To Study Quality Management System for Reduction of Quality Cost

 

Dr. Vinod N. Sayankar

Director, Sankalp Business School, Vadgaon ( Bk) Ambegaon (Bk) Pune - 41

*Corresponding Author E-mail: vn_sayankar@yahoo.com

 

ABSTRACT:

Today’s challenge for business is to produce quality products in an organized and capable way. Quality is one of the four key objectives in operations management along with cost and delivery of goods. Quality goods can provide an organization with competitive edge. Good quality can reduces costs due to rework, scrap and product or shipment returns. Quality goods increases productivity and hence profits, other measures of progress such as brand image and product image. The total cost of quality can be minimized by observing the relationship between cost of quality and degree of conformance to customer requirements. Reduction in cost of quality can give the organization tangible and intangible benefits.

 

KEY WORDS: Good quality, productivity, delivery of goods, cost of quality.

 

 


INTRODUCTION:

Organizations globally are growing increasingly aware of the competitive potential of quality. Quality in business, engineering and manufacturing has a practical interpretation as the non-conformity or conformity of something. Production department might measure the conformance quality, or degree to which the product was produced correctly. In the present economic and political climate even high standards are demanded for getting quality products. Adoption of atomization in manufacturing processes organizations are benefited for producing quality products.

 

There are five aspects of quality in a business context:

1.      Production  - producing something

2.      Checking - confirming that something has been done correctly

3.      Quality Control - controlling a process to ensure that the results are predictable

4.      Quality Management – directing an organisation so that it optimises its performance through analysis and improvement

5.      Quality Assurance – obtaining confidence that a product  will be satisfactory

 

Managing quality is fundamental to any activity and having a clear understanding of the five aspects, measuring performance and taking action to improve is essential for survival and growth to an organizations. The common element of the business definitions is quite that 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.

 

Evolution of Quality Management:

In the early 1900s , F. W. Taylor , the ‘Father of Scientific Management’ emphasised on quality by including product inspection and gauging in his list of fundamental areas of manufacturing management.  In 1924, W. Shewhart introduced statistical control charts to monitor production. Around 1930, H.F. Dodge and H.G. Roming introduced tables for acceptance sampling. In the mid 1950s, Armand Fiegen Baum Proposed total quality control which enlarged the focus of quality control from manufacturing to include product design and incoming raw material.

 

The business meanings of quality have developed over time. Some important interpretations are given below:

1.      American Society for Quality :In technical usage, quality can have two meanings:

a.     The characteristics of a product or service that bear on its ability to satisfy stated or implied needs;

b.     A product or service free of deficiencies

 

2.      W. Edwards Deming: Concentrating on "the efficient production of the quality that the market expects, and he linked quality and management: "Costs go down and productivity goes up as improvement of quality is accomplished by better management of design, engineering, testing and by improvement of processes.

3.      Peter Drucker: Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.

 

Manufacturing:

According to Deming, understanding customers and suppliers was crucial to planning for quality. He advocated continues improvement of both products and production processes through better understanding of customer requirements which is the key to capturing world market. In the manufacturing industry it is commonly stated that “Quality drives productivity”.  Improvement in productivity is a source of greater revenues. However, this has not been the case historically, and in the early 19th century it was recognized that some markets, such as those in Asia, preferred cheaper products to those of quality. Inspection, which is what, quality insurance usually means, is historical, since the work is done. The best way to think about quality is in process control. If the process is under control, it might not necessary of inspection in the process cycle.When modern quality techniques are applied correctly to business, engineering, manufacturing or assembly processes, quality of products gets improved. These in fact improve customer satisfaction, generation of lower defects/errors and lead time.  So modern quality has the characteristic that it creates and-based benefits.

 

Customers:

One view of quality is that it is defined entirely by the customer or end user, and is based upon that person's evaluation of his or her entire customer experience. The customer experience is defined as the aggregate of all the interactions that customers have with the company's products and services. For example, any time one buys a product, one forms an impression based on how it was sold, how it was delivered, how it performed, how well it was supported etc.

 

Quality control:

It is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects

1.      Elements such as controls, job management, defined and well managed processes, performance and integrity criteria, and identification of records

2.      Competence, such as knowledge, skills, experience, and qualifications

3.      Soft elements, such as personnel, integrity, confidence, organizational culture, motivation, team spirit, and quality relationships.

 

 

Quality control emphasizes testing of products to uncover defects and reporting to management who make the decision to allow or deny product release, whereas quality assurance attempts to improve and stabilize production to avoid, or at least minimize, issues which led to the defects in the first place. Total quality control", also called total quality management, is an approach that extends beyond ordinary statistical quality control techniques and quality improvement methods. It implies a complete overview and re-evaluation of the specification of a product, rather than just considering a more limited set of changeable features within an existing product. If the original specification does not reflect the correct quality requirements, quality cannot be inspected or manufactured into the product. Total Quality Management (TQM) refers to management methods used to enhance quality and productivity in business organizations. TQM is a comprehensive management approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and customers.

