chinhoyi university of technology

QUALITY SYSTEMS
ANALYSIS
APPLICATION FOR STEEL
MANUFACTURERS
ENGINEER TALON GARIKAI

2010

WWW.CUT.AC.ZW
Question One

Introduction

Most companies in Zimbabwe were established with aim of making profits in a shortest possible
time and to achieve this objective quality management issues are being considered as setbacks
for development by many organizations. Pursuing quality issues is like chasing a shadow; one
will never catch up with it. Several factors which include the following are the main causes of
failure of many quality managers to catch up with quality issues;

 Top management’s involvement

 Financial resources to train the manpower

 Changing technologies and techniques in the field of Quality Management

 Assessment of standards from Standard Boards

 Quality Management Policy

Top Management’s Involvement

Most Quality Managers are among the Top Management of most reputable organizations but the
major challenge is the implementation of their ideas and suggestions. It is very difficult to
educate the top management such as the Financial Director, Managing Director or Operations
Director about the need to improve product quality than the Machine Operators due to their
availability and understanding of the technical issues involved. It has been observed that the top
management hardly attends workshops concerning Quality issues. Whenever the top
management views quality issues they conclude that they are all expenses than methods of
improving profit margins by increasing sales. If the Quality issues are addressed by the
management and sales do not improve the management end up resorting to poor quality that will
maintain the same sales with less quality cost.

…….1

But ………………….…..…2

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Hence ……………………………………………..…..3

Using the equation above we can conclude that production cost is a function of net profit and
also analyzing the second equation we can deduce that quality cost is a function of production
cost. Using the equations above the top management usually argues that quality issues are costly
thus persuing quality issues become more of chasing a shadow than serving the organization for
a purpose.

Availability of Financial Resources

Every organization preaches quality on all its products and service delivery but implementing the
desires of the quality management to the organization usually requires financial resources. Most
Quality Managers are facing challenges on implementing the quality management tools due to
lack of financial support from the top management. Quality management is very expensive when
it is in its premature stages which involve training of manpower so as to educate them on the
path the organization will be following. It is usually rare to design and implement a Quality
Management System without the help of an Expert who will be a consultant; management mostly
regards this as an expense. Since most organization do not include Quality management policies
during formation of the organization or during the initial stages of the product life cycle of a
product, introducing quality issues will be very difficult when the product or organization has
reached its maturity stage. Whenever the management is faced with reduction in sales or service
delivery they concentrate on improving their marketing strategies and underestimate product
quality or quality of service they issue.

Changing Technologies and Techniques in Quality Management Systems

“Machines have known capabilities and tolerance figures which are reasonable to explain.”
Gyran (2000).With reference to the quote industrialist have shifted from techniques such as
100% inspections to improved and technologically advanced machines for production; making it
very difficult for Quality Managers to keep up with the changing trends. Intelligent Machines are
being implemented in developed countries leaving the Third world countries such as Zimbabwe
to apply old methods of quality management due to availability of cheap labor that will allow
techniques such as 100% inspection. It is now very difficult to achieve the ISO standards with
our Stone Age Technology we have in Zimbabwe, Engineers who are responsible for designing

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and upgrading the Machinery have now been reduced to Maintenance Managers only; posing a
challenge to Quality Managers to keep up with emerging technologies and techniques in Quality
Management resulting in them chasing a shadow.

Assessment of standards from Standard Boards

“When the cat is away the mice can play!” Gupta (2007).Our Top Management were so happy
when the Quality Manager assisted the organization on achieving the ISO 9000:2000 and even
gave him an increment but as soon as the Certifiers left the management began to promote its
traditional way of production which had nothing to do with what the ISO 9000:2000. The
management believe that the quality standards achieved were only for marketing the product
than to be practiced. This left the Quality Manager and his team chasing the shadows. When the
SAZ requested for an Audit the top management released funds for quality improvement in all
sections of the organization and tasked the Quality Manager to achieve that in the shortest
possible time. This practice by the management clearly highlight that Quality issues are for
certification only and not to improve sales or improve the product quality, from their perspective
they had the desired profits with poor product quality to sustain their company thus the need for
Quality Management was only a tool to be used during exporting the products.

