Implementing Deming's Fourth Point

Article

Windham, Jeff   (1995, ASQC)   U.S. Army, Rock Island, IL

Quality Progress    Vol. 28    No. 12
QICID: 13032    December 1995    pp. 43-48
List $10.00
Member $5.00

FOR A LIMITED TIME, ACCESS TO THIS CONTENT IS FREE!
You will need to be signed in.
New to ASQ? Register here.

Article Abstract

Acceptable quality distribution (AQD) and quality-based incentive pricing (Q-pricing) should replace the acceptable quality level (AQL) approach in procurement. This is how to satisfy W. Edwards Deming's 4th point on avoiding price as the sole criterion for awarding business. AQD and Q-pricing allow government and business to act as consumers who make trade-offs between quality and price. To implement this method, each important feature of a product is assigned a weighted criticality factor, Kn, and an acceptable range for its process capability index, Cpk. A weighted average of the Kns and Cpks as well as a quality incentive factor (QIF) then determine a quality payment factor (QPF), which indicates how much to pay for the product. The formula is: QPF = (1 - QIF) + (QIF)(weighted average Cpk). The article provides examples of calculating these factors for parts procurement and for end-product procurement.

Keywords

Process capability index (Cpk),Procurement,Suppliers,Incentive systems,Government,Acceptable quality level (AQL),Deming, W. Edwards,Deming's 14 points


Browse QIC Articles Chronologically:     Previous Article     Next Article

New Search

Featured advertisers





ASQ is a global community of people passionate about quality, who use the tools, their ideas and expertise to make our world work better. ASQ: The Global Voice of Quality.