 

Quality Management System:

Quality management is cross-functional in nature and involves the entire organization. The vital factor of a quality organization is the concept of the customer and supplier working together for their mutual benefit. A Quality Management System can be defined as:

 

“A set of co-ordinate activities to direct and control an organization in order to continually improve the effectiveness and efficiency of its performance.”   

 

A Quality Management System enables an organization to achieve the goals and objectives set out in its policy and strategy. It provides consistency and satisfaction in terms of methods, materials, equipment, etc, and interacts with all activities of the organization, beginning with the identification of customer requirements and ending with their satisfaction, at every transaction interface.

A good Quality Management System will:

1.     Meet customers’ expectations

2.     Involvement of staff

3.     Improve process control

4.     Reduction in waste

5.     Increase market share

6.     Facilitate training

7.     Raise morale

 

Cost of Quality:

These are certain costs which are associated with product and service quality. Some costs are associated with preventing poor quality and some costs occur after poor quality occurs. Most experts on the costs of poor quality estimate looses in the range of 20 to 30 percent of gross sales for defective or unsatisfactory products.  Four major categories of costs associated with quality management are:

 

a.     Prevention costs:  These costs are associated with preventing defects before it occurs. These costs can be reduced by - Quality planning, Product review, Training to the employees , Collecting data of quality , Data Analysis , charting of  quality performance and taking quality improvement projects.

b.     Appraisal costs: These costs are incurred in assessing the level of quality .These costs can be reduced by - Incoming material inspection, Process inspection, Final goods inspection, Establishing quality laboratories   

c.     Costs of internal failure:  These are the results from defects that are observed  during processing . These costs can be reduced by – Monitoring rework, minimizing retesting  and reducing waiting time.

d.    Costs of external failure :  These costs are those when a defect is observed  after the delivery of goods at their point.These costs can be reduced by – Market complaint analysis , controling returned goods

 

RESULTS:

Analysis 1: Awareness about problem/ defect occurrences:

The data was obtained from production department employees about the awareness about problem observed/occurred during the processing of material. The data was analyzed and tabulated as follows.

 

Opinion

Total

Yes

100.00 %

No

0.00 %

 

 

The graphical presentation of data analysis is given below.

 

 

From the above analysis it was observed that –

1. 100.00 % respondents of production department were said that training is needed about problem / defect generation.

 

2. 0.00 % respondents of production department were said that training is needed for non-occurrence of defects and problems.

From the observations 1 to 2, it was interpreted that awareness through training is needed for understanding the problem and prevention of defect generation.

 

Analysis 2: Collections for data of investigation/ trend analysis:

The data was obtained from quality control and production department employees about the need for collections of data of investigation and trend analysis for reducing the cost of quality.

 

The data was analyzed and tabulated as follows.

Opinion

Total

Yes

100.00 %

No

0.00 %

 

The graphical presentation of data analysis is given below.

 

 

From the above analysis it was observed that –

1. 100.00 % respondents of production and quality control department were said that collections of data of investigation and trend analysis for reducing the cost of quality are needed.

 

2. 0.00 % respondent of production and quality control department were said that collections of data of investigation and trend analysis for reducing the cost of quality is needed

 

From the observations 1 to 2, it was interpreted that need of collections of data of investigation and trend analysis is essential for reduction in cost of quality.

 

Analysis 3: Reporting of quality performance to manufacturing departments:

The data was obtained from employees of manufacturing and quality control department about requirement of quality performance report of manufactured products .The data was analyzed and tabulated as follows.

 

Opinion

Total

Yes

100.00 %

No

0.00 %

The graphical presentation of data analysis is given below.

 

 

From the above analysis it was observed that –

1. 100.00 % respondents of manufacturing and quality control department were said quality performance reports are needed.

 

2. 0.00 % respondents of manufacturing and quality control department were said that quality performance reports are needed.

 

From the observations 1 to 2, it was interpreted that requirement of reporting of quality performance to manufacturing is needed for action for improving quality of product.

 

DISCUSSION:

The success of any organization depends on the performance of the workers at the lower levels of the organizational structure. Systems and methods for achieving excellence have to create through initiation and support of management. The total cost of quality can be minimized by observing the relationship between cost of quality and the degree of conformance to customer requirements. The cost of quality can be a powerful tool for quality improvement if properly used. Initiation is required in understanding requirement of customer. Proper planning is necessary for training to the employees about occurrences of problem and defect generation during the manufacturing processes. Investigation data of quality problems based on factual information will help in finding the reasons of quality problems. Reporting of quality performance to the manufacturing department helps in taking action for rectifying problems. Applying proper methods will reduce the cost of quality and improve the profitability to the organization. 

 

REFERENCE:

Total Quality Management by K Shridhara Bhat, Himalaya Publishing House

http://en.wikipedia.org/wiki/Quality_control#Total_quality_control

http://en.wikipedia.org/wiki/Quality_costs#Definitions  

http://en.wikipedia.org/wiki/Cost_of_poor_quality

http://www.businessballs.com/dtiresources/quality_management_systems_QMS.pdf       

 

 

 

Received on 15.01.2013               Modified on 20.01.2013

Accepted on 09.02.2013           © A&V Publication all right reserved

Asian J. Management 4(1): Jan.-Mar. 2013 page 36-39