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 Total Quality Management

Subburaj Ramasamy

February 2008 TQM -RS

2
 Section I

TQM PERSPECTIVE

3
 Chapter 2

QUALITY COSTS

February 2008
TQM-RS 4
 Why Quality Costs?

•A tool to demonstrate cost of poor

quality to the top management as well as
the entire organization.
•Helps the the top management to
understand clearly the importance and
need of TQM activities.

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TQM-RS 5
 PAF Model of Quality Costs

Prevention Appraisal

FAILURE
Internal External

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TQM-RS 6
 Juran’s model of
Optimum Quality Costs

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 Modification proposed by
Schneiderman

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TQM-RS 8
 A Case Study
Cost of Quality as a percentage of
Total Manufacturing Cost
Total
Year External Internal Appraisal Prevention
COQ
1995 3 1.5 1 0.5 6

1997 1.5 2.5 1.5 0.5 6

1999 0.5 1 1.5 1 4

2001 0.1 0.2 0.5 1.2 2

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TQM-RS 9
 Distribution of causes of
external failure

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TQM-RS 10
 Distribution of the causes
for the internal failure costs
70% A : Wrong component placed;
B : Soldering failure;
C: Other Causes
Cost

20%
10%

A B C
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TQM-RS 11