Abstract: Quality c o s t s pl ay s vi tal rol e in improving productivity. These costs are typically
categorized into costs of prevention, appraisal, internal and external failure. Like other activities of
business, quality costs can be programmed, budgeted, measured and analyzed to attain the objective of
better quality at lower cost. Quality costs is the basis by which investments in quality programs may be
evaluated in terms of cost improvement , profit enhancement and other benefits for plants and companies
from these programs. The cost of quality is an increasingly important issue in the debates over quality.
There was a mistaken notion that achievement of better quality requires higher costs. It was the myth that
prevented many Indian companies to invest more on quality cost related programs. In this article the
authors made an attempt to identify the different types of quality costs in a medium scale industry because
the small and medium scale industries pay very little attention towards finding and developing a system for
knowing & optimizing the cost of achieving quality. A model is proposed to identify the different quality
costs in a medium scale industry and is further implemented. It has been found some quality costs are more critical and require greater attention.
Key words: Quality costs, Quality management, Pareto analysis, Model for optimization
Roles of TQM and BPR in organizational change strategies- Case StudyAditya Deshpande
here TQM and BPR are explained and case study is given showing their role in organizational strategies.
Results of case study are also discussed.
Do like, Share and Comment.
Aditya Deshpande
deshadi805@gmail.com
Gscm strategies, in manufacturing ind.Karim Khayat
It has been increasing in consciousness of the environment in the last few decades. More people are aware of the world’s environmental problems such as global warming, toxic substance usage, and decreasing in non-replenish resources . In addition awareness exists among companies which seek to become green.
This study presents the various strategies to implement a GSCM in manufacturing industry. It focuses on the use of decision making models; the model used here is AHP. This method is used in such a way that helps in evaluating different criterion under each strategy, and therefore deciding about best strategy needed.
Total Quality Management (TQM) Practices toward Product Quality Performance: ...IOSRJBM
The purpose of this research was to test and analyze the effect of TQM practices impelementation which consists of leadership, strategic planning, customer focus, information and analysis, people management, and process management to product quality performance. The population were 108 food and beverage companies in Makassar, Indonesia. Respondents are production managers or operation managers. Sample technique which used is population sampling. Method of analysis which use both descriptive statistic and Structural Equation Modelling (SEM). Data processing uses two statistic tools i.e: IBM SPSS and AMOS 19.00. The findings of research indicate that leadership has significant effect on product quality performance, strategic planning has significant effect on product quality performance, customer focus has significant effect on product quality performance, information and analysis has significant effect on product quality performance, people management has significant effect on product quality performance, and process management has significant effect on product quality performance. Leadership factor has dominant effect on product quality performance (critical ratio = 9.760 > t-table = 1.960; and probability = 0.000 < α = 0.05).
Roles of TQM and BPR in organizational change strategies- Case StudyAditya Deshpande
here TQM and BPR are explained and case study is given showing their role in organizational strategies.
Results of case study are also discussed.
Do like, Share and Comment.
Aditya Deshpande
deshadi805@gmail.com
Gscm strategies, in manufacturing ind.Karim Khayat
It has been increasing in consciousness of the environment in the last few decades. More people are aware of the world’s environmental problems such as global warming, toxic substance usage, and decreasing in non-replenish resources . In addition awareness exists among companies which seek to become green.
This study presents the various strategies to implement a GSCM in manufacturing industry. It focuses on the use of decision making models; the model used here is AHP. This method is used in such a way that helps in evaluating different criterion under each strategy, and therefore deciding about best strategy needed.