Quality Management Policy

The Quality Management Statement is the governing policy during Quality Control and Quality
Assurance but however most employees among the top management do not understand it. The
Quality Management Statement is poorly defined making it very difficult to manage with
everyone believing that he/she is within the system whenever they conduct company business.
However persuing the quality issues becomes more of chasing a shadow than management.

Conclusion

I believe to a greater extent that for one to pursue quality issues they is need for proper
coordination from the top management and the benefits of the quality issues should be short term
basis so that the monetary benefits can easily be seen. In business the main objective is to
maximize profit and for quality issues to have an impact they should address the benefits with
minimum cost. Third World countries should realize that buying cheap machinery and failure to

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upgrade manufacturing plants using the returns will cause long term profit loss as compared to
application of emerging technologies. Quality Management Statements should be clear and
achievable and Standards are not for marketing alone but improvement in product quality with
long term benefits, failure to do so persuing quality issues becomes more of chasing a shadow
that you will never catch.

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Question Two

Introduction

Problem identification has always been a major problem within quality assurance and quality
control. All the American gurus advocated that quality teams should identify areas of potential
problems hence the problem with most engineering problems is to identify the source from
where the problem is emanating from. Conway claims that wasting time is one of the biggest
waste that can occur in an organization hence in most cases a lot of time is lost when Quality
teams are doing wild guess or wild goose chase.

A quality organizational technique is a term used to describe a tool designed to improve the
effectiveness of quality for an organization. These tools can be used during the implementation
period or initial stages of the Quality Management System (QMS) on problem identification and
solving. These techniques are

 Brainstorming sessions

 Interviews

 Bench marking

 Questionnaires

1.0 Brainstorming sessions

Brainstorming is a group creativity technique designed to generate a large number of

solutions for a particular problem. Brainstorming sessions can be used to identify the
problem areas or can be utilized to solve the identified problems within the quality system.

Brainstorming sessions are only effective or advantageous to an organization if the four basic
rules are followed which are

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 o Focus on quantity since quantity breeds quality- we are assume that the greater the
ideas generated the greater are the chances of producing a radical and effective
solution.

o Withhold criticism; participants should focus on adding ideas, reserving criticism for
critical later stage. By suspending judgment participants will feel free to generate
unusual ideas.

o Welcome unusual ideas so as to get a long list of ideas.

o Combine and improve ideas, good ideas may be combined to form a single better
idea.

Advantages

 It models thinking process to the participants

 There are chances of generating a lot of ideas if properly conducted.

 It is fun and exciting to an extend that more ideas can be generated.

 Information gained can be used for various other stages

Disadvantages

o During brainstorming participants have to listen to others and may spend time
repeating their ideas until they get sufficient attention.
o Going through the protocol, processing and ordering the ideas can become a complex
procedure. This also depends on the number and order of the generated ideas.
o Advising participants to let others speak without making them feel offended or
intimidated can be difficult.
o Participants with the ability to express their ideas faster and more effective gain the
general attention of the group. Some form of leadership can be formed in this way
within the group, which might make participants feel intimidated.
o On the one hand, people are not very skilled at controlling their non-verbal reactions
and might influence the creativity of others with their posture, gestures or facial

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 expressions. On the other hand, attempting to control their non-verbal behavior might
inhibit their own creativity.
o More discrete or introvert participants might find it difficult to express their crazy or
unorthodox ideas.

2.0 Interviews

The main advantage of face-t-face or direct interviews is that the researcher can adapt the
questions as necessary, clarify doubt and ensure that the responses are properly understood,
by repeating or rephrasing the questions. The researcher can also pick up nonverbal cues
from the respondent. Any discomfort, stress and problems that the respondent experiences
can be detected through frowns, nervous taping and other body language, unconsciously
exhibited by any person.

