Page 161 - The Handbook for Quality Management a Complete Guide to Operational Excellence
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148 I n t e g r a t e d P l a n n i n g O r g a n i z a t i o n a l A s s e s s m e n t 149
Prevention Costs
Marketing/customer/user Marketing research; customer/user perception surveys/clinics;
contract/document review
Product/service/design Design quality progress reviews; design support activities; product
development design qualification test; service design qualification; field tests
Purchasing Supplier reviews; supplier rating; purchase order tech data;
supplier quality planning
Operations (manufacturing or Operations process validation; operations quality planning
service) (including design and development of quality measurement
and control equipment); operations support quality planning;
operator quality education; operator SPC/process control
Quality administration Administrative salaries; administrative expenses; quality program
planning; quality performance reporting; quality education; quality
improvement; quality audits; other prevention costs
Appraisal Costs
Purchasing Receiving or incoming inspections and tests; measurement
equipment; qualification of supplier product; source inspection
and control programs
Operations (manufacturing or Planned operations inspections, tests, audits (including checking
service) labor; product or service quality audits; inspection and test
materials); set-up inspections and tests; special tests; process
control measurements; laboratory support; measurement
equipment (including depreciation allowances, measurement
equipment expenses, maintenance and calibration labor);
outside endorsements and certifications
External appraisal costs Field performance evaluation; special product evaluations;
evaluation of field stock and spare parts
Review of tests and inspection data Including miscellaneous quality evaluations
Internal Failure Costs
Product/service design (internal) Design corrective action; rework due to design changes; scrap
due to design changes
Purchasing Purchased material reject disposition costs; purchased material
replacement costs; supplier corrective action; rework of supplier
rejects; uncontrolled material losses
Operations (product or service) Material review and corrective action costs (including disposition
costs; troubleshooting or failure analysis costs (operations);
investigation support costs; operations corrective action);
operations rework and repair costs; re-inspection/retest costs;
extra operations; scrap costs (operations); downgraded end
product or service; internal failure labor losses
Other internal failure costs Including miscellaneous quality evaluations
External Failure Costs Complaint investigation/customer or user service; returned goods;
retrofit costs; recall costs; warranty claims; liability costs; penalties;
customer/user goodwill; lost sales; other external failure costs
Table 8.2 Cost of Quality Examples (Hagan, 1990)
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