Total Quality Management (TQM) Practices toward Product Quality Performance: ...IOSRJBM
The purpose of this research was to test and analyze the effect of TQM practices impelementation which consists of leadership, strategic planning, customer focus, information and analysis, people management, and process management to product quality performance. The population were 108 food and beverage companies in Makassar, Indonesia. Respondents are production managers or operation managers. Sample technique which used is population sampling. Method of analysis which use both descriptive statistic and Structural Equation Modelling (SEM). Data processing uses two statistic tools i.e: IBM SPSS and AMOS 19.00. The findings of research indicate that leadership has significant effect on product quality performance, strategic planning has significant effect on product quality performance, customer focus has significant effect on product quality performance, information and analysis has significant effect on product quality performance, people management has significant effect on product quality performance, and process management has significant effect on product quality performance. Leadership factor has dominant effect on product quality performance (critical ratio = 9.760 > t-table = 1.960; and probability = 0.000 < α = 0.05).
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
An Application of DMAIC Methodology for Increasing the Yarn Quality in Textil...IOSR Journals
Abstract : This article presents a quality improvement study applied at a yarn manufacturing company based
on six sigma methodologies. More specifically, the DMAIC (Define, Measure, Analyze, Improve, and Control)
project management-methodology & various tools are utilized to streamline processes & enhance productivity.
Defects rate of textile product in the yarn manufacturing process is so important in industry point of view. It
plays a very important rate for the improvement of yield & financial conditions of any company. Actually
defects rate causes a direct effect on the profit margin of the product & decrease the quality cost during the
manufacturing of the product. By checking & inspection of defects of product at different point in production
where more defects are likely to happen. A thousand defects opportunities create in the final package of yarn.
That’s why it is decided to do work & implement DMAIC methodology in winding departments where the final
package of yarn is make.
Keywords - Six Sigma; DMAIC; Lean manufacturing; Yarn manufacturing
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
An Application of DMAIC Methodology for Increasing the Yarn Quality in Textil...IOSR Journals
Abstract : This article presents a quality improvement study applied at a yarn manufacturing company based
on six sigma methodologies. More specifically, the DMAIC (Define, Measure, Analyze, Improve, and Control)
project management-methodology & various tools are utilized to streamline processes & enhance productivity.
Defects rate of textile product in the yarn manufacturing process is so important in industry point of view. It
plays a very important rate for the improvement of yield & financial conditions of any company. Actually
defects rate causes a direct effect on the profit margin of the product & decrease the quality cost during the
manufacturing of the product. By checking & inspection of defects of product at different point in production
where more defects are likely to happen. A thousand defects opportunities create in the final package of yarn.
That’s why it is decided to do work & implement DMAIC methodology in winding departments where the final
package of yarn is make.
Keywords - Six Sigma; DMAIC; Lean manufacturing; Yarn manufacturing
Evaluations of the Effect of Workshop/Laboratory Accidents and Precautionary ...IOSR Journals
A good number of scientist, engineers, laboratory or workshop users have lost their lives and the
lives of others due to accidents in the workshop caused by ignorance, neglect or carelessness. This paper focus
on the incident and prevalence rate of workshop and laboratory accidents in twenty (20) schools within Cross
River State, Nigeria. The investigation took place between January 2008 and December 2012 (a period of five
years). A total of 66 departments were investigated. The data was source with the help of the technologist and
head of Department of each of the schools. Based on these data, using descriptive analysis, multiple bar chart
and Trend analysis (Analysis of variance-SPSS) to show the growth and decline of laboratory or workshop
accidents across various departments over the years of study. The result revealed that the average number of
accidents occurred most in chemistry department; UNICAL and CRUTECH at 25 and 18 respectively, (table 1
and 2). And that of 18 secondary schools indicated that Bekwara Local Government Area was the highest
numbers of accidents (20.0) table 3, while Biase Local Government Area had the least (10.2), physics and
biology had recorded less accidents (table 3). In the two universities, computer/Maths statistic Department had
less laboratory accident due to not being exposed to heavy chemical. Hence, from this result, 40 workshop
safety and precautionary steps are release to avoid or minimize accidents in the laboratory or workshop towards
a healthy carrier.
