Considerations about the Concepts and

PerspectivesonQualityCosts

Rodney Wernke*
Antonio Cezar Bornia* *

Summary Abstract

The concepts of quality costs have become The meanings of quality costs according to the
to be disseminated with the bibliography that dealt with the Bibliography deal with quality control and search
quality control and sought to provide support for offering support to the improvements, besides
to improvement actions, in addition to trying to measure the of trying to judge the company's quality. It also
quality of companies. Such concepts contribute contributes to manager the costs along with the
with cost management together with quality systems and the continuous improvements,
quality or continuous improvement programs, through information that makes it possible to manage
through information that enables management the systems in order to act before in the areas most
the programs, so that prioritization can be given to the critical due to the costs. The definition of quality costs
implementation in the most critical areas due to change according to the definition of quality and the
of costs. The definitions of quality costs strategy adopted by the company, that induce to a
vary according to the definition of quality and different applications or interpretations. Considering
the strategies adopted by the company, which induce its aspects of undeniable importance in the made
to different applications and interpretations. For management decisions, this article focuses on the costs
consider its aspect of undeniable relevance in of quality. Broaching several concepts and visions
managerial decision making, this article focuses on existent about it, it shows the ideological divergences
the costs of quality, addressing the various among the main authors.
concepts and views on the subject, showing the
conceptual divergences among the main authors.

Keywords: quality costs, concepts, views. costs of quality, concepts, visions.

Accountant. Master in Production Engineering by

UFSC. Professor in the Administration Course at Unisul/
rodneyw@unisulrct-sc.br
Mechanical Engineer, Master and Doctor in
Production Engineering at UFSC. Professor of the Program
of Postgraduate in Production Engineering at UFSC.

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Introduction 2 Concepts of Quality

Inthecompetitiveenvironmentinwhichcompanies The concept of quality is not new. This

currently, the pursuit of quality is the the notion has evolved over time, given
path, perhaps the only one, for your survival and the specificities that each period presented
long-term maintenance in the market. in the history of human development
The costs of quality support the (PALADINI, 1995).
cost management in conjunction with What can be considered more or less
quality or continuous improvement programs, recent is the concern with the process. Not
through information that enables management not only the manufacturing process, but also with
theprogramsinordertoprioritizeimplementation all the processes that the company employs
of programs in the most critical areas due to to serve and satisfy consumers. This
of costs. concern for all industrial processes
For considering an undeniable aspect and administrative is known as Total Quality
relevance in managerial decision making, Only controlled TQC (ROBLES JR., 1996).
this article focuses on the costs of quality,
Water quality is, in the understanding of TOLEDO (1987),
addressing the various concepts and conceptions
the most widespread keyword in the field
existing regarding.
business and, simultaneously, there is little
To understand what constitutes costs of
understanding of what quality is. He states
quality, it is important to know preliminarily
also that the theorists in the field themselves
the concepts of the two terms that compose the
they recognize the difficulty of being defined,
the cost one and the quality one.
precisely, what is the attribute quality of
aproduct.Thisdifficultyexistsmainly
1 Cost Concepts because quality can take on different forms
meanings for different people and situations.
SÁ (1995) defines costs as everything that PALADINI (1997) mentions that it is hardly
one invests to obtain a product, a a definition of quality will be found with
service or a utility (in the broad sense). such property in so few words as
This author also states that the majority of fezJURANeGRYNA(1991) when they conceptualized
masters understand costs as applications, for
fitness quality for use (suitability for
move the activity, either directly or indirectly,
use). Perhaps this is one of the concepts most
made in the production of goods for sale.
disseminated in the literature on the subject.
For LEONE (1997), costs refer to
JáGARVIN (1992) prefers, instead of a
value of the production factors consumed by
concept, adopting various dimensions of
a company to produce or distribute products
or services, or both. quality. It then identified eight categories:
The costs are related to manufacturing. performance, characteristics, reliability
of the products, usually divided, compliance
accordingtoSANTOS(1990),inrawmaterial,hand- and perceived quality. It states that each category
direct labor and indirect manufacturing costs. is stagnant and distinct, as a product or service
MARTINS(1992) refers to costs as it can be well rated in one dimension, but not
expense related to good or service used in in another, being in many cases inter-
productionofothergoodsandservices,thatis,thevalue related. It also emphasizes that, as a concept,
two inputs used in the production of the products quality has existed for a long time, but only
of the company. It highlights that the cost is also a it has recently come to be used as a
expense, only recognized as such, that is, as management form.
cost, at the moment of using the factors of TAGUCHI, according to NAKAGAWA (1993),
production (goods and services) for the manufacture of a developed a methodology that defines the term
product or provision of a service. quality through the loss function, which allows

