Quality costs

In process improvement efforts, quality costs tite or cost of quality (sometimes abbreviated CoQ or COQ[1]) is a means to quantify the total cost of quality-related efforts and deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article.[2]

Prior to its introduction, the general perception was that higher quality requires higher costs, either by buying better materials or machines or by hiring more labor.[3] Furthermore, while cost accounting had evolved to categorize financial transactions into revenues, expenses, and changes in shareholder equity, it had not attempted to categorize costs relevant to quality, which is especially important given that most people involved in manufacturing never set hands on the product.[4] By classifying quality-related entries from a company's general ledger, management and quality practitioners can evaluate investments in quality based on cost improvement and profit enhancement.[5]

  1. ^ Sower, Victor E.; Quarles, Ross; Broussard, Eric (13 February 2007). "Cost of quality usage and its relationship to quality system maturity". International Journal of Quality & Reliability Management. 24 (2): 121–140. doi:10.1108/02656710710722257.
  2. ^ Feigenbaum, Armand V. (November–December 1956), "Total Quality Control", Harvard Business Review, vol. 34, no. 6
  3. ^ Feigenbaum, Armand V. (1991), Total Quality Control (3 ed.), New York, New York: McGraw-Hill, p. 109, ISBN 978-0-07-112612-0, OCLC 71640975
  4. ^ Crosby, Philip B. (1979), Quality Is Free, New York, New York: McGraw-Hill, p. 121, ISBN 978-0-07-014512-2, OCLC 3843884
  5. ^ Arnold, Kenneth L. (1994), The Manager's Guide to ISO 9000, New York: Free Press, p. 244, ISBN 978-0-02-901035-8, OCLC 29845272, The main objective of quality cost reporting is to provide means for evaluating effectiveness and establishing the basis for internal improvement programmes.