All out Quality Management

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Comprehend Quality Costs. Comprehend quality expenses empowers you toUnderstand concealed costsReduce and kill pointless costPrevent issues from happeningManagement obligation to empower thisQuality expenses are genuine and assessed at:25% of expenses in manufacturing35% of expenses in administration industryQuality expenses can be arranged to empower better comprehension.

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Add up to Quality Management Week # 7 Cost of Quality Prepared by: Khalid Dahleez Faculty of Commerce – the Islamic University of Gaza This material was gathered from various sources Total Quality Management - Spring 2010 - IUG

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Understand Quality Costs Understand quality expenses empowers you to Understand shrouded costs Reduce and take out superfluous cost Prevent issues from happening Management duty to empower this Quality expenses are genuine and evaluated at: 25% of expenses in assembling 35% of expenses in administration industry Quality expenses can be sorted to empower better comprehension Total Quality Management - Spring 2010 - IUG

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Why ascertain Quality Cost Management will give extraordinary consideration when quality is measured in fiscal terms Quality costing is one of the devices to give starting appraisals and hard confirmation that change is required or had been made To screen the viability of value change activities To be utilized as a part of a bland term by senior administration, shareholders and monetary establishments, so they can promptly comprehend ramifications of value in the term of cash Cost of value disappointment is computed as a rate of benefit or yearly turnover It is straightforward By forefront administrator By center administration Total Quality Management - Spring 2010 - IUG

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Benefits of utilizing quality costing Greater exactness in the assessment and guaging of asset utilize Justification for interest in the counteractive action and examination of disappointments Ability to cost and look at execution over all offices capacities and exercises Identification and prioritization of exercises, procedures and offices regarding remedial activity, venture, or quality change activities Total Quality Management - Spring 2010 - IUG

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Benefits of utilizing quality costing (2) Ability to set cost-diminishment targets and afterward to quantify and report advance Ability to deliver "neighborhood" information which enhances comprehension of asset usage destinations and focuses at all levels all through the organization Provision of information to bolster formal quality administration framework (counting, particularly; those based upon the ISO9000) Enable choices about quality to be made in a goal and precise way Promoting TQM and an all inclusive quality change culture Total Quality Management - Spring 2010 - IUG

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COST OF Quality expenses are characterized as costs related with non-accomplishment of item/administration quality. In basic terms, quality cost is the cost of poor items/administrations . The cost of low quality can add to different costs, for example, plan, generation, upkeep, investigation, deals, and so forth. Quality costs cross division limits by including all exercises of the association – promoting, obtaining, plan, fabricating, benefit, and so forth . The cost of nonconformance (Philip Crosby) or the cost of low quality (Joseph Juran ), the term 'Cost of Quality', alludes to the expenses related with giving low quality item or administration. Add up to Quality Management - Spring 2010 - IUG

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Founders Point of View Phillip B. Crosby ( Quality is free . . . ) : The framework for creating quality is anticipation, not evaluation – Quality is Free The execution standard must be Zero Defects, not "that's nearby enough" The estimation of value is the Price of Non-conformance. Cost of value is just the measure of operational execution "Quality is free. It's not a blessing, but rather it is free. What costs cash are the unquality things - every one of the activities that include not doing tasks right the first run through." Total Quality Management - Spring 2010 - IUG

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Total Quality Management (TQM) Customers will search out the most noteworthy quality item. Enhanced quality that surpasses client desires will produce more incomes that surpass the cost of value. In this manner, quality is "free". Add up to Quality Management - Spring 2010 - IUG

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Total Quality Management (TQM) W. Edwards Deming suggested that enhancing quality lessens cost and enhances gainfulness. Quality can be and ought to be enhanced constantly. Incomes Max Profit Cost Max Quality Total Quality Management - Spring 2010 - IUG

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Max Profit Return on Quality (ROQ) The ideal quality level is constantly accomplished before greatest achievable benefit is come to. Benefit is boosted at the ideal quality level . Fetched Revenues Optimum Quality Total Quality Management - Spring 2010 - IUG

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Founders Point of View Feigenbaum ( Originator of 'Aggregate Quality' idea) Definition of Quality costs (1956) Appraisal costs Prevention costs Failure costs Total Quality Management - Spring 2010 - IUG