Design, Implementation and Control of a Humanoid Robot for Obstacle Avoidance...IOSR Journals
Abstract: In this paper, the design, implementation and control of a humanoid robot, which enables humanlike
walk and a path planning of humanoid robot for obstacle avoidance by using infrared sensors (IRs) is
proposed. As the focus is to obtain human-like walk, the robot is designed to resemble human proportions.
Based on the obtained information from IR sensors, a software flow proposed to decide the behaviour of robot
so that the robot avoids obstacles and goes to the destination. Furthermore the hardware and software
necessary to obtain a fully autonomous system is developed and implemented. Human-like walk was not
obtained on the real system, due to system limitations. If a new interface to the DC-motors in the servos was
developed, and a faster on-board computer was chosen, human-like walk should be possible.
Keywords- Humanoid robot, Autonomous mobile robot, Obstacle avoidance, IR sensors, servo motors, 8051
Micro controller.
IJRET : International Journal of Research in Engineering and Technology is an international peer reviewed, online journal published by eSAT Publishing House for the enhancement of research in various disciplines of Engineering and Technology. The aim and scope of the journal is to provide an academic medium and an important reference for the advancement and dissemination of research results that support high-level learning, teaching and research in the fields of Engineering and Technology. We bring together Scientists, Academician, Field Engineers, Scholars and Students of related fields of Engineering and Technology
Impact of Cost of Quality on Total Quality Management in Garment Industryijtsrd
There is a very much need to take a new perspective to gain a competitive advantage in this modern era of consistently increasing of competition. This has accommodated to implement quality management in RMG Ready made garment Sector. As it has much importance in maximizing the productivity and minimizing the cost of operation. But it requires spending huge cost expenses which doesn't guarantee a desired outcome. This study is taken up with the intention to evaluate the extent how cost spend on quality is advantageous to organization. To perform this study we have used some data analysis tools to analyze the collected data which were collected through survey method and discovered that evaluation of cost of poor quality will help to implement appropriate quality policy which minimize the cost and helps to reach the standard of the customer. Prof. Lakshminarayana. N | Kusuma. P ""Impact of Cost of Quality on Total Quality Management in Garment Industry"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-4 , June 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23857.pdf
Paper URL: https://www.ijtsrd.com/management/strategic-management/23857/impact-of-cost-of-quality-on-total-quality-management-in-garment-industry/prof-lakshminarayana-n
There is an increasing trend in competition on the global market and this has compelled many manufacturing and service companies to revise their understanding of quality. Customers today make informed choices and patronize products and services based on their quality. There are also regulations which are established by government agencies to ensure that products and services are of expected quality that satisfies the needs of the customer. This demand from customers has triggered a need for manufacturing companies to always provide quality products to stay in competition. Provision of quality products has a cost element attached to it. The study was a case study and focused on the assessment of cost of quality and its effect on manufacturing performance. There have been several researches that have shown the relevance of cost of quality assessment in a manufacturing firm. This research looks at cost of quality with specific emphasis on the classical P-A-F (Prevention-Appraisal-Failure) cost model and tries to ascertain its effects on manufacturing performance. The study focused on Special Ice Company Limited as a case study. The study employed three categories namely, cost of prevention, cost of appraisal and cost of failure as a proxy for cost of quality on the manufacturing performance. A sample of 80 participants was randomly selected for this study. Primary data was collected and analyzed. The findings show that the cost of quality element like cost of external failure and cost of appraisal had a statistically significant impact on the manufacturing performance of the company. A semi-structured interview was also conducted with the Manager Director to further understand the posturing of the top management with regards to the study. The study recommended that the organization make a conscious effort to sensitize employees to understand the cost of quality and its implications on the manufacturing performance of the company and also appraise their production processes at all times and ensure their entire staff adhere to accepted procedures. Again, the study also recommended that top management get actively involved and make a conscious effort to incorporate the cost of quality in their decision-making process and get all staff to align and adhere to it and also pay close attention to customer complaints act on it to improve on the products.
