An investigation into the collection, measurement and use of quality costs within a high volume production environment

The thesis describes an investigation into the collection and measurement of quality costs. It goes on to explain the manner in which this information was presented and used as an integral part of a specific (high volume manufacturing) company's total quality drive. Finally, it demonstrates how the cost of quality can help to identify and direct efforts to improve quality. Guidelines are given for the collection and analysis of quality cost data within the packaging industry. A comprehensive literature survey covering issues directly related to the objectives of the research, and peripheral issues of importance, was carried out. Literature on case studies for the promotion of quality were also included 'in the survey. The survey was confined to English language publications, using a list of keywords relating to money (i.e. cost, profit, economic, etc.) and topics ranging from the use of "quality improvement" as a business strategy to the quality-related costs associated with specific manufacturing operations. The search was primarily confined to quality related literature. This literature was reviewed and discussed in the light of the research experience, some gaps in the literature and information available were identified. These are discussed as a part of the development of a dedicated methodology, within the final chapter. A three stage, action research methodology was adopted. Action research encompasses direct involvement in organisational change whilst providing an increase in the knowledge base for a specific topic. This was the best possible option as the project specification relates to a practical problem with theoretical relevance. The main advantage of action research is that it is carried out in real-time and produces a concrete result, putting something of real practical worth back into an organisation. Four practical costing models were identified: (i) Prevention, Appraisal, Failure Model; (ii) Process Cost Model; (iii) Economic Balance of Quality (Optimum Quality Cost) Model; and (iv) Total Loss to Society (Quadratic Loss Function) Model. A host firm was used to test (i) and (ii). These two models were chosen because they exhibited certain characteristics. They both form part of British Standard - BS 6143, have had some publicity in the form of articles within professional journals, and have been utilised within both manufacturing and service industries to provide quality costing data. The British Standard (BS) 6143: Parts 1 (1991) and 2 (1990) was used as the primary guide. A detailed analysis of the applicability of both models was carried out, with necessary modifications being made to suit the host firms' particular industry (plastic injection moulding). This analysis is reported and discussed at length. Among the key conclusions are that quality costing can have a, very positive effect upon an organisations' quality improvement drive, and that the careful development of a specific cost model (in this instance the P.A.F. model) and a methodology for employing it, within a larger framework, should be considered essential. Further conclusions are that all organisations are at various stages in the use of formal measurement systems. As such, the identification of what stage an organisation has progressed to, and the determination of how they should proceed, is important for forward progress in the use of quality measurement systems. A conceptual framework has been designed for this purpose. A set of guidelines for quality cost collection and analysis within the packaging industry (high volume manufacturing) was created. As was a matrix to show an organisations' current place and potential development within certain key parameters, for example: i) company awareness, ii) costing models used, iii) measurement systems in place. The methodology developed for the host company is being used within other companies from the same corporate group. This is allowing refinement of the original model to take place. Other recommendations for further study are proposed in order to establish the validity of the above measurement system framework. This research has contributed to the existing knowledge base by trailing and modifying existing models within a specific environment, and through the development of a conceptual framework for assessing an organisations quality measurement system development. The direct contribution to the host company, in terms of practical and theoretical assistance has been considerable. This is fully detailed within the thesis.

MPhil thesis.