International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395 -0056
Volume: 04 Issue: 05 | May -2017
p-ISSN: 2395-0072
www.irjet.net
ANALYSIS OF COST OF POOR QUALITY (COPQ) AND ITS CALCULATION: STEEL INDUSTRY Vivek Shrouty1, Priyam Tiwari2 1DGM
Quality at Uttam Value Steels ltd, Wardha 2Post.Grad at NITIE, Mumbai ---------------------------------------------------------------------***----------------------------------------------------------------
Abstract: In today’s era of high competitive industrial environment there is a need for steel industries to minimize their overall cost of product which will help to increase organization overall profit so that they can survive in highly competitive markets. It is wrong perspective that high quality means involvement of high cost. So, the term Cost of Poor Quality came in picture. The cost which is involved in making product comprises of raw material to final product, whereas there is also cost involve in defective product, reworking of product, customer complaints, sales return and down gradation. After going through the various literature reviews we found that any single model cannot be made to calculate COPQ. This present paper mainly aims to review the literature reviews of COPQ and formulate a model with respect to steel industry for calculation of COPQ also giving the concept of cost mapping which is mainly COPQ mapping. COPQ analysis helps company to achieve business excellence in their respective fields and helps in benchmarking to become excel from their competitors. Key Words: Benchmarking, Cost of quality, Cost of poor Quality (COPQ), Rework, Yield etc.
Abbreviations: COPQ- Cost of Poor Quality, TQM- Total Quality Management, NVAC- Non-value added cost, HRM-Hot Rolling Mill, ST- Shrouty/Tiwari.
1. INTRODUCTION Every organization or manufacturing industry believes in giving the good quality of product or service to the customer. To achieve this objective the process from which product or services are going through should have consistency, so that customer satisfaction can be achieved. To supply the defect free material and consistency in product and services, organization should follow the good quality management system. There always a probability in an organization that quality demanded by customer and the production process used in an organization are not in a strategic fit. It is not easily acceptable that there is a cost involvement in manufacturing defective product; one must focus on all the processes to calculate the cost incurred by company for making bad quality product. An organization can increase its profit margin without capital investment just by decreasing the cost of poor quality. So, it is very important for an organization to calculate COPQ.
2. LITERATURE REVIEW Total Quality Management (TQ, QM or TQM) and Six Sigma (6) are sweeping “culture change” efforts to position a company for greater customer satisfaction, profitability and competitiveness. The total quality management concept has undergone many changes and developments ever since it has been evolved. The modification of TQM has produced Six Sigma. Quality states as the standard of something as measured against other things of a similar kind and the degree of excellence of something. COPQ is refinement concept of quality cost analysis. Harrington states that use of COPQ gives company tool for measuring the consequences of poor quality. COPQ was popularized by IBM quality expert H. James Harrington in his 1987 book Poor Quality Costs. Cost of Poor Quality includes all the failure cost associated with a product. If your system, product and process have no flaws then your COPQ is zero. [1]
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