Week 5: Process and Performance
Management - Discussion
Cost of Quality (graded)
Although a balanced score card is probably the way to go, most companies don't seem to have a clue about the more
fundamental aspects of quality, such as the cost of quality. So let's start here. Just what do we mean when we talk
about the cost of quality? What major areas does it include?
Responses
Response
Author
RE: The cost
Herman Shelton
of quality?
Date/Time
9/25/2011 7:12:21 PM
Modified:9/26/2011 2:19 PM
When we talk about the cost of quality we are talking about the cost of ensuring goods and/or services meet
predetermined targets and/or expectations. In the case of expectations or targets, they must be set to attain a
certain level of quality. The key is determining if the cost are spent up front by ensuring the expectations
and/or targets are met before there are problems or after there are problems. Generally speaking, the cost of
quality can be 1000 times more expensive after problems surface.
RE: The
cost of
quality?
Thomas Humphrey
9/28/2011 7:13:49 PM
In my opinion quality is worth the money. If the job is not done right the first time
then the customer will end up spending more money in the end.
RE: The
cost of
quality?
Eric Mendez
9/29/2011 9:39:23 PM
The thing with quality it does not yield instant gratification for the company.
When the company begins to put emphasis on quality they are investing
money on workmanship, better materials, quality control ect. but the results
don't come till after the customer is done using the product, word of mouth,
and may even take long for skeptics. While the results of having a reputation
of good quality are great building that reputation takes time and can be costly
to a company at first.
RE: The
cost of
quality?
9/27/2011 7:56:00 PM
Eric Maynard
The cost of quality could have several meanings depending on to whom you are
speaking. From a Sales & Marketing perspective, if a product possesses quality then
the ever elusive yet invaluable word-of-mouth advertising tears through an industry
boosting sales, manufacturing, and ultimately profits! If the corporate accountant is
balancing the books and observes excessive costs in the manufacturing department
with no justification then quality becomes a derogatory term used to explain the
bottom line.
Cost of
quality
Instructor Thomas
9/25/2011 7:38:41 PM
Just what do we mean when we talk about the cost of quality
RE: Cost
of quality
Adam Oney
9/26/2011 11:01:26 AM
When we talk about cost of quality we are attempting to relate quality to money.
This is done in an attempt to quantify the profit gain or loss associated with a
particular quality metric. This approach helps to sell upper management on the
importance of quality and the impact it can have to a companies bottom line.
RE: Cost
of quality Richard Joyce
9/28/2011 8:32:02 PM
A lot of the time people do compare and or identify quality with money. In
some cases this can be found to be true. However, in most cases this is not
true. We could compare something that everyone, in one way or another,
should be able to relate to. Going to a "top name" grocery store versus a
"lower end" grocery store. In both stores you may find a lot of the same
products, but at different prices or you may not. Point being that expensive
does not always mean quality or better quality.
RE: Cost
of quality
Jonathan Burt
9/26/2011 6:46:54 PM
Taking a balanced scorecard into account the cost of quality is consists of these
perspectives:
Financial- the results the business provides for its shareholders. Profitability,
revenue and growth.
Internal- internal processes that drive the business. Quality levels, productivity,
cycle time and cost.
Customer- focuses on customer needs an satisfaction.
Innovation and Learning perspectives- future success in the organizations people
and infrastructure. Skills development, intellectual assets, employee
satisfaction, and market innovation are key measures
RE: Cost
of quality
Brandon Krauklis
9/29/2011 5:09:47 PM
The cost of quality is a term that's widely used – and widely misunderstood. The
"cost of quality" isn't the price of creating a quality product or service. It's the cost
of NOT creating a quality product or service. Every time work is redone, the cost of
quality increases. Obvious examples include:





The reworking of a manufactured item.
The retesting of an assembly.
The rebuilding of a tool.
The correction of a bank statement.
The reworking of a service, such as the reprocessing of a loan operation or
the replacement of a food order in a restaurant.
