Preview

A Review of Research on Cost of Quality Models (P-A-F Models) and Best Practices

Satisfactory Essays
Open Document
Open Document
969 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
A Review of Research on Cost of Quality Models (P-A-F Models) and Best Practices
1.0 Title
A Review of Research on Cost of Quality Models (P-A-F Models) and Best Practices

2.0 Introduction
In every organization, measuring and reporting the cost of quality (CoQ) is an important issue they must consider. Quality is a critical factor to defeat competitor and to retain customer and to meet the customer’s need. CoQ is a sum of conformance cost (cost for prevention of poor quality) and nonconformance cost (cost of poor quality caused by product and services failure). CoQ analysis link and relates improvement actions with associated customer expectations and this is seen as the coupling of reduced costs and increased benefits. Nowadays, many organizations seeking the best practiced of CoQ based on the existing CoQ approach. Hence, the cost of doing a quality job, conducting quality improvements and achieving goals must be carefully managed, so that the long-term effect of quality effect of quality on the organization is a desirable one. These costs must be a true measure of the quality effort, as well as the best determined from an analysis of the costs of quality. The analysis as such provides a method of assessing the effectiveness of the management of quality and it is a means of determining problem areas, opportunities, savings and action priorities. There are various models and one of it is the PAF (Prevention, Appraisal and Failure) model. Overall, this model basically split the quality related activities cost into three namely prevention cost (cost associated with the design, implementation and maintenance of the TQM system), appraisal costs (costs associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products and services to ensure they conform to specifications) as well as failure costs (costs that occur when the results of work fail to reach designed quality standards).

3.0 Model Description (PAF Model)

Feigenbaurn (1974) proposed a model to analyse quality cost that is almost

You May Also Find These Documents Helpful

  • Best Essays

    The aim of this learning objective is to produce a critical evaluation-report on quality using a case study. Wallace and Gravells define quality as “the level to which a product or service meets the needs of the customer” (2007, p. 113). It can also be thought of in terms of value for money and maintaining standards. However, customers do not always know what they need or what should be included as part of a product. Value for money is subjective and can be complicated by preconceptions of more expensive products as being better quality and cheaper ones as being poorer quality. Moreover, maintaining standards does not mean keeping everything the same: rather, a product must be developed and improved upon in order to keep up-to-date and reflect advances in the sector. Quality can only be achieved through a process of quality assurance and dedication to total quality management (TQM) which requires long-term commitment to a culture of quality at all levels.…

    • 3687 Words
    • 15 Pages
    Best Essays
  • Good Essays

    Our firm is the producer of tangible products. We, as a company, must ensure that we are delivering the highest quality products to our customers to maintain a quality reputation and in order to earn repeat and referral business. We have identified the three types of costs associated with the implementation of quality considerations. We believe that if we are mindful of the following costs our quality will improve, our customer satisfaction will improve and our business will prosper. The three types of costs associated with quality considerations are prevention costs, appraisal costs, internal and external failure costs. Prevention costs are the most effective way to avoid unnecessary problems with production and sales quality. These costs are defined as any steps we as a company can take to pre-emptively avoid any future defects by providing our employees with things such as, proper tools to complete their assigned work, safe and proper working conditions, proper and effective training of all new employees and continual training and education for all existing employees, and by implementing quality control systems to ensure all products produced are up to the company’s and customer’s quality standards. Appraisal costs are the costs associated with the testing and inspection of purchased materials used in the productions process, inspection of the items the company is producing, checking items produced for conformance, quality control audits and field testing of items produced and the cost of the labor associated with all of these items. These costs are ultimately the quality costs resulting from quality control and while they may be high in numbers but are imperative during the manufacturing and production processes. Internal failure costs are the costs that we would incur should we fail to meet the quality standards of the…

    • 865 Words
    • 25 Pages
    Good Essays
  • Good Essays

    QHT1 Task 1

    • 1046 Words
    • 4 Pages

    As we discussed in our most recent phone conversation, there are three types of costs associated with quality. They are appraisal costs, prevention costs, and failure costs. Each of these costs is interrelated so that a decrease in one type of cost often leads to an increase in another type of cost. For example, a decrease in prevention costs could ultimately lead to an increase in failure costs. As you requested, I will explain each cost type and evaluate each type while considering the potential trade-offs that will arise if we make changes to our current processes.…

    • 1046 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Week 3 article Summary

    • 845 Words
    • 3 Pages

    Quality management has been and is considered to be one of the major drivers of performance drivers in organizations. There have been many studies done to explore quality management and their relationship with performance. The purpose of these studies were to help managers and organizations implement effective quality management. Although there are contributing factors to quality management no single factor contributes to effective quality management. Also none of these contributing factors will improve or is guaranteed to improve performance in the organization.…

    • 845 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    cost and quality analysis

    • 842 Words
    • 4 Pages

    Presently, cost and quality in health care are both indicators that are benchmarked in determining best healthcare practice. Two organizations both work towards meeting these objectives in healthcare, The Agency for Healthcare Research and Quality (AHRQ), a public agency and the Commonwealth Fund, a private agency.…

    • 842 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    In order for any organization to survive the fierce competition in the business world, the organization must be aware of opportunities to grow and reduce costs and be supported by Total Quality Management Process. The TQM process helps the company create new products ensuring the utmost standards of quality and customer satisfaction is achieved, which is the main goal of TQM process. In addition, the TQM process also helps in improving a company 's bottom line profits by increasing operating efficiencies, eliminating waste, and creating working conditions conducive to productivity and company growth. The company 's employees work in a healthy environment, which maximizes their efficiencies and enables them to perform at their best levels. In both the short-term and long-term, the quality improvement process pushes the company from different angles to achieve strategic goal and plans.…