76
measure it in monetary units and associate it JáMOLLER (1992) conceives quality
the product technology. This methodology as two factors: technical quality and the
allows to measure the impact of the losses of human quality. It understands as quality
product and minimize them not only for the customer technique 'the obtaining of profits', as this aims to
but also to society, in the long term. meet the demands and expectations
Stil about Taguchi's definition, concrete elements such as time, quality, finances,
PALADINI (1997) says that, for him, 'the quality taxa de defeitos
it is the monetary loss imposed on society from security, guarantee. Human quality is
from the moment the product leaves the factory, beyond profits, that is, aims to satisfy
be, from the perspective of added value, can- expectations and emotional desires like
to conceive the quality of a product as loyalty, commitment, consistency
determined 'by economic losses' behavior, credibility, attitudes
provoked to society as a whole, since attention. It emphasizes that the two concepts are
the moment he is put up for sale. complementary.
A quality product, in the view of According to ISHIKAWA, in CARAVANTES (1997),
consumer, is the one who meets the quality management consists of developing,
needs and that is within your create and manufacture more economical goods,
possibility of purchase, that is, have a price useful and satisfactory for the buyer. Manage
justo (CSILLAG, 1991). the quality would also be to manage the price of
For FEIGENBAUM, cited in CORAL (1996),
cost, the selling price and the profit.
quality is determined by the customer, not the
CARAVANTES (1997) asserts that also the
determination of engineering or marketing
Companies have their own vision of quality.
and not from the upper management. The quality must
For Federal Express (USA), for example,
to be based on the customer's experience with the
Quality means doing everything right the first time.
product and the service, measured through the
sometimes, resulting in customers
perceived needs that represent a
unanimously satisfied. As for the company
meta in a competitive market. Quality of
American Lockheed has quality as a
products and services can be defined, then,
philosophy and attitude that aims at the analysis of
how the combination of characteristics of
capabilities and processes and continuous improvement
products and services related to marketing,
engineering, production, and maintenance, through of these with the aim of satisfying the consumer.
of which products and services in use Most of the various approaches
will meet the customer's expectation. mentioned share a common point,
CROSBY (1994) defined quality in terms what is the satisfaction of needs
concise, when defining it as "quality is consumer. This satisfaction can be
compliance with the requirements." Thus, if a represented, for example, in suitability for use
the product meets all the requirements for this defended by Juran and Gryna; in the characteristics
product according to its standard model, it of products or services that correspond to
it is a quality product. If the product is customer expectations; in the dimensions of
manufactured correctly the first time, then the quality presented by Garvin (in which the
waste would be eliminated and quality would not customer prioritizes one or more of these dimensions.
it would be costly. It is still dependent on perception
OAKLAND (1994) asserts that the notion of quality of the individual's personnel (Oakland); in
quality fundamentally depends on the meeting the customer's needs within
perception of each one. What has quality for of your purchasing possibilities (Csillag) and
somepeoplemaynotmeettheneeds also in Ishikawa's view (cited by Caravantes,
from others. In other words, the concept of quality 1997) in which products must be useful and
it would depend on the individual's personal perception. satisfactory for the buyer.

