Organization and costs of Quality

The organization of quality management should be such that it is not a combination of bits and pieces of responsibilities assigned to different departments; rather, quality management should be a responsibility which is properly organized and which can be properly located. This leads us to the maintenance of a separate functional department or quality management, with its top man ranking high in the organizational hierarchy. The next in the hierarchy to the top man for quality management should subdivide the work along the specialized skills, required in carrying out the jobs. Therefore, if it is the work of looking after different product lines or if it is the specialized work of looking after different functional specialists within the organization, these social tasks should be assigned to specialist personnel. The organization for quality management should, as far as possible, comprise a large span-of-control and few levels of hierarchy. This is necessary to maintain quick feedback of information.

A wide span-of-control is necessary, since a high degree of specialization is very desirable in quality management.

The following points may be remembered in organizing for quality.

1. To ensure that the integrity of the planning implementing monitoring and control feedback cycle is maintained in the total organization for quality.
2. Wherever the responsibility of quality management is to be delegated to different department, it should be done with many precautionary measures whereby the monitoring and control is in the ands of the quality management people.
3. To maintain high quality standards, it is necessary that quality management should have top management support. Therefore the highest person in quality management should be of the same level or a level below that of the top most management of the company.
4. The hierarchy structure of quality management should be kept to as few levels as possible. The span of control should be as broad as possible. The division of responsibility at the second or third level of quality management organization should be based on the needs of specialized skills, either product wise, function wise, or technique wise. An example of an organizational structure for quality management in a large organization with a number of product lines.

Costs of Quality:

Quality management is not only concerned with maintaining the quality characteristics of a product but also with doing the same at least cost. There are basically three categories of cost of quality:

Costs of Appraisal:

These are costs of inspection, testing, and such checking operations as are necessary to maintain the product quality. This includes the costs of the implementation of quality, and also the costs of monitoring and control.

Costs of Prevention:

These are the costs to prevent the production of bad quality output. These include costs of activity such as quality planning which tries to ensure that proper precautions have been taken to avoid wrong sampling plans being made or bad quality of raw material entering into plant or improper methods and processes being followed in the plant.

Costs of failure:

In spite of prevention and appraisal, there will still be losses due to rejects, rework, spoilage, etc. to some extent. These, as well as the costs of attending to customer complaints and providing product service, are included under the category of costs of failures.

The cost of quality can be analyzed in two different ways:

1. Category to category comparison: Comparing the relative amounts spent on each of the above mentioned cost categories i.e. how much is spent on prevention? How much on appraisal? And how much on failures?
2. Time to time comparison: For instance, comparing one quarter’s operation with the previous quarter’s operation.