This would be impossible to detect in a telephone interview. So face-to-face helps the

interviewee to get the desired results and help them the expression of the person to whom
they are interviewing. By reading the facial expression of the respondent the interviewer can
easily understand what the respondent want to tell them about any thing.

The main disadvantages of face-to-face interviews are the geographically limitations they
may impose on the surveys and the vast resources needed if such surveys need to be done
nationally or internationally. The costs of training interviewers to minimize interviewer's
biases for example differences in questioning methods, interpretation of response are also
high. Another drawback is that respondents might feel uneasy about the anonymity of their
responses when they interact face to face interviews.

Advantages

 If the respondent lacks reading skills to answer a questionnaire.

 Are useful for untangling complex topics.

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  The Interviewer can probe deeper into a response given by an interviewee.

 Interviews produce a higher response rate.

Disadvantages

 The interviewer can affect the data if he/she is not consistent.

 It is very time consuming.

 It is not used for a large number of people.

 The Interviewer may be biased and ask closed questions.

3.0 Bench marking

Benchmarking goes beyond competitive analysis to understanding the competitor’s output

and process of obtaining the output. The advantages of benchmarking include enabling
organizations to outperform competitors, opening minds to new ideas, and placing
organizations in a continuous improvement mode.

Benchmarking is the systematic process of comparing business processes and performance

metrics to industry best practices in terms of quality, time, and cost dimensions, and making
such comparisons the basis to do things better, faster, and cheaper.

Advantages

 Benchmarking help place organizational focus on change and provides the direction for
the change process.
 Benchmark heralds change by:

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 1. Making explicit the competitors' standards that provide the organization with
minimum standards of excellence.
2. Providing new ideas and better ways of doing things.

 Benchmarking opens minds to new ideas, heralding a process of continuous learning that
leads to a learning organization.

Disadvantages

 A major limitation of benchmarking is that while it helps organizations in measuring the

efficiency of their operational metrics, it remains inadequate to measure the overall
effectiveness of such metrics. Benchmarking reveals the standards attained by
competitors but does not consider the circumstances under which the competitors attained
such standards. If the competitor’s goals and visions were flawed or severely restricted
due to some specific factor, an organization by benchmarking such standards runs the risk
of trying to ape such flawed standards or settling for extremely low standards.
 A bigger disadvantage of benchmarking is the danger of complacency and arrogance.
Many organizations tend to relax after excelling beyond competitors' standards, allowing
complacency to develop. The realization of having become the industry leader soon leads
to arrogance, when considerable scope for further improvements remains.

Finally, many organizations make the mistake of undertaking benchmarking as a stand-alone

activity.

4.0 Questionnaires

A questionnaire is simply a ‘tool’ for collecting and recording information about a particular
issue of interest. It is mainly made up of a list of questions, but should also include clear
instructions and space for answers or administrative details. Questionnaires should always
have a definite purpose that is related to the objectives of the research, and it needs to be
clear from the outset how the findings will be used.

Advantages

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  Easy to reach people who are spread across a wide geographical area or who live in
remote locations (postal and phone)

 Respondents are able to complete postal questionnaires in their own time and
telephone call-backs can be arranged for a more convenient time
 Telephone questionnaires can make it easier to consult some disabled people

 F2F questionnaires can make it easier to identify the appropriate person to complete the
questionnaire

 F2F questionnaires can be longer than postal and phone questionnaires, collect
more information and allow the use of ‘visual aids’
 Can contact a relatively large number of people at low cost.(postal and telephone)

Disadvantages

 Response rates can be low (postal) and refusal rates high (telephone)

 There is little control over who completes a postal questionnaire, which can lead to bias.

 Postal questionnaires are inappropriate for people with reading difficulties or

visual impairments and those who do not read English
 Postal and phone questionnaires must be kept relatively short

 F2F and phone questionnaires require the use of trained interviewers

 F2F questionnaires are time consuming for respondents, more costly and more labour
intensive than other methods.

