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SUMMARY
The philosophy of quality costs has been expanded over the years, to go beyond the traditional manufacturingoriented systems emphasizing the cost of poor quality, to better serve the needs of service and software industries and to include the effects of customer satisfaction on profits, the use of quality costs as a tool for quality improvement teams, etc. In keeping with this expanded scope, the ASQ Quality Costs Committee has significantly updated its philosophy and presents them in its third edition of Principles of Quality Costs.
KEY WORDS
cost of poor quality, cost of quality, software quality costs
ABSTRACT
How does management currently view the impact of quality on the results of their enterprise? In general, they are aware that quality has some impact on customer satisfaction, but unless they know that unhappy customers are causing lower sales, some may not be directly concerned. Many realize that quality has an impact on profits-but this understanding may be well-focused only when rising costs are due to major quality problems. Management, in general, may not directly translate quality or lack of quality into its true impact on their enterprise. Yet, understanding this impact can easily spell survival in today's marketplace. Fortunately, due to the efforts of many, management's understanding is improving at an accelerated pace.
A basic commitment of management should be that quality improvement must be continuously pursued. To achieve the most effective improvement efforts, management should ensure that the organization has ingrained in its operating principles the understanding that quality and cost are complementary and not conflicting objectives. Traditionally, recommendations were made to management that a choice had...