Presented By

Sylvester B B
Easun – MR (TBN)
 Cost Of Quality
Cost of Cost of Non-
Conformance Conformance

Internal External
Prevention Appraisal
Failure Failure
Cost Cost
Cost Cost
 Cost Of Quality
Cost of Cost of Non-
Conformance Conformance

Internal External
Prevention Appraisal
Failure Failure
Cost Cost
Cost Cost
Cost Of Quality

Cost of Conformance

Prevention Cost

Costs incurred to keep failure and appraisal

costs to a minimum

Product or Quality
service Quality planning Training
assurance
requirements
Cost Of Quality

Cost of Conformance

Prevention Cost

Costs incurred to keep failure and appraisal

costs to a minimum

Quality Quality
Product or service requirements Training
planning assurance

Establishment of specifications for

Incoming materials,
Processes,
Finished products, and services

Prevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design,
implementation, and maintenance of the quality management system. They are planned and incurred before actual
operation
Cost Of Quality

Cost of Conformance

Prevention Cost

Costs incurred to keep failure and appraisal

costs to a minimum
Product
or service Quality
Quality planning Training
requirem assurance
ents

creation of plans for

quality,
reliability,
operations,
production, and inspection

Prevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design,
implementation, and maintenance of the quality management system. They are planned and incurred before actual
operation
Cost Of Quality

Cost of Conformance

Prevention Cost

Costs incurred to keep failure and appraisal

costs to a minimum
Product or
service Quality
Quality assurance Training
requireme planning
nts

creation and maintenance of the

quality system

Prevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design,
implementation, and maintenance of the quality management system. They are planned and incurred before actual
operation
Cost Of Quality

Cost of Conformance

Prevention Cost

Costs incurred to keep failure and appraisal

costs to a minimum
Product or
service Quality Quality
planning assurance Training
requireme
nts

development, preparation, and

maintenance of Training programs

Prevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design,
implementation, and maintenance of the quality management system. They are planned and incurred before actual
operation
 Cost Of Quality
Cost of Cost of Non-
Conformance Conformance

Internal External
Prevention Appraisal
Failure Failure
Cost Cost
Cost Cost
Cost Of Quality

Cost of Conformance

Appraisal costs

Costs incurred to determine the degree of

conformance to quality requirements

Verification Quality audits Supplier rating

Appraisal costs are associated with the suppliers’ and customers’ evaluation of purchased materials,
processes, products, and services to ensure that they conform to specifications
Cost Of Quality

Cost of Conformance

Appraisal costs

Costs incurred to determine the degree of

conformance to quality requirements

Verification Quality audits Supplier rating

checking for agreed Specifications at

Incoming material,
process setup, and products

Appraisal costs are associated with the suppliers’ and customers’ evaluation of purchased materials,
processes, products, and services to ensure that they conform to specifications
Cost Of Quality

Cost of Conformance

Appraisal costs

Costs incurred to determine the degree of

conformance to quality requirements

Verification Quality audits Supplier rating

Confirming the
Quality system (Internal) is
functioning correctly

Appraisal costs are associated with the suppliers’ and customers’ evaluation of purchased materials,
processes, products, and services to ensure that they conform to specifications
Cost Of Quality

Cost of Conformance

Appraisal costs

Costs incurred to determine the degree of

conformance to quality requirements

Verification Quality audits Supplier rating

To assess and approve the suppliers

(for their products and services)

Appraisal costs are associated with the suppliers’ and customers’ evaluation of purchased materials,
processes, products, and services to ensure that they conform to specifications
 Cost Of Quality
Cost of Cost of Non-
Conformance Conformance

Internal External
Prevention Appraisal
Failure Failure
Cost Cost
Cost Cost
Cost Of Quality

Cost of Non - Conformance

Internal Failure Costs

Costs to find defects before the customer

receives the product or service

Rework Failure
Waste Scrap
& Rectification Analysis

Costs occur when the results of work fail to reach design quality standards and are detected before
they reach customer.
Cost Of Quality

