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The total costs of quality: What else should be contemplated?
Author(s) -
Elsen Stephan H.,
Followell Roy F.
Publication year - 1993
Publication title -
quality and reliability engineering international
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.913
H-Index - 62
eISSN - 1099-1638
pISSN - 0748-8017
DOI - 10.1002/qre.4680090307
Subject(s) - benchmarking , goodwill , quality (philosophy) , competition (biology) , market share , process (computing) , order (exchange) , industrial organization , control (management) , business , economics , operations management , marketing , operations research , risk analysis (engineering) , computer science , engineering , accounting , finance , ecology , philosophy , management , epistemology , biology , operating system
A fast changing environment during the 1980s and early 1990s combined with tougher competition from Japan and increasing customer expectations of quality kept the minimum acceptable quality standards rising, and has significantly enhanced competition world‐wide. Although quality is now perceived as one of the single most important competitive issues in the 1990s, 1 only a minority of firms report their cost of quality. 2‐4 These costs usually range from 5 to 25 % of sales turnover. 5 This paper reviews some of the literature and suggests additional major components which should be considered in addition to those in the limited P‐A‐F model. The idea of never‐ending improvement leads to proactive elements in the new proposed model. 6 These include benchmarking, process cost model, world class manufacturing, market share analysis, goodwill analysis, statistical process control and Taguchi methods. The proactive elements are less exactly measurable but significantly larger in their ultimate impact on the long term survival and success of a business. The largely reactive elements of the P‐A‐F model tend to account for past costs but ignore longer term opportunities. After only minor initial testing, 6 a new suggested model requires more extensive evaluation in order to judge its usefulness and practicability to focus on long‐run success accounting measurement.