In short, any cost that would not have been expended if quality were perfect
contributes to the cost of quality.
http://asq.org/learn-about-quality/cost-of-quality/overview/overview.html
RE: Cost
of quality
Thomas Humphrey
10/2/2011 8:07:37 PM
Most people are willing to pay more for quality than they are for non quality work.
If we know a product or service is quality made or performed then it is easier to pay
the higher price. owever if we are unsure about the service or product then we are
more reluctant to pay the price if we think it is high.
RE: Cost
of quality
John Donnellan
10/2/2011 11:38:24 PM
I like to think of cost of quality more as 'value' of quality. Having a defined quality
program that works is an invaluable asset to an organization. On the other hand,
lack of quality management can 'cost' an organization big time.
RE: Cost
of quality
Kyle Tennant
9/30/2011 11:52:00 PM
When we talk about the cost of quality, we are talking about the overall picture of
quality and what it takes to attain the quality that we strive for as an organization.
You can not expect to build a car that is of extremely high quality, lets say a
Lamborghini, for the price that it takes to build a Hyundai. There is absolutely
nothing wrong with a Hyundai there are just two completely different levels of
quality here and as the old saying goes, you get what you pay for. It costs
Lamborghini a ton of money to higher top notch engineers, designers, software
developers, brand managers, etc. and this is the cost of quality that they pay for so
they can ask for a premium.
RE: Cost
of quality
Jonathan Burt
10/1/2011 10:07:06 AM
The cost of quality according to Juran can be divided into four categories:
prevention, appraisal, internal and external failure.
Prevention- the cost associated with diminishing variation in production or service
such as product defects, service errors. Involves reporting, data collections,
inspections, etc.
Appraisal- cost associated with determining the compliance with quality standards
that requires testing to ensure the quality standards are met.
Internal Failure- inhouse procedures that identifies quality nonconformance
before the product reaches the customer.
External Failure- process of dealing with quality nonconformance issues after
product or service reaches the customer. Categorized as customer service, returns,
warranties, and technical support.
Major
areas of
cost of
quality
Instructor Thomas
9/25/2011 7:39:11 PM
What major areas does COQ include?
RE:
Major
areas of
cost of
quality
Robert Spurlock
9/30/2011 8:07:15 PM
Quality costs can be organized into four major categories: prevention costs,
appraisal costs, internal failure costs, and external failure costs.
(Managing for Quality and Performance Excellence, 7th Edition. South Western
Educational Publishing, 2/2007. p. 440).
<vbk:1111800219#page(440)>
RE:
Major
areas of
cost of
quality
Jose Jimenez
9/28/2011 2:46:38 PM
The major areas of cost of quality are:



prevention cost- deals with the tools and techniques that are employed to prevent loss
appraisal cost- deals with inspecting products before they go out.
internal failure cost- deals with the scraps, rejected products and reworking of defective

units
external failure cost- deals with warranty, repairs and replacements, product recalls, and
liability
http://www.accountingformanagement.com/quality_costs.htm#Appraisal Costs
RE:
Major
areas of
cost of
quality
Herman Shelton
9/26/2011 2:20:18 PM
What major areas does it include?
Based on my experience I believe the major areas are: prevention, detection, analysis and
correction. Money can be spent to prevent ever having a problem. However, true cost is not known
because one does not know how low they can go until a problem occurs. Therefore, the cost of
prevention may be more expensive than it needs to be.
Detection – Money has to be spent to have a method of detecting problems before they are external
to reduce cost. However, one must also spend money to detect problems once services or goods are
external. Sometimes external problems can be identified and corrected before they go viral.
Analysis – regardless of internal or external, the data has to be analyzed to develop a solution for the
problem. Finally, there is the correction phase of the problem whereby cost increases as one goes
from internal to external exposure of the problem.
According to the lecture the four categories are: Prevention, Appraisal, internal failure and external
failure. I understand their perspective.
RE:
Major
areas of
cost of
quality
Bradley Burgess
9/26/2011 2:38:14 PM
The lecture mentions Prevention, Appraisal, internal cost of failure, and external cost failure.
