percent. It was found through the implementation that development of a quality cost procedure is highly iterative in nature and a standard format is proposed in the Appendix. This procedure worked satisfactorily and the company is confident in moving to the next phase of company-wide deployment of CoQ Program. Originality/value – A robust “Quality Cost Procedure” is developed, which not only helped the company but will serve CoQ implementers in their operational as well as tactical levels of management. CoQ implementation prior development of procedure brought conviction and accredited it. Practitioners can mold this procedure as per need, which will further enhance the body of knowledge on CoQ.

Assessment of Cost of Quality and its Effects on Manufacturing Performance: A Case Study of Special Ice Company Limited, Ghana

“…ISSN: 2582-5267 www.ajbsr.net 2 service must also be reduced to the lowest possible cost (Ali, et al, 2013). In view of this, companies need to take steps to improve the quality of their products and services and concurrently place emphasis on other areas of cost because while satisfying the customers' needs and requirements there is the need to do so with the minimum cost (Malik, et al, 2016). This reaffirms the assertion that although an organization will invest huge amount into quality activities, the resulting benefits will be enormous.…”

Costs of Quality in Clinical Development

“…Outside of the pharmaceutical industry, several authors have acknowledged quality as an important factor in improving competitiveness. 3 –10 The main parameters of competitiveness are cost reduction and continuous improvement of customer satisfaction. Other factors that are important include better understanding and control of processes, systematic and effective measurement of costs of quality, improved customer service activities (leads to improved customer satisfaction), and a process-oriented business mentality that also determines the cost accounting system.…”

“…7 This can be done through increased investment in activities to prevent failures and maintaining quality levels. 9 An increased investment in prevention activities can also contribute to increasing the employees’ knowledge of doing “the right thing right first time,” which can lead to a change in company culture and encourage new ways of improving quality. 5…”

“…7 This can be done through increased investment in activities to prevent failures and maintaining quality levels. 9 An increased investment in prevention activities can also contribute to increasing the employees' knowledge of doing "the right thing right first time," which can lead to a change in company culture and encourage new ways of improving quality. 5 However, in the pharmaceutical industry, and more specifically within clinical development, the traditional approach seems to have been focused on compliance with regulations rather than improvement of quality, which is reflected in the use of performance metrics rather than quality metrics.…”

“…18 The pharmaceutical industry is constantly looking for opportunities to break this trend, or at least reduce the pace of the cost increase. [19][20][21] In the context of the increasing costs for research and development in the pharmaceutical industry, there are documented benefits of tracking costs of quality and implementing a costof-quality analysis model in other industries in the literature, 3,9,10,[22][23][24][25][26] indicating that there are potential benefits to be realized also in clinical development. Costs of quality can be found throughout the product development chain, from the supply of raw material to the use of the end product.…”