So the question here is why do we need to measure the cost of quality. 2
And as I earlier said that it's not a very easy thing to classify these costs into these four categories 3
and maintain that it's not easy. 4
There is no common accounting standard for these things but these things still can be maintained at 5
a high level. 6
Any external cost, any major cost you can really maintain that and see where you are spending more. 7
The reason to do that would be the first thing is that management understand the language of money. 8
So management really might not be interested into the very detailed parts of each of these quality aspects 9
but management would always be interested in knowing about money. Management would be interested in seeing 10
that 11
how do we avoid cost. 12
How do we make money. 13
So you can make money by avoiding all those big failures which could happen internally or externally. 14
And for that as a quality professional or as employee you have a justification that the money spent 15
on improving or preventing activities is still a good investment because that investment can help you 16
in reducing those failure costs and you might want to use these cost to set the target to reduce your 17
cost, to reduce costs related to internal and external failure by investing more in appraisal and prevention. 18
So this completes our discussion on the Cost of Quality. 19
No we understand the cost of quality but as an individual employee how can we help in reducing the cost 20
of quality. 21
One aspect of that would be reducing wastes and when I talk of reducing wastes let's understand that 22
Toyota as a company which is pioneer in quality management, they introduce the concept of lean management. 23
And in that seven or eight types of wastes are defined. 24
So if each employee understands these types of wastes what can happen in your own work process they 25
can definitely help in reducing those wastes. So any employee in the organization needs to understand that 26
where all wastes are happening in there own work processes because that understanding can really help in driving 27
down the cost, driving down the cost of quality. 28
So with this basic understanding let's move on to the next section and look at the types of wastes because 29
that can really help us in reducing the cost.