A methodology for realignment of quality cost elements

Purpose – This paper aims to present an innovative research methodology that enables a company to realign its quality cost elements in order to improve implementation of its quality system. Design/methodology/approach – The methodology combines the following methods: the house of quality costs (HOQC) method, which translates the desired improvement in failure costs (internal and external) into controllable efforts (prevention and appraisal costs) and ranks them by relative importance, the analysis of variance method, which supports selection of vital quality costs, and the enhanced control chart method, used to validate the strong causal linkages in HOQC. Findings – Two case studies are presented to illustrate the application of the developed methodology. In the furniture firm, there are basically two vital sources of defects that could affect the overall cost of quality – raw materials and production process. In the food firm, traditional quality control is not enough to eliminate quality problems from the production processes. Hence, the hazard analysis critical control point is implemented. Practical implications – The methodology applied in this paper proved itself capable of effectively handling realignment of quality cost elements. The methodology emphasizes adopting a systemic approach for selecting the vital controllable efforts in response to vital failure costs, as well as for detecting changes in the quality cost structure. Originality/value – The American Society for Quality provides good coverage of quality cost types, but offers no mechanism for building and maintaining the relevance of these costs.