Collection of quality costs

Abstract

There is little point in collecting quality costs just to see what they may reveal. Many managers have successfully resisted pressure to cooperate in the collection of costs on the grounds that cost would not reveal any problems of which they were not already aware from the organization’s existing quality management information system. Thus, the effect of the quality costing strategy on the measurement and collection of quality costs is a key issue. Whilst Leibert [1] and Jenney [2] stress the importance of clear and concise objectives, there has been little comment in the literature on the significance of this. There is little doubt that getting the purposes of the exercise clear at the outset can have a considerable influence on the strategy; it is also of significant importance to the success of the project. For example, if the main purpose of the exercise is to identify high-cost problems, coarse-scale costs in known problem areas will suffice. If, on the other hand, the purpose is to set a percentage cost-reduction target on the company’s total quality-related costs, it will be necessary to identify and measure all the contributing cost elements in order to be sure that costs are reduced and not simply transferred elsewhere. Thus, the matter is important, not only from a philosophical point of view, but from purely practical considerations as well.