The objective of this study is to examine the effect of cost reduction techniques on profitability of manufacturing firms.
To achieve this objective, the study adopted survey design. Data were collected from the primary source. A total of
120 copies of questionnaire were administered out of which only 100were retrieved. The returned copies of
questionnaire were utilized in the data analysis of the study. Simple regression model was established and the
findings of the study indicate that there is a significant relationship between cost reduction techniques and
organizational profitability. The study concludes that the application of cost reduction techniques has improved
organizational profitability. Based on this, the study recommended that company should employ linear programming
(LP) techniques so that there would be timely purchase of raw material and component to meet production and sales
requirement. With the above recommendation, the company can achieve its goal of being ‘Low cost management’
LearningObjectivesAfter studying Chapter 12, you will be .docxcroysierkathey
LearningObjectives
After studying Chapter 12, you will be able to:
Explain relationships among the costs of quality categories.
Understand the concepts of target costing and kaizen costing.
Distinguish between value-added and nonvalue-added activities.
Describe various types of non�inancial performance measures.
Identify non�inancial performance measures for multinational companies.
Comprehend the elements of a balanced scorecard.
Describe benchmarking techniques to improve productivity and quality.
12 Costs of Quality and Other Cost ManagementIssues
jacoblund/iStock/Thinkstock
Explain strategies to enhance productivity such as downsizing and business process
reengineering.
TQMandtheNeedtoMeasureQualityCosts
Pete Moss, considered the ace troubleshooter for DeKalb Fertilizer Company, was sent to its Georgia regional
of�ice by “Big Dan” DeLion, president of DeKalb, about 15 months ago. What he found was “big trouble.” The
region was losing about $400,000 per month—mostly from waste, low productivity, and customer warranty
claims. Revenues were declining, and too many customers were unhappy. This was Spring 2018, long after
Total Quality Management (TQM) was a cliché and a norm in most �irms. Yes, DeKalb had a TQM program that
“Big Dan” had announced in late 2019. Signs had been posted about quality being “No. 1.” A consulting �irm
had conducted seminars for workers, statistical control charts were maintained, and managers had
increased inspections. Faster response to warranty claims had been implemented through a costly system to
guarantee a 24-hour response to any customer problem.
Yet, productivity declined, scrap was up, and warranty costs soared. Workers saw the TQM program as a
management project. Managers blamed much of the problem on the lack of union cooperation and of
employee concern. No speci�ic quality goals were set. Everyone lacked a sense of urgency. Pete’s arrival
brought a sudden change: meetings with line workers quickly pointed to key production problems, warranty
claims were grouped to identify failure causes, landscape designers and on-site supervisors were brought
together to analyze failures, and certain changes were made “overnight.” A goal of cutting scrap by 50% in
three months was set.
At every step, the same question came up: “What’s this costing us?” Pete, knowing that this question was key
at other plants, sought out Rose Bush, the plant cost accountant. Rose was in the middle of an ABC study and
had begun to de�ine new activity centers and cost drivers. While not an easy task, Rose was able to modify
her system rather quickly to identify quality costs: which, where, and how much. Pete and Rose became allies,
promoting each other’s views to managers and employees alike. Within two months, Rose gave Pete a 2019
costs of quality analysis. These costs totaled a surprising 15% of revenues. Of this, little was spent on
prevention, about 30% was spent on appraisal, nearly 45% went to �ixing internal fai ...
Research Inventy : International Journal of Engineering and Science is published by the group of young academic and industrial researchers with 12 Issues per year. It is an online as well as print version open access journal that provides rapid publication (monthly) of articles in all areas of the subject such as: civil, mechanical, chemical, electronic and computer engineering as well as production and information technology. The Journal welcomes the submission of manuscripts that meet the general criteria of significance and scientific excellence. Papers will be published by rapid process within 20 days after acceptance and peer review process takes only 7 days. All articles published in Research Inventy will be peer-reviewed.
