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The last decade has seen wide changes in how quality standards are applied in industry. We now have two functions: quality assurance and process improvement. Quality assurance focuses primarily on product quality, while process improvement focuses on process quality; the principles of quality cost support both.
The purpose of this book remains the same as the third edition: to provide a basic understanding of the principles of quality cost. Using this book, organizations can develop and implement a quality cost system to fit their needs. Used as an adjunct to overall financial management, these principles will help maintain vital quality improvement programs over extended timeframes.
This fourth edition now includes information on the quality cost systems involved with the education, service, banking, and software development industries. You'll also find new material on ISO 9001, cost systems in small businesses, and activity based costing. Additional information on team-based problem-solving, customer satisfaction, and the costs involved with the defense industry are also offered.

Sujets

Business

Qualité, hygiène, sécurité, environnement

Organizational Behavior

Employabilité, métiers et formations

Economics

Informations

Publié par	ASQ Quality Press
Date de parution	09 janvier 2013
Nombre de lectures	0
EAN13	9780873898782
Langue	English

Informations légales : prix de location à la page 0,4000€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

Extrait

Principles of Quality Costs

Financial Measures for Strategic Implementation of Quality Management

Fourth Edition

Douglas C. Wood, editor

Sponsored by the American Society for Quality
Quality Management Division

ASQ Quality Press
Milwaukee, Wisconsin
American Society for Quality, Quality Press, Milwaukee, WI 53203 © 2013 by ASQ All rights reserved. Published 2013.

Library of Congress Cataloging-in-Publication Data

Principles of quality costs: financial measures for strategic implementation of quality management/Douglas C. Wood, editor; sponsored by the American Society for Quality, Quality Management Division. pages cm Includes bibliographical references and index. ISBN 978-0-87389-849-2 (hardcover: alk. paper) 1. Quality control—Costs. 2. Quality of products—Cost effectiveness. I. Wood, Douglas C., 1955–editor. TS156.P6945 2012 658.4’013—dc23 2012042217

No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.

Publisher: William A. Tony Acquisitions Editor: Matt T. Meinholz Project Editor: Paul Daniel O’Mara Production Administrator: Randall Benson

ASQ Mission: The American Society for Quality advances individual, organizational, and community excellence worldwide through learning, quality improvement, and knowledge exchange. Attention Bookstores, Wholesalers, Schools, and Corporations: ASQ Quality Press books, video, audio, and software are available at quantity discounts with bulk purchases for business, educational, or instructional use. For information, please contact ASQ Quality Press at 800-248-1946, or write to ASQ Quality Press, P.O. Box 3005, Milwaukee, WI 53201-3005.

To place orders or to request ASQ membership information, call 800-248-1946. Visit our Web site at www.asq.org/quality-press.
Table of Contents Wood1a_TP Wood1b_copyright Wood1c_foreword Wood1d_preface Wood1e_Acknowledgments Wood2_Chapter1 Wood3_Chapter2 Wood4_Chapter3 Wood5_Chapter4 Wood6_Chapter5 Wood7_Chapter6 Wood8_AppendixA Wood9_AppendixB Wood10_AppendixC Wood11_References Wood12_About the Author
Foreword

K nowing cost of quality is critical for managing the business and prioritizing improvements. This text is a long-awaited new perspective on the cost of quality. It is an updated approach on the financial impact of quality compared to the third edition of The Principles of Quality Costs, edited by Jack Campanella and the ASQ Quality Costs Committee. The ASQ Quality Management Division (QMD) was the host of the Quality Costs committee for many years. As a long-time member and past Chair of the Division, I have benefitted from my association with the experts in quality costs. As such an expert, Doug Wood provides excellent new ideas on the use of quality costs and the importance of financial measurements for organizational improvement.
I am particularly pleased to see this text published. I used the previous QMD text, Principles of Quality Costs, when I taught a Cost of Quality class in an undergraduate quality curriculum. Using cost of quality as a guide for process and organizational improvement is a powerful tool for both manufacturing and service. I do not use cost of quality as a standalone process improvement approach, however. I see cost of quality as an entry point for focusing on promising areas to reduce defects, address customer requirements, and maximize financial business flows. It is the first line of defense for maximizing our ability to beat the competition. Once target areas for improvement are identified by a cost of quality study, a number of process improvement and redesign models available to implement the solutions are identified.
The language of money is essential at the customer-facing boundaries of the business. Without the ability to tie action to financial outcomes, executive leadership is blind. Understanding cost of quality gives us the vision we need to integrate processes effectively to meet customer requirements and to balance our contribution to the value chain that keeps the global economy functioning.
Take full advantage of the techniques shared in this new perspective on cost of quality. It is a powerful tool and one we desperately need to succeed in the competitive marketplace of today.

