Cost of poor quality

As well as any other parameter, the quality of a product, process or service must be correctly measured. This could be difficult, since it is based on the perfect knowledge of the technical characteristics required and the efficacy of their transmission through the productive flow.  

Quality measurement consists in evaluating how far a product is from the ideal one. To do this, it is necessary to consider the characteristics requested by the customer and then implement a method to measure them.

As important is the capability to define and measure how much poor quality can affect both the customer and the supplier.

Poor quality related costs are often hard to evaluate and mainly hidden and difficult to identify. This is clearly shown in the following figure:

Literature reports normally the following categories of Non-Quality Costs (Harrington, 1987): 
Internal failure costs (associated to defects found before delivering the product or service to the client).
External inefficiency costs (associated to defects found after delivering the product or service to the client).
Costs for evaluation (costs borne to determine the conformity to the quality requirements).
Costs for prevention (costs borne for analysis activities and to reduce the risk to produce defects).

We may also identify the following specific costs for non-quality:
Costs borne out of delivery delays. 
Costs borne out of manufacturing errors and modifications required on components to allow assembling with defective parts. 
Costs borne out of re-engineering and re-design for suppliers and customers, following the detection of non-quality in a late stage of construction.
Costs in terms of risks to safety

How can we keep Costs of Poor Quality under control? 
For this purpose it is convenient to deepen the interaction between products and manufacturing processes. An effective description of this interaction is shown in Deming’s cycle (PDCA – Plan, Do, Check, Act), suggesting to keep under strict control:
Capture of client’s needs and expectations on the quality.
Translation of agreed level of quality into characteristics controllable by the supplier.
Design of the product.
Manufacturing process.
Marketing and sales process.
After sales and customer care process.
Process of analysis and improvement of performance.

In this perspective every process must be monitored to improve its performance. The whole set of processes must also be coordinated and controlled especially at input/output interfaces.
Every characteristic must be defined and kept under control as soon as possible along its path to the customer. It is clear, therefore, that before starting the production, it is necessary to elaborate a strategy to define and organize the objectives, based on the expectation of the final user
These must be the starting point for every product or service: Customer requirements, the intended use for the product but also implicit desires which can remain unsaid. 
A fundamental point is the shift from the results obtained to technologic solutions. Capitalizing its own know-how, the supplier must include customer requirements into its own process or in the different processes involved. This stage requires in general technical specifications, procedures and instructions to comply with these requirements – these need to be shared with the Customer and approved.
For this reason, it is important that a thorough surveillance of the manufacturing process is applied during the whole path. An error at an early stage is very hard to fix afterwards and could be potentially disastrous, once the mechanical or electrical equipment are delivered to the plant.

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