To: Directory Quality Control
Re: Cost of Quality and Trade-Offs
The cost of quality in a manufacturing process and environment are many as you are aware. But the 3 primary costs that we should review on a more regular basis to assure we are creating the most cost effective and quality products are the following: Appraisal, Prevention and Failure, and failure costs should be looked at as internal failure and external failure.
Appraisal costs can be defined as “The cost of activities designed to ensure quality or uncover defects” (Stevenson, 2008, p.421) Trade-offs of these appraisal costs are internal costs that are incurred when we stop production of a product to check for defects in production process, material, or…show more content…
Internal failures happen for a variety of reasons, defective materials, incorrect machine settings, faulty equipment, carelessness and others. The trade-off cost for fixing these types of failures would be cost of additional production time, scrap materials and rework of inadequate products, investigation costs into the root cause of the issues as well as workers’ salaries to not only do the investigation and rework if needed, but the salaries of the employees that are not able to run the production lines to produce items. The other failure cost is External and these are failures that are discovered by the consumer once they have purchased the product. These can carry a much higher cost when found by the consumers. These costs can include Warranty repairs or replacements, costs of having a customer care center or call center to deal with customer complaints, discounts to customers for current or future products and Legal action if the failure of a product caused some type of personal injury.
Based on the 3 types of quality costs that have been discussed and reviewed above, I recommend that we look at doing more appraisals and inspections during the manufacturing process, this will limit the number of design changes that happen early in the process but it should help in cutting down our external failure costs and help limit