A Project Report
On
PRODUCTIVITY IMPROVEMENT THROUGH TOTAL QUALITY MANAGEMENT
Submitted in partial fulfilment of requirements
For the award of the Degree of
BACHELOR OF ENGINEERING
IN
PRODUCTION ENGINEERING
By
ABHINANDAN KUMAR
Under the guidance of
Prof. KAPIL DEV PRASAD
Department of Production Engineering
DEPARTMENT OF PRODUCTION ENGINEERING
BIRLA INSTITUTE OF TECHNOLOGY, MESRA, RACHI
2014
Courier management system project report.pdfKamal Acharya
It is now-a-days very important for the people to send or receive articles like imported furniture, electronic items, gifts, business goods and the like. People depend vastly on different transport systems which mostly use the manual way of receiving and delivering the articles. There is no way to track the articles till they are received and there is no way to let the customer know what happened in transit, once he booked some articles. In such a situation, we need a system which completely computerizes the cargo activities including time to time tracking of the articles sent. This need is fulfilled by Courier Management System software which is online software for the cargo management people that enables them to receive the goods from a source and send them to a required destination and track their status from time to time.
Welcome to WIPAC Monthly the magazine brought to you by the LinkedIn Group Water Industry Process Automation & Control.
In this month's edition, along with this month's industry news to celebrate the 13 years since the group was created we have articles including
A case study of the used of Advanced Process Control at the Wastewater Treatment works at Lleida in Spain
A look back on an article on smart wastewater networks in order to see how the industry has measured up in the interim around the adoption of Digital Transformation in the Water Industry.
Overview of the fundamental roles in Hydropower generation and the components involved in wider Electrical Engineering.
This paper presents the design and construction of hydroelectric dams from the hydrologist’s survey of the valley before construction, all aspects and involved disciplines, fluid dynamics, structural engineering, generation and mains frequency regulation to the very transmission of power through the network in the United Kingdom.
Author: Robbie Edward Sayers
Collaborators and co editors: Charlie Sims and Connor Healey.
(C) 2024 Robbie E. Sayers
Democratizing Fuzzing at Scale by Abhishek Aryaabh.arya
Presented at NUS: Fuzzing and Software Security Summer School 2024
This keynote talks about the democratization of fuzzing at scale, highlighting the collaboration between open source communities, academia, and industry to advance the field of fuzzing. It delves into the history of fuzzing, the development of scalable fuzzing platforms, and the empowerment of community-driven research. The talk will further discuss recent advancements leveraging AI/ML and offer insights into the future evolution of the fuzzing landscape.
COLLEGE BUS MANAGEMENT SYSTEM PROJECT REPORT.pdfKamal Acharya
The College Bus Management system is completely developed by Visual Basic .NET Version. The application is connect with most secured database language MS SQL Server. The application is develop by using best combination of front-end and back-end languages. The application is totally design like flat user interface. This flat user interface is more attractive user interface in 2017. The application is gives more important to the system functionality. The application is to manage the student’s details, driver’s details, bus details, bus route details, bus fees details and more. The application has only one unit for admin. The admin can manage the entire application. The admin can login into the application by using username and password of the admin. The application is develop for big and small colleges. It is more user friendly for non-computer person. Even they can easily learn how to manage the application within hours. The application is more secure by the admin. The system will give an effective output for the VB.Net and SQL Server given as input to the system. The compiled java program given as input to the system, after scanning the program will generate different reports. The application generates the report for users. The admin can view and download the report of the data. The application deliver the excel format reports. Because, excel formatted reports is very easy to understand the income and expense of the college bus. This application is mainly develop for windows operating system users. In 2017, 73% of people enterprises are using windows operating system. So the application will easily install for all the windows operating system users. The application-developed size is very low. The application consumes very low space in disk. Therefore, the user can allocate very minimum local disk space for this application.