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3 Costs of Quality SAKURAI (1997) says that the cost of quality
can be defined as the cost incurred by
The concepts of quality costs cause of existence, or of the possibility of
began to be disseminated with the bibliography existence, of a low quality. For this
which dealt with quality control and sought the cost of quality is the cost of doing
offer support for improvement actions, in addition to things in the wrong way.
trying to measure the quality of companies. The According to TOWNSEND (1991), it is not the quality
definitions of quality costs vary from what costs, but rather the non-compliance or the
agreement with the definition of quality and the
non-quality that is costly. For him,
strategies adopted by the company, which induce
achieving quality is costly, except when
to different applications and interpretations.
compared to not achieving it.
The costs of quality were discussed.
Mention as an illustration the quote by Richard
initially by Juran in 1951 in his book
W. Anderson, general manager of the Division of
Quality Control Handbook. ForJURANeGRYNA
(1991), the term 'quality costs' assumed Hewlett-Packard Computer Systems:
different meanings for different people. The sooner you detect and prevent a
Some compared them to the costs to defect, but you will be able to save. If you
achieve quality. Others equated the term discard a faulty resistor of 2
cents before using it, you will lose 2 cents.
the costs for the operation of the
If I don't find it until it is welded in
Quality Department. The interpretation to a computer component may cost-
that the quality specialists arrived was the US$ 10 to repair the component. If you
equate the "quality costs" with the cost do not discover the faulty component until
of quality (notably the costs for be in the hands of the computer user, the
to find and fix the defective work). the repair will cost hundreds of dollars. In fact,
Thus, Juran and Gryna assert that the costs of if a computer costing $5,000 has to be
quality are those costs that would not exist repaired in the field, the expense may exceed the
manufacturing cost.
if the product were manufactured perfectly
the first time, being associated with the In the same sense, CALEGARE (1985) states
production failures that lead to rework, achieving the desired quality costs money,
waste and loss of productivity. because even a bad product has its cost of
According to CROSBY (1994), the costs of quality. Therefore, the goal of managing the
quality is related to conformity the cost of quality is to ensure that the
or absence of compliance with the requirements of suitability for the use of the product or service
product or service. Thus, if quality can be achieved at the lowest possible cost.
being associated with conformation, it is deduced that the
Still, in the book of the Regional Council of
conformation problems and the measures that Accounting of São Paulo (1995), cost of
avoiding them incurs a cost. So, the quality is defined as not only being the
the cost of quality would be formed by costs cost incurred to obtain quality, nor the
to maintain compliance added to the
cost incurred for operation of
costs of non-compliance. That is, lack of
quality department, but the costs
quality generates loss, as when a product
if defects are present, there will be an additional cost for
incurred in the creation of quality control,
in the prevention, in the assessment and in the correction of
part of the company for correcting defects or
defective work.
the production of a new piece.
PALMER (1981), when referring to the costs of SÁ(1995) states that
quality, emphasizes that the quality issue Total Quality Cost is the application of capital
it is primarily a cost issue. Even if in the sense of offering to the product that is being developed

a company has the capacity to manufacture a distinctive character that gives it conditions
for the full satisfaction of the customer, both regarding the
a perfect product, this may not be feasible from
use wants regarding the price.
economic point of view.

