Reflections on quality costs
SUMMARY
In the following work, some reflections are made on the concept of quality cost and the scope that they present, some points of view on them, as well as the inclusion of opportunity costs as quality costs and an assessment of the possibility and the need to quantify them. Using the combination of theoretical research methods such as: analysis and synthesis and the structural systemic with some empirical methods of fundamental research, an extensive bibliographic review, group work methods in search of consensus.
Keywords: Quality costs.
Place an (X) next to the correct answer.
Quality does not cost, what costs is poor quality.___
Obtaining quality has a cost
This could be one of those questionnaire questions where opinions are
find it very divided. In reality, among quality theorists there is no consensus on the correct answer, some led by Philip Crosby defend the first option, others opt for the second. In this work an intermediate point is defended between the two apparently very opposite positions. For this, we will start from the two basic concepts that these definitions contain. Quality and Cost.
The concept of quality to be used, in order not to enter into conceptual disquisitions, will be the one proposed by ISO 8402-1994 according to which Quality is "The totality of characteristics of an entity that determine its ability to satisfy expressed or implicit needs" while For the concept of cost, two points of view will be used: economic and that of the Spanish language. Both concepts will be exposed below.
Cost: represents the minimum total monetary expenditure necessary to obtain each level of production.
Cost: Work invested to do one thing.
If an attempt were made to merge both concepts, it could be argued that quality costs are all monetary expenses, the minimum necessary, to generate all the characteristics of an entity that determine its ability to satisfy expressed or implicit needs. From the foregoing, it could be affirmed that in a company, quality costs will not be only those that are not intended to generate the characteristics of the products aimed at satisfying the needs of customers. And therefore, only those business expenses that do not have the direct or indirect objective of achieving customer satisfaction will not be quality costs.
Could you cite a company cost that does not fit into one of the above categories? Yes, so you have found a cost, not related to quality. But better value it well, because if you are not wrong, then it is the cost of an unnecessary activity. All activities that are carried out in a company on a basis of efficiency must be aimed at ensuring obtaining profits through customer satisfaction.
And if everything is simple, how is it that there are theoretical discrepancies in this regard?
The reasons for these differences respond to technological and historical issues. The conceptions on quality and its control for a long time were oriented to the achievement of the specifications, established according to the criteria of the designers, of the products. Assuming that every process has an intrinsic tendency to variability and that therefore quality costs arose for two fundamental reasons, some as negative consequences of the variability of the processes (internal and external failures) and others as measures to avoid the existence of the above (prevention and evaluation). All these expenses are a product of the entropy manifestation of the processes and can be seen as costs for the potential existence or not of poor quality.
However, today it is known that to achieve quality, it is not enough to comply with the standards established in the design, but that this will also be the result of an adequate study of the market, promotion system, distribution and sales management, the provision of a set of ancillary post-sales services that satisfy the customer. These other costs are no longer a product of poor quality, but rather expenses necessary to generate it. And consequently they would always be quality costs. Even if the possibilities of defects disappeared idyllically, the latter would continue to exist. Everything so far reasoned can be graphically illustrated in the following way.
The two previous aspects explain why not all theorists on the subject agree in their points of view, some simply look at only one edges, the best known, and others both. Another point of view related to the first position is linked to conceiving quality as an investment and not as an expense, which implies another conceptual error since, although all investment is aimed at obtaining benefits, this does not under any circumstances lead to the idea that it is not necessary to incur expenses to generate them. In fact, the idea of trying to earn without spending is totally utopian.
Opportunity costs.
Life is full of choices as resources are scarce, we must constantly decide what to do with the limited time and money that we have. You have to go to the movies or read a book, start working at 18, or enroll in college. In all cases, making a decision in a world of scarcity means giving up something else, which actually costs us the opportunity to do something else. That option that is given up is called the opportunity cost.
The generation of quality also contains an opportunity cost. When a company hesitates to apply a new idea aimed at customer satisfaction, and it turns out to be an effective idea, it will have lost the opportunity to earn money. the opportunity to have loyal customers knowing that the cost of acquiring new customers is five times higher than that of keeping a customer.
The opportunity cost at present, due to how difficult it is to quantify, is not a cost that entities pay much attention to as a quality cost, but the fact that it is not considered low at all cannot imply that it does not exist.
Quantification of costs.
This turns out to be another issue on which different points of view may arise, one in favor of the total measurement of all aspects to ensure perfect knowledge, the other alluding to how difficult it is to measure various social and natural phenomena. To illustrate these positions, two arguments were chosen, each one faithful representative of one of these currents.
“I usually say that when you can measure what you are talking about and express it in numbers, you know something about it, but our knowledge is deficient and unsatisfactory, while we are not able to express it in numbers, we can be at the beginning, but our concepts would hardly have advanced on the path of science, and this whatever the subject matter. ”.
Lord Kelvin
The quantification of quality costs moves somewhere between both positions. Sometimes it is difficult to establish how much a product costs, how much it costs from the point of view of opportunity to have it, or to have lost the opportunity to cause a good image in customers, but this degree of difficulty under no circumstances It may imply giving up the attempt to produce an approach to the cost of quality, achieving quantification of this is the only way to convince ourselves of knowing in figures how much we must and can improve.
BIBLIOGRAPHY.
one.. Samuelson, Samuel. Economy. (fourth edition. S / A), 2. The Third Culture.
3. Little Larousse illustrated.
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