Cost of Non - Conformance

Internal Failure Costs

Costs to find defects before the customer

receives the product or service
Rework
& Failure
Waste Scrap
Rectificati Analysis
on

Performance of unnecessary work or

holding of stock Due to:
Errors,
Poor managing of issues, or
Communication

Costs occur when the results of work fail to reach design quality standards and are detected before
they reach customer.
Cost Of Quality

Cost of Non - Conformance

Internal Failure Costs

Costs to find defects before the customer

receives the product or service

Rework
& Failure
Waste Scrap
Rectificati Analysis
on

Scrapping of defective product or

material that cannot be
Repaired,
Used, or Sold

Costs occur when the results of work fail to reach design quality standards and are detected before
they reach customer.
Cost Of Quality

Cost of Non - Conformance

Internal Failure Costs

Costs to find defects before the customer

receives the product or service

Rework Failure
Waste Scrap
& Rectification Analysis

correction of
defective material or
errors

Costs occur when the results of work fail to reach design quality standards and are detected before
they reach customer.
Cost Of Quality

Cost of Non - Conformance

Internal Failure Costs

Costs to find defects before the customer

receives the product or service

Rework
Waste Scrap & Failure
Rectificati Analysis
on

Activity required to establish the

causes of internal product or
service failure

Costs occur when the results of work fail to reach design quality standards and are detected before
they reach customer.
 Cost Of Quality
Cost of Cost of Non-
Conformance Conformance

Internal External
Prevention Appraisal
Failure Failure
Cost Cost
Cost Cost
Cost Of Quality

Cost of Non - Conformance

External Failure Costs

Costs to correct defects found after the

customer receives the product or service

Repairs and
Warranty claims Complaints Returns
servicing

Costs occur when products or services that fail to reach design quality standards are not detected until
after transfer to the customer
Cost Of Quality

Cost of Non - Conformance

External Failure Costs

Costs to correct defects found after the

customer receives the product or service

Warranty Complaint
Repairs and servicing Returns
claims s

Of returned products and

the products in the field

Costs occur when products or services that fail to reach design quality standards are not detected until
after transfer to the customer
Cost Of Quality

Cost of Non - Conformance

External Failure Costs

Costs to correct defects found after the

customer receives the product or service

Repairs
Complaint
and Warranty claims Returns
s
servicing

failed products that are replaced

Costs occur when products or services that fail to reach design quality standards are not detected until
after transfer to the customer
Cost Of Quality

Cost of Non - Conformance

External Failure Costs

Costs to correct defects found after the

customer receives the product or service

Repairs
Warranty Returns
and Complaints
claims
servicing

All work and costs associated

with handling and servicing
customers’ complaints

Costs occur when products or services that fail to reach design quality standards are not detected until
after transfer to the customer
Cost Of Quality

Cost of Non - Conformance

External Failure Costs

Costs to correct defects found after the

customer receives the product or service

Repairs and Warranty

Complaints Returns
servicing claims

Handling and Investigation of

rejected or recalled products,
including transport costs

Costs occur when products or services that fail to reach design quality standards are not detected until
after transfer to the customer
 How…

1. Establish the measurement system

2. Collect the data

3. Analyze the data

4. Improve the result

 Obstacles …

• Lack of Management Interest/Support

What maters 
Lewinís Force Field
Theory of Change

How to Deal 
Lewinís Three Step
Change Process
 Obstacles …

• Lack of Management Interest/Support

What maters 
Lewinís Force Field
Theory of Change

How to Deal 
Lewinís Three Step
Change Process
 Obstacles …

• Company Economic Conditions or Status

• Lack of Knowledge

• Lack of Adequate Accounting and Computer Systems

 Hidden portions of the iceberg – Poor Quality Cost

Till now we gone thro only on the visible parts of the Quality cost
The invisible part is bigger than the visible part.
Thank You !