78
 For the various cost concepts of prevention and evaluation as costs
quality can be better understood volunteers, as they can be controlled by
they are usually classified. The following addresses company decision and the costs of failures
if this classification. internal and external as involuntary costs.
CORAL(1996) says that investments in
quality, to justify themselves, must bring
3.1 Classification of Quality Costs return to the organization. Thus, the
quality programs must be guided by
In literature, there are several
measures that provide support to transform
classifications for quality costs.
losses in productivity gains and
According to ROBLES JR. (1996), the costs of
profitability. As a result, citing
quality can be grouped into categories
CORRADI defines two categories for costs
that interrelate. Generally, the application
the alocation of resources in a category leads to of quality: acceptable quality costs (that
they are the ones that the company plans to spend
variations in the amount of costs in another.
NAKAGAWA(1993) mentions that in the area unacceptable quality costs (those that
There are three important aspects of measurement. the company wishes to eliminate or avoid.
dimensions that must be considered in The work of CRC-SP (1995) classifies costs
quality accounting. The first would be the of quality in direct and indirect. The direct
compliance with the specifications, which were split into two versions: control
(which includes prevention and assessment) and failures
consists of collecting data and information about
the costs associated with the activities of (divided into internal and external). As for the
reprocessing, generation of scrap, indirects encompass the clients, the loss of
warranty service and others, that occur reputation and dissatisfaction.
during the manufacturing processes and that TOWNSEND(1991)adoptsfourcategoriesof
continue even after the delivery of quality costs: prevention, which refers to
product. The second dimension would be regarding the training in new procedures and tests
product design with quality, which consists of of systems; detection, which encompasses reviews
to develop projects that ensure the regarding the balance of work and control;
manufacturability of the product and that emphasize correction,includingreviewofincorrectworks
the importance of the engineering function in and the repetition of computer processing;
design products in such a way as to minimize or and failures, that is, "corrective activities"
prevent quality issues. The third and resulting from errors, delays, and mismatches, which
the last dimension relates to prevention require corrective action, repetition of work and/or
of defects, which consists in the implementation of special explanations, but when, in addition,
principle of 'doing things right at the item was received by the final customer.
first time of the Philosophy of Excellence Regarding the classification of costs of
Business, in order to prevent the occurrence of quality, FEIGENBAUM (1994) does it in two
defects during all stages of the process large groups: the costs of control and the costs
of manufacturing. of failures in control. These groups
SAKURAI(1997) segregates the costs of we then subdivide into segments. The costs of
quality in three types: costs incurred for control is segregated into prevention costs
achieve an environment where employees and the costs of the evaluation, while the costs of
can work efficiently; costs control failures are separated into costs of
incurred by the expectation of failures, which internal failures and external failure costs.
would cover the costs of prevention and inspection JURAN & GRYNA (1991) corroborate the
or evaluation; costs incurred due to failures division of quality costs into costs of
occurred (costs of internal failures and prevention, evaluation costs and costs of
externally). It also classifies the costs of internal failures and external failure costs.

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 In the same vein, CROSBY (1994) only origin will be ten dollars in terms of
it differs from Feigenbaum's classifications evaluation and failure costs. It is important to emphasize
and they swear to encompass both categories of failures that investments in prevention do not
in one only and maintaining the others. they bring immediate gains in terms of
It remains that, even with distinctions between the economy in the other categories but the
cited authors, the classifications of costs of results reflect over various years.
qualities found in the literature tend to The interaction is also evident in the case of
summarize in prevention costs, costs of investments in evaluation and their influence on
evaluation and costs of internal and external failures. internal and external failures. By directing resources
Therefore, it is necessary to define them appropriately. for evaluation tend to increase costs
Prevention costs are all costs related to internal failures, by the greater
incurred to prevent failures from occurring. Such number of items inspected, while
costs aim to control quality thecostsofexternalfailuresarereduced.
Thelogicofthisinteractionliesinthefactthat,withinspection
of the products, in order to avoid expenses
resulting from errors in the production system the more accurate, the more defects are detected
(CORAL, 1996). The evaluation costs are the previouslytothedispatchfortheclient.
expenses with activities developed in
identification of units or components 4 Comparisons and Comments on the
defective before shipment to customers Quality Cost Concepts
internal or external (CRC-SP, 1995). The costs
the external failures are associated with Several authors have focused on the association of
activities resulting from failures outside of values for obtaining and managing quality
manufacturing environment. As external failures, however assigning degrees of importance to
costs generated by problems are classified presentation of these values that fluctuated to
events that occurred after the product delivery to the customer more or less. Also the various
(ROBLES JR., 1996). concepts about related quality costs
Regardingthecostsofinternalfailures, above show different views between the
canbedefinedasthosecostsgenerated authors. These conceptual discrepancies are
for defects that are identified before the commented on below.
productorservicereachesthecustomer(OSTRENGA,
1993). In other words, these are the costs incurred due to
some error in the production process, whether due to a failure 4.1 Views on Quality Costs
human or mechanical failure. The sooner they are
The existence of distinctions between the
detected, the lower the costs involved
the approaches of some authors remain undeniable
for your correction. with the comparison between the conceptions of
There is an interaction between the four.
respect for the cost of quality by Joseph M.
categories mentioned in the sense that they are
Juran, W. Edwards Deming and Philip
influenced by others. Invest resources in
Crosby. Such authors form a select group.
prevention, for example, enables a
of American specialists and are
maintenance or improvement of quality and,
considered, according to ROBLES JR. (1996),
concomitantly, it brings the reduction of costs
CARAVANTES (1997) and by various authors (by
of quality. SHANK (1997) cites an example of
example, H. S. Gitlow, J. Teboul, J. Oakland, J.
company that voluntarily changes the mix
Dotchin, D. Garvin, P. Scholtes, J. Finnigan
on the costs of quality, doubling the expenses
like the American quality 'gurus'.
with prevention and assessment, was able to reduce
The following presents the visions of these
the costs of internal and external failures more
three authors on quality costs, according to
of 80%. It also reports that for every dollar spent
OAKLAND(1994):
by the company in prevention, the economy

