Total Quality Management - CII Institute of Logistics

Total Quality Management
The fact that failure costs exist is generally well recognized in industry. In order to
minimize failure costs many companies operate systems to find failures. There are
inevitably costs associated with finding these errors.
These are the Appraisal Costs
Today many of us expect failures to happen and so we need appraisal activities to find
them. If failure were eliminated the vast majority of appraisal activities would also no
longer be necessary.
Cost of Conformance
To reduce the CONC we need to invest in prevention activities. Prevention activities
inevitably result in some costs. These are prevention costs. Investing in the prevention of
failure enables failure and associated appraisal costs to be minimized. This is the
fundamental principle underlying Quality Improvement.
The key feature of a QIP environment is that failures are not accepted as a normal
occurrence. The root causes of any failures are identified and eliminated by the
introduction of prevention activities. Failure is an exceptional occurrence rather than the
norm. In this environment we do not need vast appraisal activity, we only need a small
audit activity to ensure our prevention system is working correctly. So after focusing on
reducing failure costs we can then look at reducing appraisal costs.
The Role of the Quality Improvement Team
The role of the QIT is to devise a method for identifying the Total Quality related costs
across the company. It is important that all Quality related costs are included at this stage
and not just the obvious costs associated with manufacturing. This analysis can then be
used as a basis for measuring progress as the QIP is implemented. It can also be used to
reinforce the need for implementing the Improvement Program when communicating
with management and employees. The measurement of quality costs provides valuable
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