Quality and OperationsManagement

“Texas Instruments - Cost of Quality

Cost of Quality

• Control Costs– prevention

– appraisal

• Failure Costs– internal

– external

“The COQ includes those costs associated with thedefinition, creation, and control of quality as well asthe evaluation and feedback of conformance withquality, reliability and safety requirements, and thosecosts associated with the consequences of failure tomeet the requirements both within the factory and inthe hands of the customer.”

Cost of Quality

• Prevention– quality planning

– process control

– data acquisition and analysis

– training and personnel development

– design verification

– quality system development and management

– quality reporting

– improvement projects

• Appraisal– test and inspection of incoming

material– lab-based acceptance sampling– in-line inspection and testing– setup for test and inspection– test/inspection equipment and

supplies– quality audits– quality endorsements (ISO,

MBNQA)– field testing– test/inspection equipment

maintenance

Cost of Quality

• Internal– scrap

– rework

– retest

– downtown

– yield losses

– disposition

– engineering analysis

– tracking and reporting

– expediting

• External– customer complaints

– warranty costs

– service and repair expense

– product liability

– recall expense and management

– returned material processing

– credit allowance

– loss of goodwill

Setting The Stage

Why Implement COQ?Pros Cons

COQ categories -- useful or not?

COQ versus DMOQ

Was T.I. Successful?(and will this work anywhere?)

Next Steps for T.I.