80
 Deming: there is no best - the better - the respective threats to sales. They say that
Raising is continuous. some costs of poor quality arise only
Juran: quality is not cost-free after the sale and what portion of these costs is paid
there is a great one. by the manufacturer in the form of warranty expenses,
Crosby: cost of non-conformity - the complaints, etc.Arched or not by the manufacturer,
quality has no cost. these defects raise costs for the
consumer due to time out of use or
MANN(1992) relates the 14 points of other inconveniences. The cost analysis of
Deming,oneofwhichreferstocosts.Inthis manufacturer complemented by the research of
point, Deming advocates for improvement market on the costs of poor quality for the
constantly and definitively the system of the consumer can highlight vital areas of
production and service, to improve quality costs, leading to the identification of the problem.
and productivity and, thereby, decrease The most pronounced divergence between Juran and
constantly dark. Deming considers that Deming argues that there is no point.
the study and assessment of quality costs greatintermsofqualitycosts,while
are unnecessary, as it states that it is something that
he considers the possibility of this point
it pays for itself. (ROBLES JR., 1996). great. Figure 1 shows what JURANeGRYNA
DEMING, cited in CARAVANTES (1997), (1991) referred to as the optimal zone in the model
argue that quality is an improvement of the cost of quality, weaving several
continuous, with no point that can exist then comments about it.
to be considered excellent in terms of costs The figure divides the total cost curve of the
of quality. quality in three areas. The area you are in
AccordingtoSHANK(1997),thefundamentaldogma
a company located can, generally, be
from Deming's perspective on quality, it is that the identified through the predominant indices
costs of non-compliance and the resulting loss of quality costs, in the main categories
the client's trust is so high that it becomes as follows.
unnecessary to measure the costs of the quality improvement zone
quality. When judging that the focus on the evaluation of it is the left part of the figure. The characteristics
costs of quality and in the pursuit of optimal levels notable are the fact that costs of
by default it is a proof of the failure to understand failures account for 70% of the total costs of
the problem, Deming aims to achieve zero defects. quality, while the costs of prevention
In turn, JURANeGRYNA (1991) said- are below 10% of the total. In this case,
dear appreciable space in your works for the there are opportunities for the reduction of
investigation of quality costs, deepening-
total costs for quality improvement of
in the methodology of investigating these. They cite
compliance. The way is to identify projects
three main objectives that lead companies
specific improvements and follow them to
the evaluation of quality costs. The first
it would be to quantify the size of the problem of improve compliance quality and, with
quality in a language that has impact this, reduce the costs of poor quality,
about higher administration, arguing especially the costs of failures.
that the language of money is intelligible to all a "high appraisal cost zone"
the hierarchical levels. Another objective would be on the right side of the figure, is generally characterized by

identify the main opportunities for due to the fact that the evaluation costs exceed
reduction of costs of poor quality, taking into account the costs of failures. In such cases there is
view that, having found the origin in some cause also an opportunity for cost reduction.
specific, it becomes easier to try to eliminate or This can be done as follows:
minimize these costs. They also mention the a) comparing the cost of detection of
possibility of identifying the opportunities for defects with the damage caused if they
decrease in consumer dissatisfaction and not detected;

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 FG
IURE1-OPTM
I ALZONEN
ITHECOSTOFQUALT
IYMODEL

COST CURVING
T
O
T
AL
QU
AT
Y
L
I

Great

Zone of Improvement Project Indifference Zone Highlands Area

Assessment Costs

Failure costs > 70% Cost of Failures - 50% Failure Costs < 40%
Prevention < 10% Prevention - 10% Evaluation > 50%

If no interactive project Study the cost per defect detected,

can be found, move verify the validity of the standards; reduce
emphasis for control inspection and attempt audit of the decisions.

