Cost of Quality Effects of Poor Quality Benefits of Better Quality

Presented By Vinod Ray Mandar Vaidya

GROUP MEMBERS
Yogendra Bhosale

Shrikant Gosavi
Vinayak Kamble Vishwanath Patil Vinod Ray Pratik Tambe

Mandar Vaidya

 QUALITY

The quality of a product or service refers to the perception of the degree to which the product or service meets the customer's expectations.

There are five aspects of quality in a business:

Producing Checking

Quality Control
Quality Management Quality Assurance

Definition of cost of Quality The cost of quality isnt the price of creating a quality product or service. Its the cost of NOT creating a quality product or service. Categories Of Cost Of Quality External Failure Cost

Internal Failure Cost

Inspection (appraisal) Cost Prevention Cost

COQ - DIAGRAM

CATEGORIZATION OF COQ

EFFECTS OF POOR QUALITY

Producing poor quality = producing waste Dissatisfied customer often cease to use or purchase products or services without waiting for corrective action by the organization. Poor quality will usually drive away future sales and reduce the market in future.

Poor quality means waste of time.

Poor quality means that business has a higher chance of failing .

EXAMPLE
After Opel, the German subsidiary of General Motors experienced severe product quality problems in the mid-1990s, its reputation status dropped from the highest to the lowest level in 1998. Jose Ignacio Lopez is believed to be at the origin of quality problems that GM faced at the early 1900s. His cost-reduction program failed with GM and had severe influence on the quality. In addition, Opel in Germany is still suffering from quality problems and a damaged image that was created in the 1990s. How long did Opel work on improving its tattered quality image? Even though independent studies of the GM brand have long attested to the premium quality it is achieving, it will probably be years before this takes hold in the minds of consumers.

BENEFITS OF BETTER QUALITY

It provides a standard measure across the organization & also inter-organization Producing good quality products is to maximize Customer Satisfaction It builds awareness of the importance of quality It identifies improvement opportunities Cost measure, it is useful at all level

CONTINUED

elimination of non-confirmation and repetitive work elimination of waste costs and reject products elimination of repairs and reworks

reduced warranty and customer support costs

process efficiency fiscal discipline

CONTINUED

Reductions in costs

Greater efficiency
Easy to apply

Early detection of faults

Adherence to specifications To determine the effect of change in process Statistical quality control ensures overall coordination