Difference Between Service and Product Quality
Difference Between Service and Product Quality
How can this phrase help a firm address its quality concerns? The language of money is essential. Without the quality cost figures, communicating poor quality information to upper management is slow and ineffective. One way to translate quality concerns within a firm and to upper management is to identify and measure the costs of quality. Appendix 1: Armand V. Feigenbaum Quality Cost Areas
Cost area Description
Examples Quality planning Statistical process control Investment in quality-related information systems Quality training and workforce development Product-design verification Systems development and management Test and inspection of purchased materials Acceptance testing Inspection Testing Checking labor Setup for test or inspection Test and inspection equipment Quality audits Field testing Scrap Rework Material procurement costs Complaints in warranty Complaints out of warranty Product service Product liability Product recall Loss of reputation
Prevention costs
Costs of control (Costs of conformance) Appraisal costs Arise from detecting defects via inspection, test, audit
Arise from defects caught Internal failure costs Costs of failure of control (Costs of nonconformance) External failure costs Arise from defects that actually reach customers internally and dealt with by discarding or repairing the defective items
Appendix 2: Joseph Juran Variants of the concept of quality costs include cost of poor quality and categorization based on account type Cost area
Examples Materials scrapped or junked Labor and burden on product scrapped or junked Labor, materials, and burden necessary to effect repairs on salvageable product Extra operations added because of presence of defectives Burden arising from excess production capacity necessitated by defectives
Excess inspection costs Investigation of causes of defects Discount on seconds Customer complaints Charges to quality guarantee account Delays and stoppages caused by defectives Customer good will Loss in morale due to friction between departments
Intangible costs