    • 1721 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Lakhal L., Pasin F., Limam M., (2006). Quality management practices and their impact on performance. International Journal of Quality & Reliability Management. Vol.22 Iss:6, pp. 625-646…

    • 961 Words
    • 4 Pages
    Good Essays
  • Good Essays

    The first costs to consider are appraisal costs. Appraisal costs are those which relate to inspecting, testing and any activities designed to uncover defects, or ensure there are none, as illustrated on page 420 of “Operations Management” by Stevenson, W. J. (2009.) The second type of costs includes those of prevention. In other words, any attempts our company would make preventing defects from actually occurring. This may include better planning, training or quality control procedures. The third is failure costs, which are “incurred by defective parts or by faulty services.” All internal failures discovered during the production process, or external failures (those discovered after delivery to our customers.)…

    • 2336 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Role of Stakeholder Paper

    • 601 Words
    • 3 Pages

    The role of stakeholders in implementing a quality management process is crucial in the development of a quality management process for the organization. Practicing a quality management process entails having a corporate culture that has a primary focus on product quality and that stresses collaboration in the form of teamwork between all the corporation stakeholders. Prior to the development of an effective quality management process the requirements and stakeholders expectations must be identified and an understanding of the relationships between stakeholders will facilitate the corporate management and alignment of applicable quality standards and procedures prior to implementation to attain its objectives. Stakeholders must work in collaboration with each other to achieve common goals as a product that is gained through this combined team effort. The main relations for an organization are not only with its consumers but also would include its relationships with the employees, suppliers, partners, investors, and government regulators, and other stakeholders that may affect the general market environment in which the organization operates. All of the stakeholder relationships make up a very important network that when altered in any way can produce a domino effect on the interdependent relationships that exist between the organization stakeholders. This is when a quality management process can create success in meeting internal and external customer,…

    • 601 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    There are many researches showing that total quality management is the predominant factor to remain business organizations’ sustainable competitiveness and generate the best result (e.g., Easton & Jarrell, 1998; Hendricks & Singhal, 1997; Lemak et al., 1997; Samson & Terziovski, 1999; Shetty, 1993). What is quality? How could a good total quality management dedicate to organization? Are they the same in any organizations? Understanding the importance of quality, many organizations have appointed a Quality Manager to manage quality operation as a whole. In order to study the contributions of TQM, take a medium-size manufacturing as an example, what should a quality manager do to improve the overall performance? In this article, playing a role of Quality Manager, I will propose my recommendations based on three main points: understand quality and improvement, understand the system and draw up a total quality management strategy.…

    • 1691 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Every nation has its own independent historical and cultural background. The quality scenario, therefore, differs from one national setting to the other. The nations are orienting their quality management strategies and systems to meet the requirements of the operating environment though the primary focus remains the same, that is, Total Customer Satisfaction.Many of the present techniques of quality management were developed in Japan. However, U.S.A., European nations and developing nations have also contributed significantly to this development.…

    • 3095 Words
    • 13 Pages
    Powerful Essays
  • Satisfactory Essays

    House of quality (HOQ), building a HOQ, QFD process. Failure mode effect analysis (FMEA) –…

    • 263 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    What Is Quality Management

    • 1886 Words
    • 8 Pages

    A frequently used definition of quality is “Delighting the customer by fully meeting their needs and expectations”. These may include performance, appearance, availability, delivery, reliability, maintainability, cost effectiveness and price. It is, therefore, imperative that the organization knows what these needs and expectations are. In addition, having identified them, the organization must understand them, and measure its own ability to meet them. Quality starts with market research – to establish the true requirements for the product or service and the true needs of the customers. However, for an organization to be really effective, quality must span all functions, all people, all departments and all activities and be a common language for improvement. The cooperation of everyone at every interface is necessary to achieve a total quality organization, in the same way that the Japanese achieve this with company wide quality control. Quality is important for the continuous growth and survival of the nations, industries, organizations, and individuals.…

    • 1886 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    Quality is something in industries covered long ago, several methodologies have emerged, all with the goal of improving quality while reducing costs, since the cost of the defect can be disastrous, not only for finance but also for the name of firm…

    • 967 Words
    • 3 Pages
    Better Essays
  • Good Essays

    Case Abstract Texas Instrument’s Materials & Controls (M&C) Group, a manufacture of clad and solid gold alloys for the jewelry industry, was founded in 1916. As the company grew bigger over time, TI had to perform competitively among other companies from all over world while reducing the costs of the products. At TI, quality was major focus during the international competition. Moreover, management also understood that, in order to obtain the long-run competitive success, it had to encounter greatly on expanding quality control. Thus, the company came up with “Total Quality Thrust” in which they developed the quality control system (i.e. they recorded cost of quality arose by the poor quality/performances of any process/products in a book called Quality Blue Book). Though the company could successfully implement the quality control system by measuring quality in financial term, the company could not lower down all the quality costs incurred. It could only implement the optimum level of relationship among the 4 costs (prevention, appraisal, internal & external) encountered. Why did TI choose to adopt a financial measure of quality? Choosing the right measure for quality is important. Many ways were used to measure effectiveness of “quality system”. Among them are the calculations of number or percentage of non-conformances produced; measurement of process performance such as CP Index, Cpk or capability ratio; customer returns; level of internal rejects and so on. While these methods have value in manufacturing, the only one that has any lasting effect on future viability of an operation is that measurement of quality in financial terms. Why use COQ instead of direct measures of quality (DMOQ)? By having measured DMOQ, we will not be able to see the loss of sales directly. DMOQ only measures the quality (attributes) of the products or services based on the customer specification and expectations. Sometimes it can be physical terms such as % on delivery time,…

    • 528 Words
    • 3 Pages
    Good Essays