DEFINITION: The cost of quality is defined as what it costs the organization to develop the quality function, that is, what it spends producing with quality (avoiding, preventing or detecting errors, inspecting processes, etc.), and also what the errors produced cost.
Quality is said to be total, because it comprises each and every aspect of the organization, because it involves and engages each and every person in the organization. Traditional quality tried to fix quality after making mistakes; But Total Quality is focused on getting things done right the first time. Japan has made Total Quality one of the pillars of its industrial renaissance, defining it according to the customer.
Total quality is a concept, a philosophy, a strategy, a model of doing business and is customer-focused.
the-cost-of-the-total-qualityQuality cost elements
Prevention costs.- They are obtained from the sum of the cost of all activities that specifically tend to avoid poor quality of services. That is, they are those that occur when you try to reduce or avoid errors.
Evaluation costs.- They are related to the measurement, evaluation or audit of services to ensure that they adapt to
quality standards and established behavioral requirements. That is, they are the total expenses incurred to try to determine if an activity has been carried out correctly.
Internal error costs.- They are those originated by the services that are not adapted to the requirements or needs of the client, when they are detected before the provision of the service.
Examples: rejection, rework, re-inspection, material inspection costs, etc.
External error costs.- They are those caused by services that do not adapt to the requirements or needs of the client when they are detected or while the service is provided (or once it is provided).
Example: processing costs for complaints and returns, etc.
The largest part of the cost of quality is usually that of errors (internal and external). It is here where there are more opportunities for improvement (cost reduction and elimination of causes of customer dissatisfaction).
Characteristics of a Quality System:
- Being focused on quality, based on prevention and continuous improvement, aiming at long-term success, its objective is the satisfaction of the clients or recipients of the organization's activity.
Purpose:
The purpose of any quality system is to facilitate improvement activities, which will reduce costs.
It is essential to have a precise and reliable measurement system and analysis of the data obtained regarding costs.
Dr. Edward Deming (1900-1993), was born on October 14, 1900, in Sioux City Iowa USA, statesman, teacher and "founder of Total Quality" and "Father of Modern quality", learned from very small that things that are done right from the start end well.
Ignored by American corporations, he went to Japan in 1950 and taught Japanese administrators, engineers, and scientists how to produce quality. Thirty years later, after watching a documentary on NBC in June 1980, entitled, "If Japan can, why not us," corporations like Ford, General Motors and Dow Chemical, to name a few, realized and sought the advice of Deming. Author of his famous "14 Points" and "7 Deadly Sins," which he shared with some of the largest corporations in America.
- His writings are reference material for Administration books. The Quality Award named after him was created, the "Deming Prize" awarded for the first time by Japan, and known internationally.
During World War II, Deming taught American technicians and engineers statistics that could improve the quality of war materials. It was this work that attracted the attention of the Japanese. In 1950, when he was invited to Japan when his industry and economy were in crisis, they listened and changed their way of thinking, their management style, their treatment of employees and they took their time. By following Deming's philosophy, the Japanese turned their economy and productivity completely to become the world market leaders.
Deming's principles stated that through the use of statistical measurements, a company could be able to graph how a particular system was working and then develop ways to improve that system.
If Deming's principles are in place and work for your business, "quality increases, costs go down, and savings can be passed on to the consumer." Customers get quality products, companies earn higher revenues, and the economy grows.
Deming's Fourteen Points
1.-Be consistent in the purpose of improving products and services.
2.-Learn a new philosophy.
3.-Understand the purpose of inspections.
4.- Eradicate exclusively rewarding companies for their Retail Price
5.- Constantly and indefinitely improve the product and service.
6.- Implement training.
7.- Teach and implement leadership.
8.- Eliminate fear. Create trust and a climate of innovation.
9.- Break down the barriers between staff areas.
10.-Eliminate slogans, exhortations, and goals for the workforce.
11.-Eliminate numerical quotas.
12.- Break down the barriers that prevent the feeling of pride that a job well done produces.
13.-Establish a vigorous education and retraining program.
14.-Take steps to achieve transformation.
The Seven Deadly Sins
1.- Lack of constancy in the objectives.
2.- Focus on short-term benefits.
3.- Performance evaluation, merit ranking or annual performance analysis.
4.- The mobility of management, do not get involved with the process.
5.- Manage a company based solely on visible figures.
6.- Excessive costs of medical benefits.
7.- Excessive costs of guarantees, the price of poor quality translates into an increase in claims for guarantees by unsatisfied customers.
Kaoru Ishikawa, born in Tokyo Japan (1915), a graduate of the University of Tokyo, known as a world-class guru, promoted quality revolutionary ideas for much of his life, known for his Ishikawa Theory, which was low-cost manufacturing.
Considered one of the fathers of Total Quality in Japan, he pointed out: «Total Quality Control begins with education and ends with education. Quality Control education must be given to all personnel, from the president to the operators. Quality Control is a conceptual revolution in administration; therefore, the reasoning processes of all employees must be changed. To achieve this, education must be repeated over and over again. ”
Within its philosophy of quality, quality must be a management revolution. Quality control is developing, designing, manufacturing, and maintaining a quality product. Some effects are the reduction of prices, lower costs, the technique is established and improved, among others.
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