Cost of Quality

The term Cost of Quality is widely used in various industries. Sometimes called slightly shorter, Quality Cost. Whatever form is used, the term is often wrong interpreted. Cost of Quality is not only the cost incurred for not producing a product or service quality. Cost of Quality is cost needed to make a quality product. Cost we paid for not producing a product or service quality was called Cost of Poor Quality. Cost of Poor Quality must be paid when we spending our cost to follow-up the quality problem like:

1. 
   
   rework of finished goods


2. 
   
   re-checking or inspection of products


3. 
   
   remanufactured or tooling modifications

repetitive tasks in the service sector, for example, repeat the process of loan application, replacement of food in a restaurant, etc. In short, all expenses incurred due to the poor resulting quality for the first time you produce is part of the Cost of Poor Quality. So, what is Cost of Quality? In general, the Cost of Quality is divided into several sections, namely: Prevention Cost All costs incurred to prevent the problems of quality produced. For example the cost of reviews, cost during the APQP process, a survey of supplier capabilities, evaluate the process capability, projects to improve the quality, training and technical education. Appraisal Cost All costs associated with measuring, evaluating or auditing products or services to ensure conformance to quality standards or other requirements. For example, incoming inspection of raw materials, in-process product inspection, final product inspection, product audits, calibration of measuring instruments and machine calibration. Failure Cost (usually called Cost of Poor Quality) Costs incurred due to product or service does not fit with customer requirements or other provisions. Failure Cost is usually divided into 2, namely:

• 
  
  Internal failure cost, Ie costs incurred before the product shipped to the customer. For example, scrap, rework, reinspection, downgrade the product.


• 
  
  External failure cost, Namely the costs incurred after the delivery of products to the customer. For example, fees for handling complaints from customers, returns by customers, warranty claims, product recall that has been circulating (product recall).

Cost of Quality is the sum of all the costs above. So the cost of quality is different with the actual cost of products, which usually is considered only a component material, production costs, shipping costs and profit margins. Cost of Quality log all actions taken both to prevent problems (preventive cost), to ensure there are no problems (appraisal cost) and to follow up the existing problems (failure costs), either before it is sent to the customer or when ship to the customer. Thus, the actual cost of Quality is not equal to zero. There is always a process or an attempt to ensure product quality before being sent to the customer. So at least Appraisal Cost of Quality = Cost. Unless the company is so confident with his performance so that the checking of products was not done at all ... This understanding is often wrong interpreted or ignored by management. Usually companies only count the cost of failure cost (cost of poor quality), so if there is no defect, the Cost of Quality = zero. This does not mean wrong at all for other costs, especially preventive cost accounted for in other books heading. However, if we want to begin to list the Cost of Quality in the true sense, we must take into account all the factors above.