Industrial Training at Shahjalal Fertilizer Company Limited (SFCL)MdTanvirMahtab2
This presentation is about the working procedure of Shahjalal Fertilizer Company Limited (SFCL). A Govt. owned Company of Bangladesh Chemical Industries Corporation under Ministry of Industries.
Vaccine management system project report documentation..pdfKamal Acharya
The Division of Vaccine and Immunization is facing increasing difficulty monitoring vaccines and other commodities distribution once they have been distributed from the national stores. With the introduction of new vaccines, more challenges have been anticipated with this additions posing serious threat to the already over strained vaccine supply chain system in Kenya.
Quality defects in TMT Bars, Possible causes and Potential Solutions.PrashantGoswami42
Maintaining high-quality standards in the production of TMT bars is crucial for ensuring structural integrity in construction. Addressing common defects through careful monitoring, standardized processes, and advanced technology can significantly improve the quality of TMT bars. Continuous training and adherence to quality control measures will also play a pivotal role in minimizing these defects.
Forklift Classes Overview by Intella PartsIntella Parts
Discover the different forklift classes and their specific applications. Learn how to choose the right forklift for your needs to ensure safety, efficiency, and compliance in your operations.
For more technical information, visit our website https://intellaparts.com
Hybrid optimization of pumped hydro system and solar- Engr. Abdul-Azeez.pdffxintegritypublishin
Advancements in technology unveil a myriad of electrical and electronic breakthroughs geared towards efficiently harnessing limited resources to meet human energy demands. The optimization of hybrid solar PV panels and pumped hydro energy supply systems plays a pivotal role in utilizing natural resources effectively. This initiative not only benefits humanity but also fosters environmental sustainability. The study investigated the design optimization of these hybrid systems, focusing on understanding solar radiation patterns, identifying geographical influences on solar radiation, formulating a mathematical model for system optimization, and determining the optimal configuration of PV panels and pumped hydro storage. Through a comparative analysis approach and eight weeks of data collection, the study addressed key research questions related to solar radiation patterns and optimal system design. The findings highlighted regions with heightened solar radiation levels, showcasing substantial potential for power generation and emphasizing the system's efficiency. Optimizing system design significantly boosted power generation, promoted renewable energy utilization, and enhanced energy storage capacity. The study underscored the benefits of optimizing hybrid solar PV panels and pumped hydro energy supply systems for sustainable energy usage. Optimizing the design of solar PV panels and pumped hydro energy supply systems as examined across diverse climatic conditions in a developing country, not only enhances power generation but also improves the integration of renewable energy sources and boosts energy storage capacities, particularly beneficial for less economically prosperous regions. Additionally, the study provides valuable insights for advancing energy research in economically viable areas. Recommendations included conducting site-specific assessments, utilizing advanced modeling tools, implementing regular maintenance protocols, and enhancing communication among system components.
Development of Model for Quality Costing in a Medium Scale Industry-A Case Study
1. IOSR Journal of Mechanical and Civil Engineering (IOSR-JMCE)
e-ISSN: 2278-1684,p-ISSN: 2320-334X, Volume 6, Issue 4 (May. - Jun. 2013), PP 19-23
www.iosrjournals.org
www.iosrjournals.org 19 | Page
Development of Model for Quality Costing in a Medium Scale
Industry-A Case Study
Nil Mani Sahu *1
, Dr. Sridhar *2
*1
M.Tech Scholar, Mechanical Engg. Dept Chhatrapati Sivaji Institute of Technology, Durg
*2 Professor, Mechanical Engg. Dept, Chhatrapati Sivaji Institute of Technology, Durg
Abstract: Quality c o s t s plays vital role in improving productivity. These costs are typically
categorized into costs of prevention, appraisal, internal and external failure. Like other activities of
business, quality costs can be programmed, budgeted, measured and analyzed to attain the objective of
better quality at lower cost. Quality costs is the basis by which investments in quality programs may be
evaluated in terms of cost improvement , profit enhancement and other benefits for plants and companies
from these programs. The cost of quality is an increasingly important issue in the debates over quality.
