Cost of quality in the new manufacturing environment

Article Abstract:

Quality is a critical factor for companies attempting to gain leadership in their respective markets. For these organizations, it is important to learn how to measure the cost of their quality programs to see if these initiatives are worth the effort. According to Juran, Maser, Crosby and Feigenbaum, there are three types of quality costs: prevention costs, appraisal costs and failure costs. This classification is used by Juran and company as a framework for the quantification and reduction of the total cost of quality. However, Genichi Taguchi disagrees with their approach. Unlike Juran and his colleagues, Taguchi says it is important for companies to achieve targets instead of simply barely staying within specifications. His quality loss function addresses the link between quality improvement through variation reduction and costs.

Product quality, Finance, Cover Story

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Can cost control and quality care coexist

Article Abstract:

Management at the Children's Hospital in San Diego, CA, successfully implemented cost control procedures while maintaining the quality of its healthcare services. The hospital introduced a continuous quality improvement program in four pilot areas: neonatal intensive care unit, cardiology, orthopedics and patient registration and billing. One of the reasons why these areas were selected as pilots is the high cost they require to operate. A team that would introduce process changes that would lead to cost reductions as well as quality improvements was assigned to each area and trained on the skills they would need to perform their tasks. An evaluation of these four studies revealed that cost reduction and quality improvement can both be achieved through a single program, prompting management to introduce similar programs.

Hospitals, Case studies, Cost control, Children's Hospital and Health Center (San Diego, California)

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