The external cost of failure includes a number of things. The most obvious is the cost to fix or
replace an item under warranty. An indirect cost of external failure is a loss of customer confidence.
This means the customer will be more willingly to buy from a competitor. To counter this you will
have to either offer a discount on future purchases or offer better protection on future warranties.
Either method will cut into profit margins of the company.
RE:
Major
areas of
cost of
quality
Eric Maynard
9/27/2011 8:18:05 PM
As I mentioned before, a few major areas would be sales, manufacturing, and the
customer or end user. For a salesperson, having a top-quality product in their arsenal
is like walking into a deal with a loaded gun. They know the competition is inferior
and can initiate with confidence that the quality will sell itself. With manufacturing,
it's all about the quality of the products being used in the manufacturing process, if
one builds a widget with junk parts, chances are the final widget will be junk. With
regards to the consumer, if it's a quality product then they will likely tell their
friends, who will tell their friends, who will tell ....etc., and the same thing if it is not
quality.
RE:
Major
areas of
cost of
quality
Roberta Pereira
9/27/2011 8:52:36 PM
Quality costs can be organized into four major categories: prevention costs, appraisal costs,
internal failure costs, and external failure costs.
Prevention Costs: The costs incurred to keep failure and appraisal costs to a minimum. For
example product design or Poke Yoke costs are prevention costs.
Appraisal Costs: The costs incurred to determine the degree of conformance to quality
requirements. For example Inspection costs are an appraisal cost.
Internal Failure Costs: The costs of deficiencies discovered before delivery. We associate
deficiencies or nonconformities with the failure to meet explicit requirements or implicit needs
of external or internal customers.
External Failure Costs: The costs associated with deficiencies found after product is received
by the customer. These also include lost opportunities for sales revenue.
RE:
Major
areas of
cost of
quality
Sarah Sikes
9/28/2011 2:44:54 PM
Roberta, I agree with you about everything. The only costs that I too could
find was prevention costs, appraisal costs, internal failure costs, and external
failure costs. So I think that you did a good job on the points you made about
each costs.
Cost in
manufacturing
Jonathan Burt
9/26/2011 6:32:50 PM
When we look into manufacturing, it is very hard to generalize what areas within the
process need to addressed to save on cost and maintain high quality. I use this example
from the readings:
a. Design the product.
b. Make it and test it in production line and in laboratory.
c. Put it on the market.
d. Test it in service through market research; find out what the user thinks of it, and why
the nonuser has not bought it. e. Redesign the product, in light of consumer reactions to
quality and price.
It is in the redesigning of a product that we see areas in the manufacturing process that can
reduce time, save on materials, and overall reduce cost.
RE: Cost of
Quality
Jose Jimenez
9/27/2011 7:27:46 PM
Modified:9/27/2011 7:30 PM
Many people talk about quality and the cost of it everyday, but misunderstand it. The cost
of quality really is the money not used to make a product of Quality. When people have to
rework a product or "services not conforming to requirements or customer/user needs the
cost of quality increases.
For example:
 The reworking of a manufactured item.
 The retesting of an assembly.
 The rebuilding of a tool.
 The correction of a bank statement.
 The reworking of a service, such as the reprocessing of a loan operation or the
replacement of a food order in a restaurant.
The cost of quality can also be involved in the "costs of all activities specifically designed
to prevent poor quality in products or services".
Examples are the costs of:







New product review
Quality planning
Supplier capability surveys
Process capability evaluations
Quality improvement team meetings
Quality improvement projects
Quality education and training
http://asq.org/learn-about-quality/cost-of-quality/overview/overview.html
Cost of
Quality
Angela Ashford
9/27/2011 9:01:58 PM
It is the price you will pay for not considering quality and it is the cost incurred to rework
something. Some examples are re-testing, re-inspecting, customer or client complaints,
returns and warranty claims to name a few.
RE: Cost
of Quality
Herman Shelton
9/28/2011 6:55:11 PM
Angela,
I agree. Re-testing, re-inspecting and dealing with customer complaints can be
costly. It is proven it takes a lot more money to get a customer back than to keep
one.
