- There are three types of activities that incur costs to be eliminated:
- Inspection: Testing, inspecting, or checking to determine whether a failure or error has occurred. For example, proofreading, countersigning a document.
- Fix: Correcting, reworking, or disposing of errors or poor output that are identified before the customer is affected. For example, redoing a report when incorrect information is discovered in it.
- Damage control: Correcting, reworking, or disposing of errors or poor output that are identified after the customer is affected. Also, handling problems that arise because the customer has been affected. For example, explaining to the customer how we are solving the problem.
- There is a fourth type of cost of quality: prevention. It usually is preferable (cheaper and easier) to handle problems through prevention rather than waiting until inspection, fix, or damage control are needed. Quality improvement is based on preventing problems from occurring. Through a cost‐of‐quality analysis, you can identify process steps that are inspection, fix, or damage control (red circles) in order to determine prevention measures (green circles) that can reduce or even eliminate those steps.
- The process steps circled in red probably will never actually disappear. We are all human, so we will never be perfect. However, thinking about the ideal, perfect world helps us to see where to focus improvement efforts. For example, we may always want to do a final inspection to check whether the product is good. But to improve the process, we should work on getting better at making product, rather than on better checking.
- If a flowchart has a few or no red circles, it may have been drawn with very little detail, as a big picture. This analysis can be done only with flowcharts that include enough detail to show the problems and fixes.
- Often, opportunities for improvement will be found beyond the boundaries of your flowchart. A narrow scope may have been the best way to draw the part of the process in which you were interested. However, do not limit yourself to that scope when you identify opportunities for improvement (Tague 2004).
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