Quality at Source, Zero Defects, Cost of Quality

Last updated on November 30th, 2019 at 10:59 pm

Quality at Source

Quality at the source is a lean manufacturing principle which defines that quality output is not only measured at the end of the production line but at every step of the productive process and being the responsibility of each individual who contributes to the production or on time delivery of a product or service. In a practical sense it would involve each operator checking his or her own work before the part/component or product is sent to the next step in the process. This practice when first implemented within the workforce will be a challenging change to company culture but will highlight the relevance of the product’s or service’s conformance to customer requirements and standards, thus also imparting the importance of quality standards and customer satisfaction within the workforce. 

Implementing Quality at the source

In order to make the cultural shift within an operation’s workforce to embrace quality at the source the following items should be considered: 

• Employee understanding of who the customer is and their requirements.
• Internal quality audits -Employee and team awareness of quality standards and benchmarks.
• Employee understanding of the customer’s intended use of the product or service.
• Multi-skilled workforce which can provide support and help in different process steps.
• Required tools and technology to identify quality flaws and rectify them in an efficient manner.
• Proper data collection and tracking of quality faults
  Open communication of standards, performance and processes.

The advantages of quality at the source are many, including: better informed employees, cultural awareness of the importance of quality to the customer, reduction in rework expenses, reduction in production  waste, improvement in plant and process OEE , and most importantly he empowerment of employees in achieving the desired quality standard required by customers. 

Zero Defect

Zero Defects – The Theory and Implementation

Zero defects theory ensures that there is no waste existing in a project. Waste refers to all unproductive processes, tools, employees and so on.  Anything that is unproductive and does not add value to a project should be eliminated, called the process of elimination of waste. Eliminating waste creates a process of improvement and correspondingly lowers costs. Common with the zero defects theory is the concept of “doing it right the first time” to avoid costly and time-consuming fixes later in the project management process.

Zero defects theory is based on four elements for implementation in real projects.

• Quality is a state of assurance to requirements. Therefore, zero defects in a project means fulfilling requirements at that point in time.
• Right the first time. Quality should be integrated into the process from the beginning, rather than solving problems at a later stage.
• Quality is measured in financial terms. One needs to judge waste, production and revenue in terms of budgetary impact.
• Performance should be judged by the accepted standards, as close to perfection as possible.

Zero Defects – Pros and Cons

The clear advantage of achieving a zero defect level is waste and cost reduction when building products to customer specifications. Zero defects means higher customer satisfaction and improved customer loyalty, which invariably leads to better sales and profits.

Nonetheless, a zero defects goal could lead to a scenario where a team is striving for a perfect process that cannot realistically be met. The time and resources dedicated to reaching zero defects may negatively impact performance and put a strain on employee morale and satisfaction. There can also be negative implications when you consider the full supply chain with other manufacturers that might have a different definition of zero defects.

In the end, the quest for zero defects is an admirable objective in itself, and most companies find that the pros outweigh the cons. By striving for stringent but accepted standards of defects, companies can build better processes and create an environment of continuous service improvement.

Cost of Quality

It’s a term that’s widely used – and widely misunderstood.

The “cost of quality” isn’t the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service.

Every time work is redone, the cost of quality increases. Obvious examples include:

• The reworking of a manufactured item.
• The retesting of an assembly
• The rebuilding of a tool
• The correction of a bank statement

The reworking of a service, such as the reprocessing of a loan operation or the replacement of a food order in a restaurant

Categorization of Quality Costs

The cost of quality is generally classified into four categories:

1. External Failure Cost
2. Internal Failure Cost
3. Inspection (appraisal) Cost
4. Prevention Cost

External Failure Cost: Cost associated with defects found after the customer receives the product or service. Example: Processing customer complaints, customer returns, warranty claims, product recalls.

Internal Failure Cost: Cost associated with defects found before the customer receives the product or service. Example: Scrap, rework, re-inspection, re-testing, material review, material downgrades

Inspection (appraisal) Cost: Cost incurred to determine the degree of conformance to quality requirements (measuring, evaluating or auditing).    Example: Inspection, testing, process or service audits, calibration of measuring and test equipment.

Prevention Cost: Cost incurred to prevent (keep failure and appraisal cost to a minimum) poor quality.  Example: New product review, quality planning, supplier surveys, process reviews, quality improvement teams, education and training.