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How to Manage Cost of Quality?
2016 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Quality management is more relevant than ever and has become an important tool for companies to succeed in the challenging and global environment they operate in. It encapsulates several different methods and principles, and is to day often referred to as Total Quality Management (TQM). Product quality control was one of the first concepts within quality management, but companies have not always understood the importance of good quality to attract customers. A paradigm shift occurred when competitiveness increased, which forced companies to work more actively to consistently create products of good quality. Resources were directed to meet quality standards and measurements for quality activities were implemented; the Cost of Quality (CoQ) concepts were born.CoQ methods allow companies to understand the implications of delivering poor quality and provide tools to prevent products of poor quality being produced. This is described by Joseph Juran who defined CoQ as “the sum of all costs that would disappear if there were no quality problems”. Several different CoQ models exist but can generally be described as a structured way to identify, me asure and lower costs associated to quality. Research argues that a CoQ model has several benefits: it could be a good marketing tool, evaluating overall production costs, used for long term forecasting and a help to set selling price to mention a few. This thesis had as purpose to explore and gain knowledge in CoQ, to investigate the relationship between conformance and non-conformance costs in the chemical man ufacturing industry, and how that could be a basis for lowering total CoQ. The literature study gave knowledge about CoQ and made it possible to create an apprehension of how CoQ could be used in organizations and the benefits it can bring. Academic journals and articles provided information and knowledge within areas such as quality management, TQM, CoQ and continuous improvements. The empirical findings from the case study showed how CoQ could be interpreted and used by an organization in the chemical manufacturing industry. The case study is built on interviews, observations and by studying internal reports and internal management systems. A major finding in this thesis was how CoQ could be modelled to support a CoQ system effectively. Identification of critical components such as definition, classification, identification and measuring was guiding how a model could be designed to detect and lower CoQ in an organization. Several CoQ components were dentified. These are discussed both specifically for the case study and in general for the chemical manufacturing industry. Specific recommendations were derived from the conclusions, suggesting ways to further improve CoQ as a method for reaching quality excellence.

Place, publisher, year, edition, pages
2016. , 81 p.
Keyword [en]
Social Behaviour Law, Quality, Cost of Quality, Conformance costs, Non-conformance costs
Keyword [sv]
Samhälls-, beteendevetenskap, juridik
URN: urn:nbn:se:ltu:diva-45283Local ID: 2feb8bbb-827d-4b3e-a121-aee5a6201a61OAI: diva2:1018570
External cooperation
Subject / course
Student thesis, at least 30 credits
Educational program
Industrial and Management Engineering, master's level
Validerat; 20160607 (global_studentproject_submitter)Available from: 2016-10-04 Created: 2016-10-04Bibliographically approved

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ter Schiphorst, Jacob

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