Key processes
Instructor Thomas
9/28/2011 10:09:41 AM
Identify some of the key processes associated with the following business activities: sales
and marketing, supply chain management, managing information technology, and
managing human resources.
RE: Key
processes for
sales and
marketing
Jose Jimenez
9/28/2011 3:07:11 PM
These are the steps in Marketing Process:1. Compatibility Screening
2. Select the target Market
3. Market Positioning
4. Business and Marketing Strategy
5. Development, Implementation and Control of Marketing Plan.
Read more:
http://www.brighthub.com/office/entrepreneurs/articles/89562.aspx#ixzz1ZHbQNYx1
These are the steps for sales1. Prospecting/Initial contact
2. Pre-approach- planning the sale
3. Approach
4. Need assessment
5. Presentation
6. Meeting objections
7. Gaining commitment
8. Follow-up
9. http://en.wikipedia.org/wiki/Sales_process
http://en.wikipedia.org/wiki/Sales_process
RE: Key
processes
Eric Maynard
9/28/2011 8:27:31 PM
Some key processes associated with managing the supply chain involve compiling
data!
One must determine what they need, how much of it they need, and where they can
get it. After a manifest is drafted listing the supplies, cross-referenced with the
potential suppliers, a more involved method of research is required to determine
which supplier can provide the highest quality items at the most reasonable price.
Here, we can invoke the cost of quality if upon preliminary research it is found that
the same product, except of much better quality, can be purchased at a price that far
exceeds that of the originally chosen product. How far would an organization go, or
how much would it spend to provide its customers/clients with the highest quality
products available...............
RE: Key
processes
Angela Ashford
9/29/2011 11:24:10 AM
For information technology some of the key processes would be making sure the
system is fast and designed well for efficency. For supply chain it would be
organizing the work between the supplier and buyer. An example would be making
sure that orders are fullfilled accurately and to the customers satisfaction while
managing the relationship of buyer and supplier. For Human Resources some of the
business processes would be employee recognition, benefits management, hiring
and training of qualified employees etc. For sales and marketing some of the
processes would be manging the benefits and features of the company, branding,
and inventory reduction and rotation through the sales department.
RE: Key
processes
Brandon Krauklis
10/1/2011 7:58:24 PM
The key areas of HRM Process are:
1) Human resource planning
2) Attraction – also called as recruitment
3) Selection
4) Directing
5) Training and development
6) Performance appraisal
7) Promote, demote or transfer regarding to performances
http://practicehrm.blogspot.com/2009/09/human-resource-managementprocess.html
RE: cost of
quality
Robert Spurlock
9/28/2011 7:47:23 PM
Modified:9/28/2011 7:48 PM
When I think of cost of Quality I think of what a company losses if they don’t invest in it.
To look over quality is to only focus on the short term aspect of the company.
RE: cost
of quality
Sarah Sikes
10/2/2011 1:26:51 PM
Robert, I agree with you. At work if we over look quality that would be a bad thing
then we might sell something that is broken for example.
Repeatable and
measurable
Instructor Thomas
9/28/2011 8:57:02 PM
Provide some examples of processes that are repeatable and measurable and some that are
not.
RE: Repeatable
and measurable Thomas Humphrey
10/2/2011 8:12:30 PM
A process that comes to my mind that needs to be repeatable is automobile
manufacturing. These are very large products that take some time to complete so for
the companies to be able to turn out the numbers they need, they have to have a
process that can be repeated easily to maximize their production numbers.
Student
processes
Instructor Thomas
9/28/2011 8:57:34 PM
List some of the common processes that a student performs. How can these processes be
improved?
What is
kaizen?
Instructor Thomas
9/28/2011 8:57:53 PM
What is kaizen?
RE: What
is kaizen?
Brandon Krauklis
10/2/2011 8:16:06 PM
Japanese term for a gradual approach to ever higher standards in quality
enhancement and waste reduction, through small but continual improvements
involving everyone from the chief executive to the lowest level workers.
http://www.businessdictionary.com/definition/kaizen.html
RE: What
is kaizen?