← 100% defective Quality of Compliance 100% Good→

SOURCE:JURANandGRYNA(1991)

b) examining quality patterns competing with other projects pays off

to see if they are realistic with pain, which has not yet reached the levels
regarding the suitability for use; considered ideal.
c) checking if it is possible to reduce the volume JURANeGRYNA (1991) states that the model
from inspection through sampling, it is conceptual and illustrates the importance of a value
based on the knowledge of quality compliance ideal for many
process capacity and order of industries, considering that, in practice, the data
manufacturing; and still, to build the shown curves are not
d) I see if it is possible to avoid duplication available. They argue that the improvement
ofinspectionusingdecisionauditing. quality of compliance implies a
The 'zone of indifference' is the central zone of decrease in costs over most of
figure. In this area, the costs of failures are of the horizontal spectrum. Such a statement contradicts
approximately half of the costs of the belief that high quality necessarily
quality, while those of prevention are requires high costs.
approximately 10% of quality costs. Another point highlighted by these authors
In the zone of indifference, the ideal was achieved in it's that the reduction in cost towards the point
terms of compensatory projects of ideal can be achieved from the zone of
improvement of quality. More is possible improvement as well as starting from the
improvement, however the projects are high cost assessment area.

82
 They also point out that they are located in the area. analysis of quality cost after it has begun
of improvement the companies that have not yet the formal quality management program, in
they made effective efforts in improvement sense of informing the company about the
ofquality.Inthesecompanies,theopportunities the progress of the same.
of cost reduction are in the projects for
improvementofcompliance.Theyconcludethatthecriterion
mostimportanttoevaluatewhethertheimprovement
4.2 Discrepancies between Conceptions
the quality reached the economic limit is
Japanese and American
achieved by comparing the benefits Another interesting comparison relates to
possible specific projects with costs the distinct visions found in Japan and in
involved to obtain these benefits. The point United States about quality costs.
great is achieved when there are no more SAKURAI(1997) identifies different
justifiable projects. perceptions of quality costs among
Crosby, like Deming, also established Americans and Japanese. It says that, generally,
some points for companies that want American researchers consider that the
adopt a total quality program and, in these the cost of quality is the cost of conformity to
factors that relate, attribute significant specifications. Citing some authors
importance of quality costs. Americans, he attributes this to the greater ease that
CROSBY (1994) states that the calculation of cost
the accountants have to determine costs of
of quality is a tool to attract the compliancewiththespecificationsofwhatothertypes
management attention and provide a basis for of quality costs, enabling the
calculation to verify the improvement of quality. administrators to focus on units
Itisemphaticabouttheimportanceofcalculatingthecost
defective, which have added value.
of quality by asserting that "This calculation is the On the contrary, the Japanese prioritize what
the only key you will ever possess to help Sakurai refers to as 'market quality', or
your company to implement correctly the be, the difference between the needs of
Quality Management market or consumer and the specifications
Crosby still holds equal importance in calculation. from the product design. The 'market quality'
of the cost of quality and the establishment of is considered multidimensional, encompassing
quality indicators, arguing that through compliance with the specifications, suitability for
Both are aware of the current state of quality. use, functional performance, brand name
within the company. For ROBLES JR. (1995), the reliability, durability, ease of
importance that Crosby assigns to the Costs of maintenance, security, and ease of use.
Quality probably comes from your In Japan, it has been established that administering
experience in the implementation of Systems of the cost of quality in the stage of
Quality in various companies. development is a fundamental activity,
SHANK (1997) asserts that Crosby, like although the quality control activities in
Deming believes that the cost of quality will be the production stage is also indispensable.
minimized by 'doing it right the first time' See. It is worth noting that, even in the states
defending that the goal of any operation United, the ideas of what constitutes the cost of
must be zero defects. Crosby identifies with quality has been rapidly modified.
Juran when admitting the necessity of measuring Another distinction pointed out by SAKURAI
the costs of quality, diverging, however, in (1997) refers to the fact that literature
point at which Juran advocates for cost analysis American accounting is concerned with the issue
quality as a control tool about whether there is a relationship between costs of

managerial. Even so, although Crosby rejects prevention and costs of achieving quality
the notion of current measurement systems of , and if so, what is the break-even point?”
cost of quality, he believes it is useful to make a the author comments that most of the articles about

