Do quality costs still matter?

Abstract

Quality has been recognised by companies as a key competitive factor in order to differentiate in a globalised market. To ensure quality that meets customer requirements, companies implement management systems that enable the management to plan, control, secure, and improve the quality of goods and services. To cover these tasks sufficiently, such quality management systems require resources that need to be budgeted. Quality management critics point out again and again that quality management does not make a direct value-added contribution to a company's success and the use of funds must therefore be kept at a minimum. The success of quality management systems is therefore attempted to be measured by monetary and non-monetary indicators. Quality-related indicators, in particular, are used to control the quality management, to provide strategic and operational goal orientation, to identify the quality situation as well as weaknesses, and to enable benchmarking with other sectors or companies. In practice, this means the determination of costs, benefits, and profitability. In a cross-industry survey, the Chair of Quality Science at the Berlin Institute of Technology in cooperation with the Fraunhofer Institute for Production Systems and Design Technology examined the current practices of quality controlling in Germany. For this purpose, companies in the manufacturing and service industries were asked for participation. With a total of 215 respondents, the study provides a comparative overview by which indicators German companies measure the effectiveness and the efficiency of quality management systems. The study reflects a large methodological and content diversity in quality controlling

Future research avenues of cost of quality: a systematic literature review

“…Embedding accounting methods such as the ABC that can more accurately capture quality costs (Elbireer et al, 2010), stochastic programming technique for strategic planning of CoQ (Castillo-Villar et al, 2012b) and the Taguchi loss function for optimizing CoQ (Lim et al, 2015); developing suitable approaches and methods to facilitate the isolation of quality-related costs and benefits (Rabfeld et al, 2015); considering CoQ data collection methods such as field studies or case studies, which might provide more comprehensive and in-depth understanding of the ABC method (Zhang et al, 2015); determining a universally applicable cubic quality loss function (Li et al, 2018); applying methods such as the critic or the least squares method for CoQ data analysis (Shahin and Rezaei, 2018), the top roof or competitive analysis of CoQ (Shahin and Rezaei, 2018), multiple attribute decision making approaches namely the Technique for Order of Preference by Similarity to Ideal Solution based on CoQ data (Shahin and Rezaei, 2018), the importance-performance analysis of CoQ (Shahin and Rezaei, 2018) and fuzzy approaches for CoQ analysis (Shahin and Rezaei, 2018); incorporating more advanced statistical methods for CoQ analysis (Psomas et al, 2018), a method for evaluating hidden costs of failure (Duarte et al, 2018)…”

“…Using novel approaches to gather quality cost data (Karg et al, 2011); identifying how a company makes use of the quality cost information (Cheah et al, 2011;Pires et al, 2017); determining how quality cost data can be used (Al-Tmeemy et al, 2012); providing organization-wide CoQ information (Ozkan and Karaibrahimoglu, 2013); studying how to encourage managers to use quality cost information (Novas and Saraiva, 2014); getting detailed service quality and cost data (Johnston and Ozment, 2015); developing suitable approaches and methods to reduce the burden of CoQ data collection (Rabfeld et al, 2015); considering CoQ data collection methods (Zhang et al, 2015); examining the practical implications of the different uses of qualityrelated cost information (Pires et al, 2017), the reasons why managers use the quality-related cost information according to a diagnostic profile or an interactive profile (Pires et al, 2017) and CoQ data collection in several departments (Czajkowski, 2017); generating new knowledge on the implementation of CoQ measurement (Moschidis et al, 2018); collecting subjective CoQ data from more than one company representative as well as objective data from the company files (Psomas et al, 2018); conducting interviews instead of questionnaires for CoQ data collection (Glogovac and Filipovic, 2018) (continued )…”

Quality costing and quality management maturity in Greece

“…Its initial categorization, however, has been used as a useful tool in a number of studies, in an attempt to better depict and re-organize a company's structure and processes. Malik et al (2016), Raßfeld et al (2015), Kirlioğlu and Çevik (2013), Tye et al (2011), Jafar et al (2010, Omurgonulsen (2009), Desai (2008), Omachonu et al (2004) are only a few of the numerous studies that have been conducted, based on the P-A-F model. The traditional premise of the above model is that the increment in prevention and appraisal costs would lead to the decrease in failure costs.…”

Quality Costs Concept and Measurement –Does a Reaffirmation in a New Direction Needed?

“…Nevertheless, there are serious dilemmas about the "typical scale of the value of quality costs" (Glogovac andFilipovic 2018, 1525). Table 1 provides findings derived from the analyzed research studies, related to the percentage shares of surveyed companies applying quality costs (Ayach, Anouar, and Bouzziri 2019, 100-105;Biadacz 2021, 1;Glogovac andFilipovic 2018, 1524;Gupta и Campbell 1995, 43;Omurgonulsen 2009, 547;Porter and Rayner 1992;Prickett and Rapley 2001, 215;Rabfeld et al 2015Rabfeld et al , 1074Sower, Quarles, and Broussard 2007, 122;Starcević, I. Mijoč, and J. Mijoč 2015, 242;Tye, Halim, and Ramayah 2011, 1303, 1307Williams, van der Wiele, and Dale 1999, 447;Yang 2008, 176). The data analysis shows that the application of quality costs in approximately one third of the surveyed companies in the period from 1981 to 2009, suggests that the companies in the world did not broadly accept the quality costs concept.…”