Goal of Quality Cost System
An excerpt from the Handbook for Quality Management (2000, QA Publishing, LLC) by Thomas Pyzdek
The goal of any quality cost system is to reduce quality costs to the lowest practical level. This level is determined by the total of the costs of failure and the cost of appraisal and prevention. Juran and Gryna (1988) present these costs graphically as shown in Figure VI.39. In the figure it can be seen that the cost of failure declines as conformance quality levels improve toward perfection, while the cost of appraisal plus prevention increases. There is some “optimum” target quality level where the sum of prevention, appraisal, and failure costs is at a minimum. Efforts to improve quality to better than the optimum level will result in increasing the total quality costs.
Figure VI.39. Classical model of optimum quality costs. From Jurans Quality Control Handbook, 4th edition. J.M. Juran, editor. Copyright © 1988, McGraw-Hill.
Juran acknowledged that in many cases the classical model of optimum quality costs is flawed. It is common to find that quality levels can be economically improved to literal perfection. For example, millions of stampings may be produced virtually error-free from a well-designed and built stamping die. The classical model created a mindset that resisted the idea that perfection was a possibility. No obstacle is as difficult to surmount as a mindset. The new model of optimum quality cost incorporates the possibility of zero defects and is shown in Figure VI.40.
Figure VI.40. New model of optimum quality costs. From Jurans Quality Control Handbook, 4th edition. J.M. Juran, editor. Copyright © 1988, McGraw-Hill.
Quality costs are lowered by identifying the root causes of quality problems and taking action to eliminate these causes. The tools and techniques described in part A of this chapter are useful in this endeavor. KAIZEN, reengineering, and other continuous improvement approaches are commonly used.
See also: Cost of Quality Overview for links to related topics.