COST OF POOR QUALITY IN ENERGY SECTOR

Abstract

Companies need to produce their product and services with lower cost in order to survive in the competitive global market. That is why; firstly they need to define the visible and invisible cost of poor quality factors and then need to eliminate these Poor Quality Costs by utilizing the various improvement methodologies. In order to define the poor quality, firstly the project team members need to be assigned between the cross functional departments. Then, the current status needs to be defined step by step by utilizing the various methodologies such as Pareto Analyze etc. As a second step, Root Cause Analyze is performed, and lastly the actions and action plan are defined. All these steps are systematized with some methodologies such as PDAC, Practical Problem Solving (PPS), Six sigma DMAIC & 8D. In this study, it is aimed to decrease the Warranty Cost which is a factor of the Cost of Poor Quality in a factory in the Energy Sector. At the same time, it is aimed to decrease the customer complaints as well as to increase the customer satisfaction. The factors that cause the Warranty Cost have been defined in the Current Status Analyze. Pareto Analyze, Brainstorming, Fish Bone Analyze, Process Mapping, 5 Why Analyze etc. methodologies have been utilized in this study.

Keywords

• Key Performance Index (KPI)
• Pareto analysis
• Cost of poor quality (COPQ)
• Fish Bone
• 5 Why

References

1. Anderson, E. W. and Mary W. S. The antecedents and consequences of customer satisfaction for firms. Marketing science, 1993, 125-143.
2. Bland, F. Merle, John Maynard and David W. Herbert. “Quality Costing of an Administrative Process”, The TQM Magazine. Vol.10, No.5, 1998, p.367.
3. Efil, İsmail. Toplam Kalite Yönetimi ve Toplam Kaliteye Ulasmada Önemli Bir Araç-ISO 9000 Kalite Güvencesi Sistemi. Bursa:Uludag Üniversitesi Basımevi, 1990.
4. Harrington, H. James. “Performance improvement: a total poor-quality cost system”, The TQM Magazine. Vol.11, Iss. 4, 1999, p.221-230.
5. Hitchner, Earle, “Quality Works”, National Productivity Review. Vol.12, Iss.2, 1993, p.285-290.
6. Jones, T. O. and Sasser, W. E. Why satisfied customers defect. Harvard business review, 1995, 88.