Winchell, William O.; Bolton, Caroline J. (1987, ASQC) General Motors Corporation, Warren, MI; General Motors Corporation, Lansing, MI
The application of quality cost has changed dramatically over the last few years. Traditionally, quality cost was used to track progress in making products -- those items that were shipped from factories to customers. The costs could identify the activities that comprised the quality system for those products. Much prevention effort could be found in product engineering. An extensive investment in inspection could typically be found on the factory floor along with many dollars spent unwisely on rework and scrap. The service department was deeply involved in failure costs -- fixing things causing customer inconvenience.Now quality cost is being applied in staff departments. A staff department, or any activity within a department, can be assumed, in this new "micro" application for quality cost, to be producing a product or service for another department. The producing department or activity has its own internal failure cost for not "doing the job right the first time". If the department receiving the product or service does not find it suitable, then external failure costs for the providing department may result. In addition there are most likely inspection and prevention costs in the providing department.The quality costs of many staff departments, using the traditional "macro" approach could be almost totally classified as prevention. But when using the "micro" approach, these same departments now have the full spectrum of quality costs -- prevention, appraisal, internal failure and external failure. To truly reap the full benefits of quality cost, both approaches must be used.