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Cost of Quality Cost of Achieving Good Quality Prevention costs brought about amid item outline Appraisal costs expenses of measuring, testing, and breaking down Cost of Poor Quality Internal disappointment costs incorporate piece, modify, prepare disappointment, downtime, and cost diminishments External disappointment costs incorporate objections, returns, guarantee cases, risk, and lost deals Total Quality Management - Spring 2010 - IUG

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Prevention Costs Quality arranging costs expenses of creating and actualizing quality administration program Product-plan costs expenses of planning items with quality attributes Process costs used to ensure profitable process complies with quality details Training costs expenses of creating and putting on quality preparing programs for representatives and administration Information costs expenses of getting and keeping up information identified with quality, and advancement of reports on quality execution Total Quality Management - Spring 2010 - IUG

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Examples of counteractive action Cost Application screening Capability concentrates Controlled stockpiling Design audit Equipment support & repair Field testing Fixture plan and manufacture Forecasting Housekeeping Job portrayals Market examination Pilot ventures Procedure composing Prototype testing Procedure surveys Quality motivating forces Safety audits Time and movement thinks about Survey Quality preparing businessperson assessment and choice Personnel audits Total Quality Management - Spring 2010 - IUG

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Appraisal Costs Inspection and testing expenses of testing and examining materials, parts, and item at different stages and toward the finish of a procedure Test hardware costs expenses of keeping up gear utilized as a part of testing quality qualities of items Operator costs expenses of time spent by administrators to assemble information for testing item quality, to make hardware acclimations to look after quality, and to stop work to evaluate quality Total Quality Management - Spring 2010 - IUG

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Examples of evaluation cost Audit Document checking Diagram checking Equipment adjustment Final examination In-process assessment Laboratory test Personnel testing Procedure testing Prototype examination Receiving review Shipping investigation Total Quality Management - Spring 2010 - IUG

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Internal Failure Costs Scrap costs expenses of low quality items that must be disposed of, including work, material, and backhanded costs Rework costs expenses of settling inadequate items to fit in with quality particulars Process disappointment costs expenses of deciding why generation process is delivering low quality items Process downtime costs expenses of closing down gainful procedure to settle issue Price-minimizing costs expenses of reducing low quality items—that is, offering items as "seconds" Total Quality Management - Spring 2010 - IUG

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External Failure Costs Customer protestation costs expenses of researching and palatably reacting to a client grumbling coming about because of a low quality item Product return costs expenses of taking care of and supplanting low quality items returned by client Warranty claims costs expenses of consenting to item guarantees Product obligation costs case costs coming about because of item risk and client harm Lost deals costs acquired on the grounds that clients are disappointed with low quality items and don't make extra buys Total Quality Management - Spring 2010 - IUG

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Defects , Scrap , Rework , Inspection , Returns , Warranty , Quality Assurance Prevention Design Review, Zero Defects Program, Supplier Training, Supplier Evaluation, Specification Review, Quality Audits, Preventive Maintenance, Engineering Changes, Product Liability, Increased Overhead Appraisal Vendor Surveillance, Receiving Inspection, Product Acceptance, Process Control, Inspection Labor, Quality Control Labor, Testing Equipment Costs Internal Failure Downtime, Engineering Changes, Excess Inventory, Disposal Costs, Reinsertion External Failure Consumer Affairs, Purchase Changes, Service after Sales, Product Liability, Lost Market Share Delivery Delay Total Quality Management - Spring 2010 - IUG

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Classifying Quality Costs Total Quality Management - Spring 2010 - IUG

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Total Quality Management - Spring 2010 - IUG

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Prevention Costs Appraisal Costs Benefit $ Repair Costs Prevention Costs Failure Costs Internal External Appraisal Costs Repair Costs Failure Costs Before Quality Cost Alignment After Quality Cost Alignment Preventing Poor Quality (Comparison) Total Quality Management - Spring 2010 - IUG

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Cost of Quality ( other rendition) 1. Like all things there is a cost to pay for quality. This aggregate cost can be part into two principal regions: a. Non Conformance . This range covers the cost paid by not having quality frameworks or a quality item. Cases of this are: (1) Rework. Doing the employment over again on the grounds that it wasn't right the first run through. (2) Scrap. Discarding the consequences of your work since it is not up to the required standard. (3) Waiting. Time squandered while sitting tight for other individuals. (4) Down Time. Not having the capacity to d