ALIGN COMPONENTS PVT. LTD.

(BU II)

COST OF POOR QUALITY

TYPES OF POOR QUALITY COSTS

 INTERNAL ERROR COSTS

 EXTRNAL ERROR COSTS

COST OF POOR QUALITY

INTERNAL ERROR COSTS
 In-process SCRAP
 REWORK COST
 Troubleshooting and repairing
 Additionalinventory required to support poor process yields
and rejected lots
 Re-inspection and retest of reworked items

COST OF POOR QUALITY

In-process SCRAP
2 kg Dominos & Subway Casted Cheese Rejection
on 3rd Oct 2017
Out of 2500 boards 700 were rejected due to
De-lamination
Cost of Boards is Rs. 30 x 700 = Rs. 21,000/-

COST OF POOR QUALITY

REWORK COST
 Manpower Cost for Segregation
 Involvement of Quality, Corrugation, PPC Managers &
others to identify the Root Cause
 Cost of Brain-storming & interruptions

COST OF POOR QUALITY

Troubleshooting and repairing Cost
 Corrugation Double Becker Gum Roll Repair
 Printing Machine Ink Viscosity
 Frequent Stoppage at Stitching due to poor quality
 Additional Quality Check Points

COST OF POOR QUALITY

Additional inventory required
 More inventory required to be maintained to support poor
process yields and Rejected Lot
 More Floor Space & Pallets / Racks required
 Possibility of Damages in Storage & Handling

COST OF POOR QUALITY

Re-inspection and retest of reworked items
 Dueto lack of Confidence in the Process additional Quality
Check Points are required.
 All the new Products manufactured require Re-inspection
 Re-testing of Reworked parts

COST OF POOR QUALITY

Case Study: Dominos 2 kg
 No. of Boxes Rejected:
 Selling Price / Box:
 Total Scrap Value:
 New Parts manufacturing Cost:
 Rework / Repair Cost:
 Equipment Trouble shooting & Repair Cost:
 Indirect Cost:
 Cost of Low Moral:
 Interruption & Opportunity Lost time as Cost:

COST OF POOR QUALITY

ALIGN COMPONENTS PVT. LTD. (BU II)

STEPS TO REDUCE THE COST OF

POOR QUALITY
 ALIGN COMPONENTS PVT. LTD. (BU II)
1. Focus on Process
2. Follow Preventive Maintenance Schedule
3. Follow Quality Plan and keep on upgrading it.
4. Learn from the mistakes of the Past
5. Internal Corrective Action & Preventive Action Plans
6. Effective Use of TPM Tools
ALIGN COMPONENTS PVT. LTD. (BU II)

OUR MISSION IS TO REDUSE

REJECTION / REWORK
ALIGN COMPONENTS PVT. LTD. (BU II)

THANK YOU