John Donnellan
10/2/2011 11:42:08 PM
Modified:10/2/2011 11:42 PM
Kaizen is a Japanese management system focusing on continuous improvement. It
stresses involvement from the whole organization top to bottom.
RE: What
is kaizen?
Jose Jimenez
10/2/2011 4:24:24 PM
Kaizen means "improvement" or "change for the better". It refers to a philosophy that focus upon
continuous improvement in processes. In manufacturing, engineering, supporting business processes,
and management.
RE: What
is kaizen?
Robert Spurlock
9/29/2011 9:08:11 PM
Kaizen, which is a Japanese word that means gradual and orderly continuous
improvement, is a philosophy that encompasses all business activities and everyone
in an organization
(Managing for Quality and Performance Excellence, 7th Edition. South Western
Educational Publishing, 2/2007. p. 387).
<vbk:1111800219#page(387)>
it is a standard that a company decides to go by as their way to aproach missions in
the organization.
RE: What
is kaizen?
Angela Ashford
9/30/2011 7:10:16 PM
Its a core principle of quality management generally, and specifically within the
methods of Total Quality Management.
RE: What
is kaizen?
Eric Mendez
9/30/2011 10:24:41 PM
"A Japanese management strategy called Kaizen roughly translates to "continuous
slow improvement." In the corporate world, it's an efficiency and defect-proofing
system often used on factory floors. But Kaizen emphasizes the well-being of the
employee, working smarter, not harder and developing best practices so that
workers don't have to think. As such, Kaizen is an ideal approach to improve one's
personal workflow."
http://lifehacker.com/207029/practice-your-personal-kaizen
RE: What
is kaizen?
Bradley Burgess
9/29/2011 1:29:59 PM
Kaizen is, in effect, TQM on a instinctual level. It refers to a philosophy of constantly looking for
little ways to improve the business. These improvement do not need to be large ones, in fact Kaizen
encourages the small changes that can be done with a minimum of investment. But the combined
sum of these little changes can lead to drastic improvements over time.
RE: What
is kaizen?
Herman Shelton
9/29/2011 4:31:06 PM
Kaizen, which is a Japanese word that means gradual and orderly continuous
improvement,
is a philosophy that encompasses all business activities and everyone in an
organization.
(Managing for Quality and Performance Excellence, 7th Edition. South Western
Educational Publishing, 2/2007. p. 387).
<vbk:1111800219#page(387)>
Kaizen is a way of life. From the perspective of a Ninja, it is the everyday every
way pursuit of progress in hopes of achieving perfection. Kaizen is an attitude!
RE: What
is kaizen? Adam Oney
9/29/2011 7:17:04 PM
Herman,
Good definition of Kaizen. Kaizen can also refer to the Kaizen Institute,
which exists to assist those in implementing Kaizen. There are three key
points in a successful Kaizen program. The first point is that operational
changes and efficiencies will reveal inefficiency and waste. The second point
is that all employees in Kaizen seek to improve, this includes top
management all the way to the line level. The third point is that workers have
to have the ability to engage in providing feedback on methods of
improvement.
RE:
What is
kaizen?
10/1/2011 5:38:33 PM
Bradley Burgess
Another key point to understand about kaizen is that it focuses on small changes. It is
the polar opposite of the breakthrough method, which uses radical changes.
A good analogy might trying to diet to lose weight. Kaizen would be eating baked
chicken instead of fried, reducing portions, and other little steps. The Breakthrough
method is deciding to go on the Atkins diet. While both serve the same goals, kaizen
happens slowly, but melds itself into everyday life.
Six Sigma
Projects
Instructor Thomas
9/28/2011 8:58:20 PM
How might Six Sigma projects be applied to product design?
RE: Six
Sigma
Projects
Eric Maynard
hmmm...tough question!
9/30/2011 2:39:31 PM
The only thing I can think of would be a design team in a given industry using Six
Sigma as a way of marketing themselves. They would obviously possess a
documented history of success with their designs. For example, it could be a
consulting firm that has had major success examining organizations' use of
information technology and consulted on a better design, utilizing their current
technology, that would yield reduced expenses and greater efficiency!