Conclusion

I believe it is very difficult to use one method for quality organization because our organization
is too big and constitute almost four rolling plants, two smelting plants, two mines and one
processing plant with departments such as procurement division, marketing, accounts, auditing,
safety, production, mechanical, electrical and instruments. However I prefer the use of
questionnaires because the majority of the employees can read and write. In order to gather

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useful and relevant information it is essential that careful consideration is given to the design of
the questionnaire.

I would not chose bench marking because it is the same method that made us fail to crack the
international market after the management became arrogant after realizing that we were now the
local market leaders in 2007 forgetting that we were benchmarking ourselves to an organization
(ZISCO) which was gradually losing market share way before we came into existence due to
political and economic hardships. We were occupying 70% of the market share when ZISCO
was operating at 15% hence this means if all goes well and it start to operate at 60% it will be
able to have close to 92% of the market share. Benchmarking is only a means to an end, and it is
worthless if not accompanied by a plan to change.

Interviews are fairly good only if the organization is small (considering number of employees),
for our organization there are already organizational politics and conducting interviews will be
very difficult. Also the knowledge gap between the Plant Operators, Technicians, Electricians
and Artisans with the Middle and Top Management will cause much of communication
problems. Also our organization’s Top Management has no African and is made up of Indians
only with us being on the middle management with little to no contribution to managerial issues
thus interviews will be very difficult to conduct but questioners will prove to be helpful.

Question Three

Introduction

There are several methodologies which were suggested by Quality Experts on how total quality
can be achieved. The American gurus are among the leading Experts who suggested several
methodologies; these include Phil Crosby, Bill Conway, Joe Juran and Edward Deming. Each
one has his views which varied from definitions to methodologies but all had the common goal
of achieving Total Quality. We are going to analyze the different definitions and methodologies
correlate them and highlight the difference where applicable.

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Definition of Quality

The ISO8402-986 defined quality as “The totality of features and the characteristics of a
product or service that bear on its ability to satisfy state or implied need.” However the
American gurus in Quality had different definitions to quality, Phil Crosby defined quality as
conformance to requirements while Juran believed quality was fitness for use hence Conway did
not have a specific definition but incorporated into a broad definition which was development,
manufacture , administration and distribution of consistent low cost. The divergence on the
definitions though they had a common goal was mainly due to different concepts and
methodologies they believed should be used to achieve total quality.

Concepts

Methodologies used for achieving total quality were as a result of different concepts on total
quality management and how one can measure whether or not total quality had been achieved.
Phil Crosby believed in the concept of zero defects, he advocated that as long as the product
confirm to the requirements then there will be no defects and product quality will be high. His
concept was centralized more on preventative measurements which resulted in the quality
vaccine which companies adopted to prevent nonconformance and comprises of determination,
education and implementation. In contrary Conway believed in the concept of constant
improvement on all areas of operations. Crosby believed if the vaccine is injected at the
beginning it will involve continuous process improvement and gradually reduces the process
range so as to achieve the desired quality standards as compared to the constant improvement
concept which was advocated by Conway as shown on the diagrams below.

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Juran’s concept was focused on that most companies did not know how to manage in order to
achieve quality as he identified the problems such as organization, communication and
coordination of functions. His concept varies from Conway in that Juran focuses on management
and training though Edward Deming argues that his concept focuses on changes that must be

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taken so as to achieve quality. Deming over emphasized on Quality Assurance than quality
inspection.

Methodologies

Bill Conway advocated strongly on the use of Statistical methods. Conway’s methodology on
achieving total quality management was centralized on Statistical Process Control so as to help
and reduce process variations. Although Conway agrees with other guru’s on need for quality
improvement he focused also on reducing time wastage as he emphasized that it is one of the
biggest waste that can occur in an organization however Phil Crosby advocated for Zero defects.
Crosby believed that quality improvement is a continuous process not a programme with all
parties or departments within an organization involved hence the management should be highly
committed to quality. All the quality gurus agreed that quality teams should be formed and these
teams should determine where the current and potential problems lie.

