Poor Quality Products/Duplicate Brands

Abstract

Cost of quality refers to the sum of costs incurred to prevent non-conformance from happening and the costs incurred when non-conformance in products and system occur which is completely known as cost of poor quality. Cost of poor quality is actually the cost of doing things wrong. Cost of poor quality refers to the cost associated with providing poor quality product or service. In process improvement, efforts, quality costs or cost of quality is a means to quality the total cost of quality – related efforts and deficiencies. Prior to its introduction, the general perception was that higher quality requires higher costs, either by buying better materials or machines or by hiring more labour. Furthermore, while cost accounting had evolved to categorize financial transactions into revenues, expenses and changes in share holder equity, if had not attempted to categorize costs relevant to quality, which is especially important given that most people involved in manufacturing never set hands on product. By classifying quality-related entries from a company's general ledger, management and quality practitioners can evaluate investments in quality based on cost improvement and profit enhancement. The central theme of quality improvement is that larger investments in preventation drive, even larger savings in quality - related to failure and appraisal efforts. When confronted with mounting number of defects, organizations typically react by throwing more and more people into inspection roles. But inspection is never completely effective, so appraisal costs stay high as long as the failure costs stay high. The only way out of the predicament is to establish the “right” amount of prevention. Cost of quality tools speak in the language of management $$$$. Research shows that cost of poor quality can range from 15 to 40% of the business costs. It can prioritize quality improvement actions. Cost of quality data shows how profit is effected by quality. It helps identify the redundant activities. Once categorized, quality costs can serve as a means to measure, analyze, budget and predict.