– Grace L. Duffy ASQ Fellow, Past Chair, Quality Management Division Tavares, Florida
Preface

T he last decade has seen wide changes in how quality standards are applied in industry. We now have two functions: quality assurance and process improvement. Quality assurance focuses primarily on product quality, while process improvement focuses on process quality; the principles of quality costs support both.
Improvement is everywhere, often implemented on a project basis. Unfortunately, a comprehensive cost-of-quality matrix is rarely used. Each project contains its own cost structure, and comprehensive strategic planning almost never uses the principles of quality costs.
The concepts involved in cost of quality may be somewhat better defined in larger industrial firms today than in 1999, when the prior edition of this book was published. The data on this are murky. In July 2009 the Chartered Institute of Management Accountants completed a survey titled “Management Accounting Tools for Today and Tomorrow.” More than 100 tools were included, and the 439 worldwide respondents represented manufacturing and service areas. Organizations were fairly evenly distributed in size, ranging from 50 employees to more than 10,000 employees. Quality costs were one of 14 costing tools; on average, an organization was found to use 4 of these 14. Surprisingly, quality costs were used by less than 10% of respondents. Of the 14, only “throughput costing” and “kaizen costing” were used by a smaller fraction of the respondents than quality costing.
In spite of this low level of acceptance, we believe quality costing is the best tool to strategically guide improvement efforts. All strategic planning is done in currency. If the planning and control of process improvement is not done in this way, programs will wither each time there is a change in leadership.
The purpose of this book remains the same as the third edition: to provide a basic understanding of the principles of quality cost. Using this book, organizations can develop and implement a quality cost system to fit their needs. Used as an adjunct to overall financial management, these principles will help maintain vital quality improvement programs over extended timeframes.

– Douglas C. Wood
Acknowledgments

A s a product of ASQ’s Quality Management Division, this book was truly a team effort containing inputs and articles submitted and reviewed by the experts who make up its membership, both past and present. The editor would like to thank the following individuals for their contributions to this work.

For New Material
• Sandford Liebesman—for the entirely revised material in ISO 9000.
• Daniel J. Zrymiak—for much material in the software cost of quality section.
• Hugh Daughtrey—for materials completing the software cost of quality section.
• Jd Marhevko—for general review and updates of things my eye just didn’t see.
• Gary Cokins—for the activity-based costing updates as well as helpful material on making the case to use this technique.
• Roderick Munro—for updates to the automotive standards.

For Previous Material
In addition to new material, this fourth edition uses information from many of ASQ’s previous publications on the subject. The books and the editors for each of these publications are listed below. Individual contributions are included within each of the publications themselves and, although not repeated here, are no less appreciated. These contributors, as well as the editors, are acknowledged and sincerely appreciated.
• Principles of Quality Costs (third edition)—Jack Campanella
• Principles of Quality Costs (second edition)—Jack Campanella
• Principles of Quality Costs (first edition)—John T. Hagan
• Guide for Reducing Quality Costs —W.N. Moore
• Guide for Managing Supplier Quality Costs —William O. Winchell

Many prior contributors have built a strong foundation for this work. They include: Joan Alliger, Chuck Aubrey, Dennis Beecroft, Frank M. Gryna, Dan Houston, J. Bert Keats, Herb Krasner, April King, Nick Shepherd, Jim Robison, and John Schottmiller.
I would like to make a personal thank you to those who have provided encouragement to me: Jack Campanella, Jonathan Andell, Dennis Arter, Bill Denney, Duke Okes, Russ Westcott, and Jennifer Winchester.
Finally, thank you to my family, local and distributed. Providing seen and unseen support helped make it possible to get this work done: Marilyn, Jennifer, Christopher, and Richard.
Chapter 1 – Quality Cost Concepts

HISTORY OF QUALITY COST DEVELOPMENT

O ne of the earliest writings pertaining to the general concept of quality costs can be found in Dr. J. M. Juran’s first Quality Control Handbook (McGraw-Hill, 1951). Chapter 1, “The Economics of Quality,” contained Dr. Juran’s famous analogy of “gold in the mine.” Most other papers and articles of that time dealt with more narrow economic applications. Among the earliest articles on quality cost systems as we know them today are W. J. Masser’s 1957 article, “The Quality Manager and Quality Costs,” Harold Freeman’s 1960 paper, “How to Put Quality Costs to Use,” and Chapter 5 of Dr. A. V. Feigenbaum’s classic book, Total Quality Control (McGraw-Hill, 1961). These writings were among the first to classify quality costs according to today’s familiar categories of prevention, appraisal, and failure.
In December 1963, the U.S. Department of Defense issued MIL-Q-9858A, Quality Program Requirements, making controlling costs related to quality a requirement for many government contractors and sub-contractors. This document helped to foc