A Case Study of the Costs of Quality: Water Utilities

Abstract

:Cost of Quality has long been applied to manufacturing entities only. This research expands on that effort and applies the COQ methodologies to water utilities. Three water utilities were chosen for the initial study—El Paso, Lubbock, and San Antonio, Texas. A Prevention, Appraisal, and Failure Cost Compendium was developed to assist in categorizing costs. The study used manufacturing meta-analysis COQ percentages as a basis for comparison with water utility organizations. Three water utilities—El Paso Water Utility (EWU), Lubbock Water Utility (LWU), and San Antonio Water System (SAWS), were chosen to be included in this study because they represented three different populations, three different water source combinations, and three different county water usages. Using non-parametric statistics between manufacturing organizations and water utility organizations, the results show that prevention, failure, and total COQ are statistically different, yet appraisal costs are the same. A sensitivity analysis and a Pareto analysis performed on the data resulted in actionable analytics for researchers. We assert that COQ is a useful tool for water utilities to assist in making monetary resource decisions.