Quality Cost:

The term cost of quality or quality Cost is widely used and misunderstood as well. The price in the cost quality is not something that creates a quality service or a product. It is the cost that does not create a quality service or product. Whenever there is an increase in the cost, it means that the work is redone. Let me give a few examples of this: 1. 2. 3. 4. 5. Rebuilding a tool, Assembly resting, Reworking of a manufactured item or a thing, Bank statement correction, Reworking of services like loan operation reprocessing or in a restaurant when we replace a food order.

Any cost that is not expected of any perfect contribution of quality to that of the cost of quality is said to be Quality Cost.

Total Quality Cost:

Quality cost is got when the total cost is incurred due to the following reasons: 1. By investing in prevention of the non-conformance to the requirements. 2. Appraising of a service or a product for conformance to the requirements. 3. Failing to meet any of the requirements.

General Description of Quality Cost:

Prevention Costs: The costs of any or all activities that are designed specifically for the prevention of any poor quality in that of the services or products are known as the Prevention costs. Let us have a look at some of the examples of this kind of Prevention costs that are mentioned below:

Capability of evaluating the process, Planning of quality, Reviewing products that are new, Team meetings based on quality improvement, Quality in education and training, Surveys of supplier capability and Projects on quality improvement

Appraisal Costs:

The appraisal costs are the costs that are associated with the measurement, evaluation or auditing the products or services in order to assure the conformance to the quality standards and also the performance requirements. Let us have a look at some of the examples of costs that are included in this kind of Appraisal costs that are mentioned below: Measuring and test equipment Calibration, Testing or inspecting the material that are purchased, In-process and final inspection, Materials and supplies that are associated, Auditing the product, process or service.

Failure Costs: The product or service cost that is resulted and that which is not conforming the requirements or the needs of the customers or users is known as Failure Costs. These failure costs belong to internal and external categories of failure. 1. Internal Failure Costs: The cost failure that is internal occurs during the shipment of the products or prior to its delivery, or during furnishing a service to the users or customers. Let us have a look at the examples of the internal failure costs.

Material Review, Scrap, Re-inspection, Downgrading, Rework, Retesting, etc.

2. External Failure Costs: The cost failure that is external occurs after the shipment of the products or its delivery and during/after furnishing a service to the users or customers. Let us have a look at the examples of the external failure costs. Warranty claims, Customer complaint processing, Product Recalls, Returns from customers, etc.

Total Quality Costs: The above costs when are summed, we get total cost of quality. This is the representation between that of the actual cost of the product or services and the reduced costs if there was no possibility of substandard service, defects or the failure of the manufactured products.

Effective Implementation for Reducing Cost:

To reduce cost, we have several options in a non- traditional way. They are mentioned as follows: Creating new processes, Blending current or new techniques in-house, Revising the current structure delivery of the products and services, Involvement of the employees with Ideal Generation Meeting, Forming an arrangement that is cooperative with that of the other members of the industry.

A company can also opt to choose a traditional program like finding or discovering new product material, cutting down the travelling expenses, etc. No matter which approach is implemented, the principles that apply would be the same.

The management philosophy TQM is the one that seeks to integrate all the functions of Ford Motors like design, engineering, marketing, finance, production, customer service, etc.) in order meet customer needs and the objectives of Ford Motors. Ford Motors is viewed by TQM as a collection of processes as it wants Ford Motors to continuously strive to improve its processes by incorporating both knowledge and experience of workers. TMQ is something that is adaptable and infinitely variable. TQM is recognized as a tool of generic management and is applicable in service and public sector Ford Motors Company. There are numerous of evolutionary strands creating different strokes of their own versions. The foundations of TQM activities are mentioned as follows:

Senior management and employee commitment. Customer requirements are to be met. Development cycle time to be reduced. Demand/Time Flow Management. Team improvement. Cost of production and services to be reduced. Improvement in systems. Ownership of Line Management. Empowerment and involvement of employee. Recognition. Celebration. Quantified goals and benchmarking to be challenged. Main focus should be on processes as well as improvement plan. Strategic planning incorporation.

By this we can clearly understand that TQM should be able to practice all the activities and by all the personnel in R&D, Engineering, HR, Sales, Purchases, Marketing, Manufacturing, etc.

Principles of TQM: The principles of TQM that play a key role are as follows: 1. 2. 3. 4. 5. Commitment to Management (thought Plan, Do, Check and Act model), Empowerment of Employee, Decision Making Based on Fact, Improvement that is Continuous, Focus on Customers.

TQM Concept of Continuous Improvement: 1. Preventing mistakes. 2. When mistake cannot be prevented Ford Motors should pass on value added chain. 3. If a mistake recurs Ford Motors should stop the production until it is corrected. Implementation Principles and Processes: Preliminary step is to access the current reality of Ford Motors. To participate in event that lead to TQM. Precondition the existing quality of employees in working life.

Steps for Managing the Transition: Identification of task includes the present condition study, next is by assessing readiness, next is the creation of desired state model, next is the TQM implementation, next is announcing Ford Motors

change of goal and next is to assign responsibility and also resources. Finally it is to include a secure consultation and training within Ford Motors. Conclusion: Participation amongst that of the shop floor workers and the managers is encouraged by the TQM. The total quality has no theoretical (single) formalization. But according to Juran, Ishikawa and Deming, they have provided core assumptions, as Discipline and Philosophy of management that which institutionalizes continuous and planned improvement and also assumes that outcome is got by quality of all activities which mainly place within Ford Motors.

http://asq.org/learn-about-quality/cost-of-quality/overview/overview.html http://www.the-cost-reduction-consultant.com/CostReductionProgram.html http://www.isixsigma.com/methodology/total-quality-management-tqm/introduction-andimplementation-total-quality-management-tqm/