Cost of Quality & Quality Gurus

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    Cost of Quality

    The cost of poor quality are

    Failure cost

    Appraisal cost

    Prevention Cost

    Hidden Cost

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    Failure Cost These Cost are associated with the manufacturing

    and usage of products, which fail on QualityRequirements.

    Failure Cost : Internal failure Cost &

    External Failure Cost

    Internal Failure cost : cost associated with themanufacture of products which fail on qualityrequirements

    These comprise losses arising out of Cost of labour, materials, machines hours etc, lost in

    scrapped items

    Cost of rework/ reassembly at subsequent stages

    Cost of failing to meet contracted schedules

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    External failure cost: Cost associated with theusage of products which fail on quality

    requirements

    These comprises imputed costs of shippingdefective products to customers such as:

    Cost of attending to consumer complaints and repairs(repair cost)

    Cost of replacement

    Cost of legal liabilities arising out of guarantee orproduct liability

    Cost of loss of consumer goodwill

    Cost of loss of sales due to the publicity of failures

    Downgrading

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    Appraisal Cost

    Costs associated with routine quality control andinformation systems designed to provide managerial controlthrough measurement, evaluation and auditing of existinglevel of Quality

    Cost of Quality data acquisition and analysis consist of: Cost of inwards, in process and final inspection

    Cost of destructive test losses, if any Cost of preparation of reports and audits Cost of maintenance and calibration of test

    instrumentations and facilities Cost of administrative machinery and organization for

    inspection, testing and appraisal

    Product review cost Process control cost Quality engineering cost Field evaluation cost

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    Prevention Costs

    These costs are incurred to ensure that badquality does not occur in manufactured goods.These are: Cost of quality data acquisition and analysis for

    prevention

    Cost of Pilot production and scientific product

    development Cost of engineering quality at design state

    Cost of quality planning and organization

    Product review analysis

    Cost of process control

    Research and testing costs aimed at quality assuranceand quality enhancement

    Cost of training for quality

    Trouble shooting and failure analysis

    Administrative costs of systems and staff

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    Hidden Costs

    Potential Lost sales Cost of redesign due to quality reasons

    Cost of software changes due to quality reasons

    Extra manufacturing costs due to defects

    Scrap not reported

    Excess process costs of acceptable products

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    The masters of quality

    W Edward Deming

    First American quality expert to teach Japanesemanagers methodically about quality

    Deming propounded the followingprinciple

    The PLAN-DO-CHECK-ACT-CYCLE

    Quality Through

    Constancy of purpose

    No inspection

    Continuous improvement Barrier less communication

    Pride of workmanship

    Continuous training

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    Demings Famous 14 point methodologyConstancy of purposeThe new philosophy

    Cease dependence on InspectionEnd awarding lowest tender contractsImprove every ProcessInstitute training on the JobInstitute LeadershipDrive out FearBreak down barriersEliminate exhortationsEliminate arbitrary numerical targets

    Permit pride in workmanshipEncourage educationCommitment of the top management

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    Joseph M JuranJurans Quality TriologyQuality Planning

    Identify the customers Determine their needs Translate those needs into our language Develop a product that can respond to those needs Optimise the product features to meet our and

    customer needsQuality Improvement

    Develop a process, which is able to produce theproduct

    Optimize the Process

    Quality Control Prove that the process can produce the product the

    product under operating conditions Transfer the process to operations

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    Juran propounded the following

    message on qualityQUALITY MUST BE AN INTEGRAL PART

    OF MANGEMENT

    QUALITY IS NO ACCIDENTQUALITY MUST BE PLANNED

    THERE IS NO SHORTCUTS TO QUALITY

    USE PROBLEM AS SOURCES OFIMPROVEMENT

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    Jurans Formula

    Build an awareness of the need and give an opportunityfor improvement Set goals for improvement Organize to reach the goals ( establish a quality council,

    identify problems, select projects, appoint teams,designate facilitators)

    Provide training Carry out projects to solve problems Report progress Give recognition Communicate results

    Keep score Maintain momentum by making annual improvement

    part of the regular systems and processes of thecompany.

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    Philip B CrosbyHe had given FOUR ABSOLUTES OF QUALITY

    The Definition: Quality is conformity torequirements, not goodness

    The System: Prevention not appraisal

    The Performance standards: Zero Defects

    The Measurement: The price of non-conformity torequirements, not quality indices

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    Based on these premises, Crosby developed a 14step methodology

    Crosbys 14 steps: Management commitment Quality Improvement team Quality measurement Cost of quality Quality awareness

    Corrective action Zero defect planning Supervisor training ZD day Goal setting

    Error cause removal Recognition Quality council Do it over again

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    The best known TQM Models are:

    Deming Award Criteria

    Malcolm Baldridge Award Criteria

    European Foundation for Quality Management(EFQA) Award Criteria

    Australian Quality Award Criteria

    Confederation of Indian Industries (CIl) AwardCriteria

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    Japanese 5 S practice

    The 5 S practice is a technique used to

    establish and maintain qualityenvironment in an organization.

    The 5 S stand for five Japanese words

    Seiri

    Seiton

    Seiso

    Seiketsu

    Shitsuke

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    Japanese Meaning Typical examples

    Seiri Organization Throw away rubbish

    Seiton Neatness 30-second retrieval of a

    document

    Seiso Cleaning Individual cleaning

    responsibility

    Seiketsu Standardization Transparency of storageShitsuke discipline Do 5 S daily

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    Step1 Seiri (Straighten up)

    Its about separating the things which arenecessary for the job from those that are not.

    Differentiate between the necessary and theunnecessary and discard the latter in thefollowing areas:

    Work in Process

    Unnecessary toolsUnused machinery

    Defective products

    Paper and documents

    This can be achieved by;Stratification Management

    Differentiate between needs and wants

    One is best

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    Step 2 Seiton (Put things in order)

    Things must be kept in order so that they are

    ready for use when needed. It is all aboutneatness.

    There are 4 ways to achieve neatness

    Analyse the status quo Decide where things belong Decide how things should be put back Obey the put-away rules (Putting things back where

    they belong)

    Step 3 Seiso (Clean up)Keep the workplace clean. Everyone in theorganization from the managing director to thecleaner should undertake this job.

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    Step 4 Seiketsu (Personal cleanliness)

    Make it a habit to be clean and tidy starting with your ownperson. The emphasis is on visual management (putappropriate labels) and standardization.

    Step 5 Shitsuke (Discipline)

    Discipline means instilling the ability of doing things theway they are supposed to be done.

    The emphasis here is creating a workforce with good habits.

    How to implement 5 S in the organization Step 1 Get the commitment of the top management and

    be prepared

    Step 2 Draw up a promotional campaign

    Step 3 Keep records

    Step 4 5 S training

    Step 5 Evaluation