RE: Six
Sigma
Projects
Jose Jimenez
10/2/2011 4:31:29 PM
The six Sigma concepts is facilitated through use of basic and advanced quality improvement and
control tools by teams whose members are trained to provide fact – based decision – making
information. It can be described as a business improvement approach that seeks to find and eliminate
causes and defects and errors in manufacturing and service processes by focusing on outputs that are
critical to customers and a clear financial return for the organization.
RE: Six
Sigma
Projects
Roberta Pereira
10/1/2011 9:37:29 PM
Six Sigma is an approach to designing or redesigning product and/or service to meet
or exceed customer requirements, expectation and improving profitability.
Appropriately applied, it generates the right product or service at the right time at
the right cost.
RE: Six
Sigma
Projects
Logan Richard
10/2/2011 5:57:35 PM
Well you can cut the waste out in making the products, this means less money spent
and less time to develop the product.
Using measurements Instructor Thomas
9/29/2011 8:55:15 PM
How can measurements be used to control and improve the daily operations at your place
of employment?
Index
numbers
Instructor Thomas
9/30/2011 7:11:06 PM
Explain how index numbers are often used to analyze quality cost data.
Linking
performance
measurements
Instructor Thomas
10/1/2011 9:11:22 PM
Explain the importance and utility of linking performance measurements to strategy.
Tracking costs
Instructor Thomas
of quality
10/2/2011 1:20:59 PM
Are the costs in the "cost of quality" tracked in most companies? If not, why do you think
they aren’t?
Not tracking
COQ
Instructor Thomas
10/2/2011 1:21:27 PM
If the costs of quality are not being tracked by an organization, what would need to be
changed so they are or can be tracked?
Do you
get what
you pay Instructor Thomas
for?
10/2/2011 1:21:54 PM
There is a saying, "You get what you pay for." Do you agree? Why or why don't you think
this is so?
RE: Do
you get
what
Roberta Pereira
you pay
for?
10/2/2011 4:36:22 PM
Sometimes I agree with but in other hand the price could be a business strategy to gain the customer confidence.
High quality mean customer satisfaction and customer satisfaction mean that you retain customers who are happy,
will continue with your product and refer you to others. Even though your product may be of a low price and you
have a high quality of TQM, you may end up with more sales than a product with a high price but low TQM. It's all
about customer and stakeholder satisfaction. You keep your customers satisfied, and they will keep coming back
despite the price.
RE:
Do you
get
what
Kyle Tennant
you
pay
for?
10/2/2011 11:35:52 PM
I think that for the most part when it comes to my favorite thing to buy,
electronics, price very often reflects the level of quality that you can expect to
see out of a product. While this is not always true one hundred percent of the
time, you can almost guarantee that if you buy a cheap electronic device, you
are going to get something that is cheap quality. With electronics it comes
down to the components that are used to develop and create the product,
typically the more you pay the better the components.
RE: Do
you get
what
Adam Oney
you pay
for?
10/2/2011 10:13:28 PM
I think this accurate for the most part. There are definitely examples where this is
not accurate. I am a huge baseball fan and the comparison of teams with the highest
and lowest payroll definitely seems to have some merit that the more you spend the
better you will do. There always seems to be anomalies such as the Tampa Bay
Rays who have one of the lowest payrolls but ended up winning a significant
amount of games and making the playoffs. I think it is accurate most of the time
because with greater resources or higher prices the ability to use higher quality parts
and players can make a difference.
http://www.forbes.com/sites/prishe/2011/09/29/the-most-and-least-efficient-mlbteams-of-2011/
JIT
Instructor Thomas
10/2/2011 1:22:49 PM
What is Just In Time (JIT) anyway? When is JIT appropriate?
RE:
JIT
Logan Richard
10/2/2011 5:54:48 PM
Just in time is when you do not over stock your supplies, you get just enough when
you need them.
Influencing
suppliers
Instructor Thomas
10/2/2011 1:23:22 PM
Is it enough to tell our suppliers they need to do something, say implement TQM? Why or
why not?