There was a mistaken notion that achievement of better quality requires higher costs. It was the myth that
prevented many Indian companies to invest more on quality cost related programs. In this article the
authors made an attempt to identify the different types of quality costs in a medium scale industry because
the small and medium scale industries pay very little attention towards finding and developing a system for
knowing & optimizing the cost of achieving quality. A model is proposed to identify the different quality
costs in a medium scale industry and is further implemented. It has been found some quality costs are more
critical and require greater attention.
Key words: Quality costs, Quality management, Pareto analysis, Model for optimization
I. INTRODUCTION
Globalization concept leads to greater competition among the manufacturers. To survive in the
globalize market, high quality is essential. Quality Costing is an important issue in the debate over quality.
Quality costs can help to quantify specific quality levels and ultimately improve
productivity.[1].Traditionally, recommendations were made to management that a choice had to be made
between quality and cost, the so called trade off decision, because better quality would someh ow cost
more and make production difficult. But experience throughout the world has shown that it is not true.
[2]. Good quality leads to increase in production and reduced quality costs and eventually to increased
sales, market penetration and hence higher profits. Improving quality can reduce overall cost [3]. Quality
costs are categorized into costs of prevention, appraisal, internal and external failure. Internal and external
failure costs are considered as part of the “ loss to society“. [10]. Determination of cost of quality
requires analysis beyond the use of standard accounting system.
A simulation analysis disclosed the impacts of rework and inventory levels and cycle times.
Cost of Quality (COQ) is considered by the management as one of the important techniques of Total Quality
Management especially when an organization changes its approach from detection to prevention as part of
its exercise towards inspection and quality control. [4]. It is suggested that Quality costs allow us to
identify the soft targets to which we can apply our improvement efforts [5]. One potentially critical facet
of an organization’s TQM is its ability to measure costs related to quality [6]. To maintain/sustain
competitive edge, streamline processes, cut down costs, ability to meet customer needs and ability to
reduce waste have been considered most important in their quality improvement journey
[7]..Relationship of quality costs is considered with the various measures of performance of the
organization such as market share.
In this article, a model for optimizing quality costing in a small scale industry is developed and an
organization is chosen. All types of quality costs are investigated and analyzed in that small scale
organization. The distribution of the different quality costs is calculated and Pareto analysis is carried out
to identify critical quality costs.
II. SUGGESTED MODEL FOR QUALITY COSTING
The small and m e d i u m s ca l e industries are facing a major problem of calculating and
optimizing quality costs. A model is developed as shown in figure 1 to help them to solve this problem.
The proposed model is explained step by step as follows:
Step-1: Identify various costs of quality & Segregate these quality costs under different quality heads i.e.
2. Development of Model for Quality Costing in a Medium Scale Industry-A Case Study
www.iosrjournals.org 20 | Page
Prevention Costs, Appraisal costs, Internal Failure Costs and External Failure Costs.
Step-2: Collect data with regard to each quality cost.
Step-3: Apply Pareto analysis on all quality costs so as to find out Critical quality costs which are
responsible for major expenses on quality related costs.
Step-4: Analyze these critical quality costs derived from Pareto analysis.
Step-5: Suggest remedial actions so as to reduce expenses on these critical quality costs in order to
improve efficiency of the organization with minimum resources.
III. CASE STUDY
3.1 PROFILE OF THE ORGANISATION
A case study is carried out at in a medium scale industry located at Nagpur. The Organization
is an ISO 9000 certified enterprise and manufactures cylinder liners for Internal Combustion engines and
supplies cylinder liners to Escorts, Swaraj Tractors, Bajaj etc. The turnover of the company is approximately
8 crores.
