Quality Assurance

Prevention costs

• Quality planning

• Training personnel

Appraisal Costs

• Process appraisal

• Final product appraisal

Failure costs

•Internal failure

•External failure

Research, design and development

Prevention costs

• Setting specifications (incl. services, materials, processes and products)

• Pre-production/ operation and prototype trials

Appraisal Costs

• Inspection equipment

- Maintenance

- Design & specifications

Failure costs

•Rework & rectification

•Downgrading of products & services

•Product or service complaints & warranty claims

Production/operations

Prevention costs

• Training - including supervisor training

• Pre-production/ operation and prototype trials

• Special handling & storage during production or operations

• Supervision of quality at all stages

Appraisal Costs

• Line or process inspection (by production/operations personnel)

• Finished product inspection or service checking (by production/operations personnel)

Failure costs

•Full cost of scrap or wasted effort

•Rework & rectification

•Replacement of rejected product or repeating service

•Downgrading of products, materials and services

Marketing and sales

Prevention costs

• Market research

• Correct forecasts

• Setting of correct product or service specifications as per the requirement of customers

Appraisal Costs

• Analysis of degree of acceptance of goods and services

Failure costs

•Downgrading of products and services

•Customer complaints, liaison & compensation

•Warranty claims & replacements or refunds

Purchasing

Prevention costs

• Supplier evaluation

• Supplier training

Appraisal Costs

• Vendor rating

• Receiving inspection

Failure costs

•Downtime because of part shortages.

Service department

Prevention costs

• Product or service specification evaluation

• Pre-production/ operations and prototype trials

• Planning of in-process control procedures

Appraisal Costs

• Finished product or service performance evaluation

Failure costs

•Customer complaints

•Product or customer service

•Returned material investigations and repairs

Personnel

Prevention costs

• Recruitment of appropriate personnel

• Good compensation

• Competencies analysis

• Training

Appraisal Costs

• Operation of staff appraisal systems

Failure costs

•Dealing with results of poor recruitment process

•Disciplinary procedures

•Strikes/Union problems

•High employee turnover

Stores, transport and distribution

Prevention costs

• Special handling and storage

Appraisal Costs

• Receiving and checking materials bought-out items or services

• Checking and despatching finished product and/ or services

Failure costs

•Sorting of reject finished goods in stock

•Receiving and checking returned reject goods

• Checking and despatching replacement goods

Material control

Prevention costs

• Ordering correct materials

• Inventory systems

Appraisal Costs

• Checking stock levels

Failure costs

•Excess inventory

•Scrap material control

•Ordering of material or services for replacement.

Maintenance

Prevention costs

• Prototype processes and equipment

• Planning and maintenance of plant equipment and inspection equipment

Appraisal Costs

• Equipment reliability monitoring

Failure costs

•Downtime of plant & machinery

•Trouble shooting and investigation of defects

Finance

Prevention costs

• Establishment of good financial systems with proper controls in place.

• Proper assessment of customers on credit facility.

• Feasibility studies

Appraisal Costs

• Auditing accounts

• Determination of quality related costs

Failure costs

•Investigations following failure in the system

•Chasing recoveries from the customers

•Bad debts

•Losses