Juran was quite unique on his approach as compare to Conway, Crosby and Deming in that he
advocated for companies to improve their management techniques in order to achieve quality.
Juran believed that Quality comes with a price and for any company to engage on quality
management it should be prepared to carter for the expenses however Edward Deming advocated
for quality assurance than quality inspection. Deming believed on long term commitment to the
established objectives of quality improvement. He believed that there should be zero tolerance on
defects from on process stage to another.

Crosby and Juran claimed that quality awareness campaigns were mandatory and cost of quality
in monetary terms should be highlighted to the top management. A commitment to zero defects
program must be introduced hence individuals should be encouraged to establish improvement
goals for themselves and their teams. In a nutshell Crosby’s methodology emphasize that
“quality improvement never ends.”

Conway’s techniques for quality improvement involve improving human relations’ skills,
statistical surveys, simple statistical techniques (clear charts), industrial engineering and
SPC. Above all the foundation for his methodology was Imagineering which he believes was
a useful tool on problem solving. Imagineering was the most distinguish feature on Conway
as compared to other gurus, which was based on images of the desired future being used to

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 shape the future and guide the thoughts. It has the ability to generate creativity and energy
and extends the problem-solving framework; it can be used to create a flow chart of what the
ideal process looks like. However Juran claimed that less than 20% of the problems are due
to workers and the remainder is due to Management. This highlighted that poor organization
within a company can be a setback to quality improvement. Juran also in his view claimed
that communication and coordination of functions within a company plays a pivotal role in
quality improvement. To counter for the managerial problems he stated that there is need for
massive training programs at all levels, build awareness and set goals for achievement.
Deming supported Conway on Statistical Methods in favor of inspections. He agreed with
other gurus that there is a great need for providing training to the manpower. Deming’s
methodology for achieving quality improvement was based on that “Quality is better than
Quantity” as he claimed that setting of targets particularly in numerical terms which do not
include quality criteria should be discouraged. Juran like all the other gurus believed that
there is need to carryout projects to solve the identified problems, give recognition, keep a
score on achieved goals, feedback on progress and maintaining momentum.

Conclusion

To a greater extent these American Quality gurus were on agreement that there are no shortcuts
to quality, no quick fixes and that improvement requires commitment and support from the top.
They all agreed that there is need for training of the workers and management for proper quality
improvement. Deming and Conway supported Statistical Methods as a tool for quality
improvement with Deming emphasizing on quality assurance than inspections. Juran strongly
believed that quality is not for free. Crosby emphasized on continuous improvement as Conway
believed in constant improvement. This clearly shows that total quality is achievable.

Question Four

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Introduction

“Quality is not for free.”[1] Most organizations have failed to maintain a Quality Management
System due to failure of showing how the quality cost is going to be deduced, Campanella
(1999). The top management always understand issues in monetary terms and it is usually the
duty of the Quality Manager to convince the management to fund the QMS when need arises.
Many organizations summarize the cost of associated with quality in four categories, which are
as follows;

• Prevention cost

• Appraisal cost

• Failure cost

o Internal cost

o External cost

• Opportunity cost

The cost of poor quality includes the internal and external cost failure categories, while the
appraisal and prevention categories are viewed as investments to achieve quality objectives,
Atkinson, Hambug and Ittner (1994).

1.0 Prevention Costs

These are costs that we incure when we try to keep failure and appraisal costs to a minimum. At
Steelmakers Pvt Ltd we practice Computerized Maintenance and this involves Preventative
Maintenance hence most of the tasks are due to methods which we be implementing so as to
maintain the QMS thus they are later termed Prevention costs. Other areas which contribute to
prevention costs are;

 Quality Planning- this cost is associated to the cost of time which is going to be used by
the people who will plan for the overall quality management system and also include cost
for communicating to the intended personnel.

