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Terry Nolan
on what constitutes `quality' despite what the dictionaries might suggest, and it appears that the more we hear it the more confusing its meaning seems to become
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to produce the finest and most admirable results possible ... Quality is achieving or reaching for the highest standard as against being satisfied with the sloppy or fraudulent ... It does not compromise with second-rate (Tuchman, 1980, p. 39).
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driven
Quality=Customers perceptionsnot our own!
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Quality does not have the popular meaning of `best' in any absolute sense. It means `best for certain customer conditions'. These conditions are (a) the actual use and (b) the selling price of the product. Product quality cannot be thought of as apart from product cost
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the extent to which the product or service conforms to the design specifications
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quality is a manufacturing-based outlook. It implies that once a design or a specification has been established by the producer, any deviation from it, during production or downstream from production, means a reduction in quality
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specifications' tended to be internally focused. By using this view of quality, organizations pay:
little attention to the link, in customers' minds, between quality and product characteristics other than conformance. Rather, quality is defined in a manner that simplifies engineering and production control. On the design side, that has led to an emphasis on reliability engineering. On the manufacturing side, it has meant an emphasis on statistical quality control (Garvin, 1988, p. 45).
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extent to which a product successfully serves the purposes of the user, not the manufacturer, merchant or the repair shop it ensures that firms are more externally focused by paying greater attention to the changes in the market.
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the accounting journals Large timing delays between quality costs and benefits create distortion Accounting rules do not lend themselves to measuring quality
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costs is necessary A clear definition of quality needs to be made before the costs associated with it can be measured.
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CoQ
The two definitions which are most commonly agreed upon are:
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Conformance Costs
Appraisal Costs - associated with measuring and
evaluating the product or service quality to ensure conformance. These include the cost of inspection, test or audit of purchases, manufacturing or process operations and finished goods or services.
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to the final shipment of the product or the delivery of the service. Costs include, defects that are found prior to customer delivery, net cost of scrap, spoilage, rework, supplier rework, re-inspection and retest, downtime due to poor quality etc.
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defects occurring after product shipment or service delivery. These include warranty charges, customer complaint adjustments, returned merchandise, product recalls, allowances and product liability. They also include the costs of labour and travel associated with the investigation of customer complaints
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0
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Quality of Conformance
100
(ii) they must be continued any way to preserve the earlier quality improvements.
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Failure costs
0
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Quality of Conformance
100
3.
Internal failure costs will initially increase as the inspection programs are implemented but should then gradually decrease with learning
External failure costs should continue to fall as various TQ programs are brought on line
4.
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COQ measurements do not solve quality problems Publication of the cost figures does not stimulate cost reduction COQ reports do not provide specific actions COQ calculations do not capture all of the cost Standard accounting conventions do not cater for COQ needs Important costs can be easily omitted from the COQ calculation
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effect, and a COQ report may not capture all the changes in the same period Quality costs are subject to judgement and estimation, which can cause distortion COQ has a tendency to be short term
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Summary
The various definitions discussed show that there
Terry Nolan