3.2 DATA COLLECTION
The data related to costs incurred on quality aspects was gathered from different Records/ Files/
Statements / Reports. The data in the form of costs incurred on various sub heads is described as under:
a) Prevention costs
These are the costs occurred to prevent occurrence of defects and non conformities and include the
quality expenditure to keep unsatisfactory products from coming about in the first place. The different
prevention costs found in the organization are shown in table 1.
b)Appraisal costs
Appraisal costs are associated with measuring, evaluating or auditing products, components and
purchased materials to assure conformance with quality standards and performance requirements. The
different appraisal costs found in the organization are shown in table 2.
c) Internal failure costs
Internal failure costs occur when products, components and material fail to meet quality requirements
prior to transfer of ownership. These are costs that would disappear if there were no defects in the product.
The different internal failure costs found in the organization are shown in Table 3.
d) External failure costs
External failure costs occur when product does not perform satisfactorily after transfer of ownership
to the customer. These costs would also disappear if there were no defects in the product. The different
external failure costs found in the organization are shown in table 4.
3.3 DATA ANALYSIS
The distribution of different categories is shown in figure 2. It has been found that prevention cost is
higher than the other costs and its contribution is 41%. The external failure cost was found to be 27% and
internal failure cost was 24%. The lowest quality cost is appraisal cost whose contribution is just 8%.
Hence it is very important to find out the critical quality costs among all these sub categories of the quality
costs.
3.4 PARETO ANALYSIS OF QUALITY COSTS
Critical quality costs are found with the help of Pareto analysis and are shown in figure 3. This
is based on Pareto law, which tells that there are only a few cost items or heads which are responsible for
major share in the total cost of quality [ 8 ] . This gives the indication to the management to emphasis more
on these quality costs rather than to all. This will save the money as well as the time. From Pareto
analysis, it is evident that the following categories are found to be critical and are responsible for nearly
76 % of total quality costs: a) Salaries b) Warranty claims c) Rejections d)Returned goods.
IV. CONCLUSIONS
Measuring the quality cost in a medium scale industry is very important and useful. It helps to
identify the specific quality levels and ultimately improves quality. A model was suggested to identify the
quality costs in a small- scale industry and was implemented in industry. It has been found that prevention
cost is 41% of the total quality cost, internal failure is 24 %, external failure cost is 27% and appraisal cost
is 8%. It is difficult for small-scale industries to reduce all categories of quality cost due to high cost and
more time consumption. Pareto analysis of all quality costs was carried out to identify critical quality costs.
It has been observed that cost of salaries to quality personnel, cost of rejection goods, cost of returned
goods and warranty claims are more prominent and require attention of top management. Hence, quality
3. Development of Model for Quality Costing in a Medium Scale Industry-A Case Study
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costs have an i m p or t a n t role to play in increasing the efficiency of the organization and reducing the
unfruitful expenditure to enhance profitability and to remain competitive.
ACKNOWLEDGMENT
We are very grateful for Dr. L Narayana who helped us in data collection and technical assistance for this
paper.
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4. Development of Model for Quality Costing in a Medium Scale Industry-A Case Study
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Table 1. Prevention costs
Quality Cost Category Cost (Lakhs)
Salaries 1.51
Training costs 0.034
Quality Administration 0.0365
Internal Quality Audits 0.051
Total prevention cost 1.6315
Table 2. Appraisal costs
Quality Cost Category Cost (Lakhs)
Inspection & Test Equipment 0.135
Calibration & Maintenance Costs Of Measuring
Equipment
0.055
Out Side Endorsement And Certification Charges 0.093
Inspection & Testing 0.025
Total Appraisal cost 0.308
5. Development of Model for Quality Costing in a Medium Scale Industry-A Case Study
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Table 3. Internal failure costs
Quality Cost Category Cost (Lakhs)
Rejection 0.549
Rework 0.23
Wastage Due To Faulty Castings 0.165
Total Internal Failure Cost 0.944
Table 4. External failure costs
Quality Cost Category Cost (Lakhs)
Returned Goods 0.0321
Warranty Claims 0.597
Traveling Expenses 0.124
Total External Failure Cost 1.042