Quality Engineering general introduction for undergraduates

1. Cost of Quality (CoQ)
 It is the total cost incurred to ensure that a product or service meets quality
requirements.
 It’s not just the cost of making things good—it also includes the cost of
preventing defects and the losses from poor quality.
The sum of all costs related to preventing, detecting, and addressing quality problems
CoQ
External Failure
Costs
Internal
Failure Costs
Appraisal Costs
Prevention
Costs

2. Cost of Quality (CoQ) - Types
External Failure Costs
• Costs due to defects found after
the product is delivered to the
customer.
• Examples: Warranty claims,
returns, product recalls, brand
damage, liability.
Internal Failure Costs
• Costs due to defects found
before the product reaches the
customer
• Examples: Rework, scrap, re-
inspection, process downtime.
Appraisal Costs
• Costs of measuring and
monitoring quality to ensure
conformity
• Examples: Inspection, testing,
audits, calibration of
instruments, Salary of inspector
Prevention Costs
• Money spent to avoid defects in
the first place.
• Examples: Quality training,
process design, preventive
maintenance, supplier
qualification
A company will underestimate its cost of quality if it DOES NOT conduct its CoQ audit

3. Distribution of CoQ
External Failure Costs
• Costs due to defects found after
the product is delivered to the
customer.
• Examples: Warranty claims,
returns, product recalls, brand
damage, liability.
Internal Failure Costs
• Costs due to defects found
before the product reaches the
customer
• Examples: Rework, scrap, re-
inspection, process downtime.
Appraisal Costs
• Costs of measuring and
monitoring quality to ensure
conformity
• Examples: Inspection, testing,
audits, calibration of
instruments, Salary of inspector
Prevention Costs
• Money spent to avoid defects in
the first place.
• Examples: Quality training,
process design, preventive
maintenance, supplier
qualification
50-80 %
15-40 % 5-10 %
A company will underestimate its cost of quality if it DOES NOT conduct its CoQ audit

4. CoQ (Case Study)
Tata Chemicals Limited (Soda Ash and Salt)
• Employs Quality Function Deployment (QFD) to know customer needs and track competitors.
• Launched IT-enabled knowledge management process.
• In-house business excellence training program.
• Unnati: Focuses on employees at shop floor and empowers them to take ownership of their
work continuously.
• Manthan: It’s a cost reduction program with the help of creativity of employees.
• Umang: Uses a theater to create awareness, commitment and organizational transformation.

5. Product Quality
• Design Quality: Design of a product is such that it provides all the benefit and has all the
features that customer desire.
• Conformance Quality: The design is faithfully and consistently converted into products.
Product Quality
Design Quality Conformance Quality

6. Design Quality
Design Quality
Include customers in
design team QFD
Structured method to
understand customer
needs and convert them
into final products
Prototyping
Test few units

7. Conformance Quality
Conformance
Quality
Product Design Process Design Production System