Phillip B. Crosby, a corporate vice-president and director of quality at ITT for 14 years, gained a lot of attention when he published his book Quality is Free in 1979. (more…)
September 1, 2009
February 25, 2009
The rule explains how failure to take notice of one cost escalates the loss in terms of dollars. There are many costs of non-quality such as: (1) prevention, (2) appraisal, (3) internal failure, and (4) external failure. Of these types of costs, prevention cost should probably take priority because it is much less costly to prevent a defect than to correct one.
The principle is not unlike the traditional medical axiom: “An ounce of prevention s worth a pound of cure.” The relationship between these costs is reflected in 1-10-100 rule as depicted in the following illustration:
In the above illustration it is attempted to show that one dollar spent on prevention will save 10 dollars on correction and 100 dollar on failure costs. As one moves along the streams of events from design to delivery or “dock-to-stock,” the cost of errors escalates as failure costs becomes greater.
Source: Total Quality Management, Joel E.Ross
September 12, 2008
Definition of cost of Quality
It’s a term that’s widely used – and widely misunderstood.
The “cost of quality” isn’t the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service.
Every time work is redone, the cost of quality increases. Obvious examples include:
- The reworking of a manufactured item.
- The retesting of an assembly
- The rebuilding of a tool
- The correction of a bank statement
The reworking of a service, such as the reprocessing of a loan operation or the replacement of a food order in a restaurant
Historical Views of Quality Gurus about cost of quality
Historically, business managers have assumed that increased quality is accompanied by increased cost; higher quality meant higher cost.
This concept was questioned by quality pioneers like Juran and Feigenbaum. Juran examined economics of quality and concluded the benefits outweighed the costs. Feigenbaum introduced “total quality control” and developed the principles that quality is everyone’s job, thus expending the notion of quality cost beyond the manufacturing function. In 1979 Crosby introduced the new popular concept that “quality is free”. (more…)