Discarded castings are an example of the cost of poor quality assurance
Prevention costs
As already mentioned, quality assurance is a means by which the manufacture of a quality product or the provision of a quality service is ensured. However, there are costs associated with good quality. The first type of cost is the prevention cost.
Prevention costs are all costs associated with the development and maintenance of both the entire quality management system and the establishment of quality inspection system. Prevention costs include: quality and process planning, review of new product specifications, staff training and assessment, quality improvement projects, etc.
If a QMS and quality assurance are correctly set up in a company, the prevention costs are more an investment in reducing the significant effects that can result from the introduction of defective products on the market, and thus as an investment in maintaining profitability.
Testing costs
The manufacturer incurs inspection costs when suppliers or customers evaluate their purchased parts, materials, products or services to ensure that they meet performance requirements, quality standards and / or industry regulations.
Examples of inspection costs are: reviews of purchased materials, quality audits, field and calibration tests, the creation of quality control, inspection and test reports (both during the process and during final assessments) etc. In short: inspection costs give customers and suppliers the assurance that that products meet their quality standards with Container Loading Supervision Service.
Internal failure costs
Internal failure costs are caused when products and services do not meet quality requirements or do not meet customer requirements. These quality issues are identified before products and services are shipped to customers.
Internal failure costs include:
Analysis of causes and errors
Design changes, rework, rework and re-examination
Scrap, stock shortages, additional procurement costs
Vibration sensitive: must be used in a measurement laboratory
Production losses and delays
Need for additional manpower or reallocation of resources
External failure costs
External failure costs, as the term suggests, arise from defects that are discovered after a product or service has been delivered to external customers. Aside from the costs associated with external errors, a manufacturer's brand image can be significantly strained by the perception of poor quality and customer dissatisfaction.
External failure costs include:
Handling of complaints
Customer support and technical support
Warranty claims
Returns and recalls, including transport costs
Penalties based on SLA
Repair and service
Other forms of compensation
Legal problems with customers, suppliers or regulators
Public relations costs