RE:
Influencing
suppliers
Richard Joyce
10/2/2011 7:14:01 PM
I don't think that it is enough to simply tell suppliers that they must do something to
correct a problem, such as implementing constantly. This could become a quit
lengthly process, one with possible frustrations and complications. In most cases,
but not all, people, companies, and or businesses are going to do the minimum
required in order to meet industry standards. For this reason, buyers and purchasers
of materials or goods must constantly provide input and demand quality.
RE:
Influencing
suppliers
Eric Mendez
10/2/2011 7:59:14 PM
I would have to agree with Richard, simply telling the supplier to do
implement TQM is not enough. TQM would be achieved with working with
the supplier, not just telling them to improve their quality on their end.
RE:
Influencing
suppliers
Kyle Tennant
10/2/2011 9:56:44 PM
It is never enough to just tell a supplier or anyone in an organization that they
need to fix simply one area especially if you are unfamiliar with the inner
workings of the other organization. First, your organization should have
performed its due diligence and sent out a RFP that correctly and accurately
outlined what it was looking for in a supplier. Then in the case that the
supplier is not living up to what was outlined, the organization can come back
and say this is what was agreed upon and have a course of action that will
hold up in litigation.
More JIT Instructor Thomas
10/2/2011 1:23:56 PM
JIT means that if I'm a company then the supplies I use will arrive just before I need them, yes? Remember, a
JIT system is a supply system. It does not, in of itself. inherently guarantee anything about the quality of the
products shipped or received. This is an important note to remember. So if improved quality is not the issue,
then where is the money to be made or saved (the reason for doing this) by using JIT versus running typical
warehouse and WIP (work-in-process)? Why would a company want to have a JIT system instead of having
a warehouse of inventory and not have to worry if the supplier's shipment will arrive on time or not?
Low inventories
Instructor Thomas
10/2/2011 1:24:27 PM
With a JIT system, I have low inventories and I am basically living hand-to-mouth for
parts. What does my company need to do in order to be sure we do not have too many
parts on hand, and why is this important? What does the supplier need to do so we will not
run out of parts?
Equipment
failures
Instructor Thomas
10/2/2011 1:24:58 PM
What happens when manufacturing equipment fails? What happens when the parts you use don't work
correctly or cause scrap and rework? These are indications of lack of predictability. Is this conducive to JIT?
What criteria should be placed on the company that plans to implement JIT? What criteria should we be
placing on our suppliers? — Comment: It is important to understand that JIT, in its purest form, is really
nothing more than a scheduling system. However, as you noted, if you are going to utilize such a system then
there are certain things that need to exist in order to minimize the effects of using this system, not least of
which are predictable processes, quality parts, and accurate forecasts.
JIT Suppliers
Instructor Thomas
10/2/2011 1:25:26 PM
What about the JIT supplier? Does he or she have the same kinds of needs and concerns as
we do? Why or why not? Let's say, for whatever reason, we like a particular supplier, but they are
following the old line of attempting to inspect quality in their products. What do we need to do or what
should we do? — Comment: The supplier must be able to deliver materials in a predictable and consistent
manner. That means his or her "house" must be in order as well as yours.
Your supplier might also have suppliers. What about their operations?
Cost of
Quality
Logan Richard
10/2/2011 5:53:20 PM
When I think of this, I think of Target and Wal-Mart. The reason why Wal-Mart is so
cheap and beats out the competition is quality of their products as in "Wal-Mart fall-apart". I always try and shop at Target verses Wal-Mart. because of a test I completed. I
took two end tables one from Target and the other from Wal-Mart. I have three kids so
normal wear and tear is higher in my house. Needless to say I still have the one from
Target.
RE: Cost
of Quality
Richard Joyce
10/2/2011 7:31:37 PM
I'm not sure that I would necessarily agree with your experiment. This may be true
for some test conducted, however many trail and errors need to be completed in
order to get a true result. Personally I prefer WalMart simply for the fact of
more competitively priced items, compared in terms of us versus them. At the same
time, the sain does go, " you get what you pay for".