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To Study Quality Management System for Reduction of Quality Cost

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

ISSN- 0976- 495X 1 www.anvpublication.org

RESEARCH ARTICLE

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 Managing quality is fundamental to any activity and having
the competitive potential of quality. Quality in business, a clear understanding of the five aspects, measuring
engineering and manufacturing has a practical interpretation performance and taking action to improve is essential for
as the non-conformity or conformity of something. survival and growth to an organizations. The common
Production department might measure the conformance element of the business definitions is quite that the quality
quality, or degree to which the product was produced of a product or service refers to the perception of the degree
correctly. In the present economic and political climate to which the product or service meets the customer's
even high standards are demanded for getting quality expectations.
products. Adoption of atomization in manufacturing
processes organizations are benefited for producing quality Evolution of Quality Management:
products. In the early 1900s , F. W. Taylor , the ‘Father of Scientific
Management’ emphasised on quality by including product
There are five aspects of quality in a business context: inspection and gauging in his list of fundamental areas of
1. Production - producing something manufacturing management. In 1924, W. Shewhart
2. Checking - confirming that something has been done introduced statistical control charts to monitor production.
correctly Around 1930, H.F. Dodge and H.G. Roming introduced
3. Quality Control - controlling a process to ensure that tables for acceptance sampling. In the mid 1950s, Armand
the results are predictable Fiegen Baum Proposed total quality control which enlarged
4. Quality Management – directing an organisation so the focus of quality control from manufacturing to include
that it optimises its performance through analysis and product design and incoming raw material.
improvement
5. Quality Assurance – obtaining confidence that a The business meanings of quality have developed over
product will be satisfactory 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;
Received on 15.01.2013 Modified on 20.01.2013
b. A product or service free of deficiencies
Accepted on 09.02.2013 © A&V Publication all right reserved
Asian J. Management 4(1): Jan.-Mar. 2013 page 36-39

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

2. W. Edwards Deming: Concentrating on "the efficient Quality control emphasizes testing of products to uncover
production of the quality that the market expects, and defects and reporting to management who make the
he linked quality and management: "Costs go down decision to allow or deny product release, whereas quality
and productivity goes up as improvement of quality is assurance attempts to improve and stabilize production to
accomplished by better management of design, avoid, or at least minimize, issues which led to the defects
engineering, testing and by improvement of processes. in the first place. Total quality control", also called total
3. Peter Drucker: Quality in a product or service is not quality management, is an approach that extends beyond
what the supplier puts in. It is what the customer gets ordinary statistical quality control techniques and quality
out and is willing to pay for. improvement methods. It implies a complete overview and
re-evaluation of the specification of a product, rather than
Manufacturing: just considering a more limited set of changeable features
According to Deming, understanding customers and within an existing product. If the original specification does
suppliers was crucial to planning for quality. He advocated not reflect the correct quality requirements, quality cannot
continues improvement of both products and production be inspected or manufactured into the product. Total
processes through better understanding of customer Quality Management (TQM) refers to management
requirements which is the key to capturing world market. In methods used to enhance quality and productivity in
the manufacturing industry it is commonly stated that business organizations. TQM is a comprehensive
“Quality drives productivity”. Improvement in productivity management approach that works horizontally across an
is a source of greater revenues. However, this has not been organization, involving all departments and employees and
the case historically, and in the early 19th century it was extending backward and forward to include both suppliers
recognized that some markets, such as those in Asia, and customers.
preferred cheaper products to those of quality. Inspection,
which is what, quality insurance usually means, is Quality Management System:
historical, since the work is done. The best way to think Quality management is cross-functional in nature and
about quality is in process control. If the process is under involves the entire organization. The vital factor of a quality
control, it might not necessary of inspection in the process organization is the concept of the customer and supplier
cycle.When modern quality techniques are applied correctly working together for their mutual benefit. A Quality
to business, engineering, manufacturing or assembly Management System can be defined as:
processes, quality of products gets improved. These in fact
improve customer satisfaction, generation of lower “A set of co-ordinate activities to direct and control an
defects/errors and lead time. So modern quality has the organization in order to continually improve the
characteristic that it creates and-based benefits. effectiveness and efficiency of its performance.”

Customers: A Quality Management System enables an organization to

One view of quality is that it is defined entirely by the achieve the goals and objectives set out in its policy and
customer or end user, and is based upon that person's strategy. It provides consistency and satisfaction in terms of
evaluation of his or her entire customer experience. The methods, materials, equipment, etc, and interacts with all
customer experience is defined as the aggregate of all the activities of the organization, beginning with the
interactions that customers have with the company's identification of customer requirements and ending with
products and services. For example, any time one buys a their satisfaction, at every transaction interface.
product, one forms an impression based on how it was sold, A good Quality Management System will:
how it was delivered, how it performed, how well it was 1. Meet customers’ expectations
supported etc. 2. Involvement of staff
3. Improve process control
Quality control: 4. Reduction in waste
It is a process by which entities review the quality of all 5. Increase market share
factors involved in production. This approach places an 6. Facilitate training
emphasis on three aspects 7. Raise morale
1. Elements such as controls, job management, defined
and well managed processes, performance and integrity Cost of Quality:
criteria, and identification of records These are certain costs which are associated with product
2. Competence, such as knowledge, skills, experience, and service quality. Some costs are associated with
and qualifications preventing poor quality and some costs occur after poor
3. Soft elements, such as personnel, integrity, confidence, quality occurs. Most experts on the costs of poor quality
organizational culture, motivation, team spirit, and estimate looses in the range of 20 to 30 percent of gross
quality relationships. sales for defective or unsatisfactory products. Four major
categories of costs associated with quality management are:

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

a. Prevention costs: These costs are associated with From the observations 1 to 2, it was interpreted that
preventing defects before it occurs. These costs can be awareness through training is needed for understanding the
reduced by - Quality planning, Product review, problem and prevention of defect generation.
Training to the employees , Collecting data of quality ,
Data Analysis , charting of quality performance and Analysis 2: Collections for data of investigation/ trend
taking quality improvement projects. analysis:
b. Appraisal costs: These costs are incurred in assessing The data was obtained from quality control and production
the level of quality .These costs can be reduced by - department employees about the need for collections of data
Incoming material inspection, Process inspection, Final of investigation and trend analysis for reducing the cost of
goods inspection, Establishing quality laboratories quality.
c. Costs of internal failure: These are the results from
defects that are observed during processing . These The data was analyzed and tabulated as follows.
costs can be reduced by – Monitoring rework, Opinion Total
minimizing retesting and reducing waiting time. Yes 100.00 %
d. Costs of external failure : These costs are those when a No 0.00 %
defect is observed after the delivery of goods at their
point.These costs can be reduced by – Market The graphical presentation of data analysis is given below.
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 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:
From the above analysis it was observed that – The data was obtained from employees of manufacturing
1. 100.00 % respondents of production department were and quality control department about requirement of quality
said that training is needed about problem / defect performance report of manufactured products .The data was
generation. analyzed and tabulated as follows.
2. 0.00 % respondents of production department were said Opinion Total
that training is needed for non-occurrence of defects and Yes 100.00 %
problems. No 0.00 %

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

The graphical presentation of data analysis is given below. 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_syste
ms_QMS.pdf

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.

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