Quality%20and%20Operations%20Management

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Quality and OperationsManagement

• Texas Instruments - Cost of Quality

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Cost of Quality

• Control Costs
• prevention
• appraisal

• Failure Costs
• internal
• external

The COQ includes those costs associated with
the definition, creation, and control of quality
as well as the evaluation and feedback of
conformance with quality, reliability and safety
requirements, and those costs associated with the
consequences of failure to meet the requirements
both within the factory and in the hands of the
customer.
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Cost of Quality

• Prevention
• quality planning
• process control
• data acquisition and analysis
• training and personnel development
• design verification
• quality system development and management
• quality reporting
• improvement projects

• Appraisal
• test and inspection of incoming material
• lab-based acceptance sampling
• in-line inspection and testing
• setup for test and inspection
• test/inspection equipment and supplies
• quality audits
• quality endorsements (ISO, MBNQA)
• field testing
• test/inspection equipment maintenance

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Cost of Quality

• Internal
• scrap
• rework
• retest
• downtown
• yield losses
• disposition
• engineering analysis
• tracking and reporting
• expediting

• External
• customer complaints
• warranty costs
• service and repair expense
• product liability
• recall expense and management
• returned material processing
• credit allowance
• loss of goodwill

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Setting The Stage
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Why Implement COQ?

• Pros

• Cons

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COQ categories -- useful or not?
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COQ versus DMOQ
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Was T.I. Successful?(and will this work
anywhere?)
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Next Steps for T.I.