HO3 - L9: Introduction to Quality and L10: Cost of Quality

Question 1

What is Quality?

Answer 1

1. Consists of those product features, which meet the needs of the customers = provide product satisfaction.
2. Freedom from deficiencies.

Question 2

What is Product features?

Answer 2

Property possessed by a product, which is intended to meet a
certain customer need.

Question 3

What is a Customer?

Answer 3

Someone who is impacted by the product.
Can be external/ internal:
E: Not members of organisation that produces the product but buy/ impacted by product in some way.
I: Fact that within companies, departments and persons supply products to eachother.

Question 4

What is design quality?

Answer 4

1. Inherent value of product in marketplace.
2. Is it right product?
3. Does it have features that customer wants?
4. Did we interpret needs of customer?

Question 5

What is Conformance quality?

Answer 5

Degree to which product design specifications are met.

Is product free from defects?
Does it meet spec?
Has it been built according to design?

Question 6

What governs overall quality eg?

Answer 6

Low design quality + high conformance quality = low perceived quality.

Question 7

How have gurus defined quality over the years?

Answer 7

Juran: Fitness for purpose or use

Deming: Quality should be aimed at the needs of the consumer past, present and future

Crosby: Conformance to requirements

Question 8

Explain Crosby philisophy?

Answer 8

1. Quality: conformance to requirements (not goodness or excellence)
2. System for achieving quality is Prevention: not appraisal (ie inspection)
3. Performance standard must have zero defects: Not that’s close enough
4. Measurement of quality: Price of non-conformance: what’s true cost of defective product?

Question 9

What are the product features and characteristics?

Answer 9

1. Technological
2. Time orientated
3. Psychological
4. Contractual
5. Ethical

1-2: engineering sector
3-5: Service industry

Question 10

Explain product feature technological.

Answer 10

Usually easy to quantify, eg: power, hardness, acidity

Question 11

Explain product feature - Time orientated.

Answer 11

Usually determined by testing, eg: reliability, maintainability

Question 12

Explain product feature - Psychological.

Answer 12

Hard to quantify, eg: beauty, status, styling

Question 13

Explain product feature - Contractual.

Answer 13

Can add value and give customer confidence in product, eg: guarantee provision, warranty

Question 14

Explain product feature - Ethical.

Answer 14

Often includes how your company is viewed by customer, eg: courtesy of sales personnel, honesty of service, reputation.

Question 15

Apply product features to car industry,

Answer 15

Technological and ethical.

Question 16

What is COQ?

Answer 16

Cost of Quality.

Can be budgeted, measured and analysed.

Question 17

What are the four main sources of cost? Explain them and give examples.

Answer 17

1. External failure costs - customer finds defect, eg: scrap, repair
2. Internal failure costs - find it before customer, eg: scrap, rework
3. Appraisal costs - checking things have gone right, eg: verification, audits
4. Prevention costs - right first things, eg: quality planning, training

Question 18

What happens when appraisal costs are increased?

Answer 18

Many of those failures that before had escaped to customer - will be discovered internally = reduce overall cost of quality.

Question 19

Why do external failures cost more than internal failures?

Answer 19

1. Transportation
2. Service team sent to site
3. Repair/ replacement
4. Loss of faith/ reputation
5. Contractual concessions
6. Paperwork

Question 20

What to keep in mind with defects?

Answer 20

1. Discovering defects internally that were before not discovered until they were external = does nothing to reduce overall number of defects.
   Extra inspection does nothing to improve, remove or prevent cause of failure.
2. Inspection can never catch all of defects (manual).
   Inspection at best is only 80% effective = never be final satisfactory answer.

Appraisal now effective as ever could be - overall reduction in total quality cost ceases and plateau is reached. Inspection itself considered expensive cost - prefer to reduce it.

Question 21

Why is inspection expensive?

Answer 21

1. NVA

2. Usually experienced - skilled personnel are promoted to inspection.

Question 22

Figure 1 - reduction of quality costs: Summarise figure 1.

Explain what happens at 1.

Answer 22

• Cost of quality is about 20% of product value.

* 15% is from external failures alone

Question 23

Figure 1 - reduction of quality costs: Summarise figure 1.

Explain 1 to 2.

Answer 23

• Inspection is increased.
• This reduces the number of external failures but the number of internal failures
increases because the total number of failures is still the same (although
internal failures are less expensive)

Question 24

Figure 1 - reduction of quality costs: Summarise figure 1.

Explain 2 to 3.

Answer 24

Inspection is as effective as its every going to be - costs level off

Question 25

Figure 1 - reduction of quality costs: Summarise figure 1.

Explain 3 to 4.

Answer 25

Prevention system is increased and both internal and external failures reduce.
Appraisal cost can also be scaled back.

Question 26

Figure 1 - reduction of quality costs: Summarise figure 1.

At 4.

Answer 26

COQ about 8%.