Implementing Quality Cost Systems


Winchell, William O.; Hohner, Gregory   (1990, ASQC)   Alfred University, Alfred, NY; Peat Marwick Plaza, Chicago, IL

Annual Quality Congress, San Francisco, CA    Vol. 44    No. 0
QICID: 9539    May 1990    pp. 736-739
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Article Abstract

To achieve total quality concepts, it is imperative that a company understand the economic factors within its quality system. Only through proper balancing of the economic factors affecting the quality system can a company be truly competitive in today's international marketplace. Quality cost techniques are important tools in both understanding the quality system in economic terms and then fine-tuning activities for improved quality and productivity. However, effective implementation of quality cost techniques within a company has historically been a major challenge. This paper presents the results of a study to identify methods to enhance the implementation of these techniques. The research project was commissioned by the National Association of Accountants in close cooperation with the ASQC Quality Cost Committee who acted as advisors. Both manufacturing companies and service organizations that used quality cost techniques were visited as part of the study. Theoretical concepts were tested against actual practices during the visits. Quality cost was felt to be a vital tool in the seeking of continuous quality improvement in both manufacturing and service organizations. Methodologies differed widely among the sites visited and were customized to meet unique needs of each organization. Control type reports were found to be shortlived and were survived by techniques that could support problem identification and the seeking of direction. Cross-discipline problem solving teams .were used as the mechanism for continuous improvement and quality cost supported these teams. The development of the unique quality cost techniques within these teams appeared to be evolutionary in nature.


Cost of quality (COQ)

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