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  New Product review- reliability maintenance and operational excellence activities related
to launching a new product

 Process Planning and Control- this mainly include the cost for Control engineering and
automation so as to improve product quality. For Steelmakers Pvt Ltd this cost is mainly
due to the projects which are usually carried out by the Instruments Department on
process improvement.

 Quality Audits-these are costs associated with activities in the overall quality plan.

 Training – all plant operators and control room operators usually determine the degree of
quality within a product thus intensive training programs on quality awareness are a
mandatory for such people hence the cost of holding seminars and hiring of quality
experts in the field of Steel manufacturing to train our manpower is usually termed cost
of training.

4.0 Appraisal Cost

Phil Crosby defined quality as conformance to requirements; hence the appraisal cost is the
degree of conformance to quality requirements. The cost associated with appraisal costs are;

 Final inspection and test- this is the cost of evaluation of conformance to requirements
for product acceptance. At Steelmakers this is done in the laboratory hence the cost of
reagents and electrical power to run the grinders and lab furnaces is calculated on
monthly basis.

 Maintaining accuracy of test equipment- this exercise is done by the Instruments

Department and bills the Quality Control laboratory basing on time and workshop fee.
The calibration of these equipment is done monthly or upon request by the users.

 In-process inspection and testing- this exercise is done by the Quality Control team
and sometimes the exercise is carried out by the Process Department hence the main
thrust is to check the conformance to requirements of all plant machinery settings and
efficiency.

5.0 Failure cost

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These failure cost are usually said to be failure to meet customer requirements and needs
hence they grouped into two subcategories which are;

a) Internal failure cost – dubbed the cost of inefficient processes

b) External failure cost

a) Internal Failure costs

These are the costs of deficiencies discovered before delivery due to inspections that are
associated with the failure to meet explicit requirements or implicit needs of the
customer. Process losses and inefficiencies that occur even when requirements needs are
met are also within this category. The cost will disappear if no deficiencies exist. It
consist of two categories the cost of failure to meet customer requirements and the cost of
inefficient processes. The subcategories of internal failure cost are;

o Process changes- there are several process within steel manufacturing and some
include recycling of water to cool the rotary cooler within the sponge iron
division. When the process of cooling becomes inefficient the product quality is
reduced by 35% and later requires blending. The process of changing the cooling
system within the cooling towers is costly. This falls under cost of inefficient
processes.

o Scrap- when the steel product is tested and does not satisfy the customer needs it
is considered to be scrap, in the case of Steelmakers Pvt Ltd this is usually due to
excess sulpher or magnesium that will reduce the desired physical strength of the
metal during the Brinell Test in Physical Laboratory of the Quality Control
Department.

o Rework- this is usually due to some suppliers’ failure to satisfy our specifications
on billets resulting in rework of the billets. The time and labour associated with

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 this cost can not be recovered since we do not have Return Outwards resulting in
rework or increased scrap.

o 100% Sorting Inspection- Steelmakers believe we have enough cheap labour to

carryout 100% inspection and do favour statistical methods as advocated by Bill
Conway. The cost associated with this exercise is said to be a quality cost.

b) External Failure Costs

These costs are associated with deficiencies that are found after the customer receives the
product also included is lost opportunities for sales revenue. These costs also disappear
when there are no deficiencies. Subcategories for external failures are as follows;

 Penalties due to poor quality- most of the suppliers to Steelmakers Pvt Ltd offer
reasonable discount provided the balance is settled within the agreed window
period, however our Accounts Department provide late payment resulting in loss
of revenue due to loss of negotiated discounts on invoices.

 Returned material- of late we received back a lot of steel products which were
dispatched for construction of stadiums in South Africa due to the lack of strength
within our steel product resulting in increased value of Return Inwards within the
Trading and Profit Loss Account. An action plan had already been drafted to
address the problem.

