Quality and Operations Management “Texas Instruments - Cost of Quality

Cost of Quality Control Costs Failure Costs prevention appraisal internal external “The COQ includes those costs associated with the definition, creation, and control of quality as well as the evaluation and feedback of conformance with quality, reliability and safety requirements, and those costs associated with the consequences of failure to meet the requirements both within the factory and in the hands of the customer.”

Cost of Quality Prevention Appraisal quality planning process control data acquisition and analysis training and personnel development design verification quality system development and management quality reporting improvement projects Appraisal test and inspection of incoming material lab-based acceptance sampling in-line inspection and testing setup for test and inspection test/inspection equipment and supplies quality audits quality endorsements (ISO, MBNQA) field testing test/inspection equipment maintenance

Cost of Quality Internal External scrap rework retest downtown yield losses disposition engineering analysis tracking and reporting expediting External customer complaints warranty costs service and repair expense product liability recall expense and management returned material processing credit allowance loss of goodwill

Setting The Stage

Why Implement COQ? Pros Cons

COQ categories -- useful or not?

COQ versus DMOQ

Was T.I. Successful? (and will this work anywhere?)

Next Steps for T.I.