Cost of Quality
In spite of the number of definitions available for quality much misunderstanding exists about quality. Some of the misunderstandings of quality include the following:
- An expensive process - When a quality improvement effort is proposed the most important consideration is the cost of the process. The conventional understanding is that better quality costs more; it is unwise to consider quality improvement in terms of cost control and cost cutting. But the fact is that quality does not cost, it pays. When the quality of a process is improved, the defect that results from that process is reduced. The resulting reduction of defects pays back over and over again. The payback is more than the cost.
- An expensive product - the greatest misunderstanding is the tendency to view quality in terms of prices for example a fine writing pen will cost more than a plastic pen. But prices do not confer quality, none of the definition of quality mention price. Quality is the ability to satisfy customer needs. If the customer likes to spend a lot of money, then an expensive product can be viewed as top quality. But customers generally seek the lowest price for a product that meets their needs. A not so expensive digital watch purchased from an electronic store is more accurate and easy to maintain than an expensive mechanical watch from a jewellery store.
- Time consuming - The idea that there is not much time to ensure quality could be the main reason for poor quality. There is a misunderstanding that there is never enough time to do it right, but always enough time to do it over. If the production is of poor quality it leads to rework. If poor quality products are delivered it leads to replacement, loss of customers, warranty charges and reputation loss.
Practically quality does not have costs. The cost incurred in setting up a quality process is overweighed by the benefits. The sources of cost of quality are Failure, prevention and appraisal.