 Warranty Charges- the cost we incurred on smelting the returned material which
was still the warranty period was calculated and termed the warranty charges.
Since our warranty period is clearly stated on all our products as requested by
SAZ volume of returned material had gradually increased thus increasing quality
cost though we are retuning our customer base.

 Complaint Adjustments- when we received our returned material from from our
South African customer we incurred cost of investigating which included

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 involving a third part’s laboratory and later incurred cost on adjusting the justified
complaints attributed to defective product.

6.0 Opportunity Costs

Steelmakers Pvt Ltd emerged as the only steel manufacturing company after ZISCO closed.
In 2007 it was rated to be among the giant steel manufacturing company within the southern
Africa region as a result it gained a great deal of market share in South Africa during the
construction of the Stadiums for the World Cup finals. However the organization had its
tender which it acquired to supply construction steel for the expansion of the new SADC
office in Botswana due to the returned material from South Africa.[] after analysis we can
conclude that Steelmakers lost business and the loss of business can be calculated as the
tender value , however the loss of goodwill from other potential customers was difficult to
measure. Up to date Steelmakers failed to break into international market due to quality
issues though its ISO9001; 2000 certified.

Annual Quality Cost Form for Steelmakers Pvt Ltd.

Cost of Quality Failures Cost Percentage

Cost of ; contribution
$ 1200.00 6.12 %
Defective stock
$ 800.00 4.07 %
Repairs to products
$ 400.00 2.04 %
Scrap $ 120.00 0.61 %
Adjustments-customer
$ 4600.00 23.42 %
Downgrading products $ 80.00 0.41 %
Customer policy adjustment $ 620.00 3.16 %
Penalties $ 6000.00 30.54 %
Return inwards $ 200.00 1.02 %
Warranty charges
Sub-Total $ 14 020.00 $14 020.00 71.38 %

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 Appraisal Costs;
Cost of;
Initial inspection
$ 220.00 1.12 %
Final inspection and test $ 400.00 2.04 %
Incoming inspection $ 600.00 3.05 %
Maintaining Accuracy of test equipment $ 320.00 1.63 %
Sub-Total $1540.00 $ 1540.00 7.84 %
Prevention Cost
Cost of;
Control Engineering Projects $ 1200.00 6.11 %
Process Planning $ 400.00 2.04 %
Product review $ 80.00 0.40 %
Training $ 600.00 3.05 %
$ 1800.00 9.16 %
Quality Audits
Sub-Total $ 4080 $ 4 080.00 20.78 %

Overall Total Quality Cost $19 640.00 100 %

Conclusion

For the top management to understand the importance of QMS one need to quantify the size
the quality problem in the language of money. When Quality Costing had been completed
major opportunities for cost reduction can be identified, in the case of Steelmakers the
management has resolved to predictive maintenance than preventative maintenance so as to
reduce the Preventative cost on quality. The process Engineer who heads the Instruments
Department had been tasked to change his approach to less expensive process improvements
since the cost of his projects contributed much to Preventative cost. If carried out properly
Quality Costing can help to reduce customer dissatisfaction and associated threats to product
salability can be identified. Thus Opportunity cost is reduced and loss of goodwill is
minimized hence increasing market share thus increase in sales which will result in improved
profit margins.

References

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Quality Planning and Analysis, 3rd Edition J.M Juran and Frank M. Gryna 2000

Quality Planning and Analysis for Enterprise Quality, 5th Edition R.C.H Chua and J.A Defeo

Wood, Brad. 7 Steps to Better Benchmarking. Retrieved from http://bpmmag.net/mag/7-steps-

better-benchmarking-0507/index1.html

Boxwell, Robert, J., Jr. (1994). Benchmarking for Competitive Advantage. New York: McGraw-
Hill. ISBN 0-07-006899-2.

Praxiom Research Group Limited info@praxiom.com

Kirakowski, J (1997) Questionnaires in Usability Engineering

Oppenheim, AN (1992) Questionnaire design, interviewing and attitude measurement. Pinter,

London.

http://www.iso.org/iso/home.htm

www.tc176.org

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