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quality in American accounting publications investment for quality maintenance.
focus on the assessment and evaluation of the cost of Regarding the costs of internal failures, to
quality, worrying about the relationship contrary, they measure only a portion of the
existing between quality and cost structure consequences of poor quality in the internal sphere
involved for that. of the company.
Sakurai reveals that this concern in JURANeGRYNA (1991), when they conceptualize
Japan did not receive such importance as quality costs, they assert that these are
the Americans gave. Points out three reasons for associated with the failures in production that
this little interest on the part of the Japanese, lead to rework, waste, and loss of
one of them being the success achieved in productivity, non-existent if the production were,
evolution of quality in oriental products perfect the first time. This vision restricts the
there may be less need for clarification amplitude of quality costs, as this
of quality costs. Another reason would be in the form, the costs of assessment and prevention do not
fact that Japanese managers they could be considered quality costs,
they prioritize directing efforts towards achieving high performance
since neither of these two types constitute
quality, instead of thinking about the existence of rework, waste, and loss of productivity.
an optimal point of balance between costs of Another aspect that deserves to be highlighted is
prevention and restoration of quality. By as activities increase
Finally, it notes that little research is conducted. preventive measures, the costs of failures decrease, as
in the area of quality costs in Japan, except that the number of detected failures is reduced
due to the work of some academics, there being before delivery to the customer. How this greater
few references on the subject in the literature prevention implies costs, at a given moment
Japanese technique. in order to reduce quality costs in the short term
A characteristic of the Japanese approach, deadline, the administration may be tempted to
according to SHANK (1997), they define reduce preventive activities. At the same
quality as uniformity in relation to time, if you want to avoid costs with failures
target, aiming for continuous improvement in internals, may deliver products below the
search for perfection. The Japanese use cost standards to the client. If regularly maintained
of quality in a manner similar to Crosby, that is, this situation leads to an increase in costs
to direct the action. The basic notion of external failures, with customer dissatisfaction
The Japanese approach can be expressed and quality costs are higher in the long run.
metaphorically, quality is a deadline. Another implication would be regarding the
journey instead of a destination and that the improvement image of the product/company and its effects on
quality is a fundamental lifestyle, terms of future profitability and its maintenance
not just a business goal. in the market.
It is understood, then, that the information of
quality costs alone do not lead to a
4.3 Comments on the Concepts of quality improvement, given that this limitation
Quality Costs isgenericforanytypeofinformation.These
examples consist of erroneous forms of
In addition to the different concepts addressed,
manage quality costs and serve as
for some concepts of quality costs alert regarding the interpretation that should be given to
comments fit. For example, FEIGENBAUM
informational potential arising from these reports.
(1994) classified the costs of quality into
About the insertion in a certain
control costs and failure costs. How much
category, not all quality costs are
to the costs related to evaluation and fit properly into one or the other of these
prevention, which are considered in the definition of
categories. In the case of the cost related to the
Feigenbaum as control costs, actually inspection of the raw material can be seen as
these do not measure quality. They measure, yes, the
as an evaluation cost due to the search for

84
defects. However, it could be classified as effective? Difficult to quantify, the effects of this
cost of prevention when considering that it could cost types remain for a long time and
serve to prevent defective raw material causing considerable damage to the company both in
ruin the production process. In this way, image terms, how likely in
the classification into one category or another makes profitability terms. In economic terms
is relatively arbitrary. In the same way, these costs are probably much higher
how to classify the salary of the worker who also that the costs of internal failures.
inspect your own work, in order not to
pass it on with defects to the later phase of
production? What portion corresponds to the costs of Conclusion
quality and what about production costs?
Due to its importance in terms of
Still about the cost categories of informational potential and the possibilities of
quality, literature has already consecrated reduction of expenses, the manager's attention should
mentioned (inspection, evaluation, failures be directed to the measurement of costs of
internal and external failures). However, this structure
quality, especialy with the flaws
it does not necessarily need to be adopted by (internal and external), given your participation,
company. When defining the cost of quality generally high, in the total costs of
for a certain company, it is necessary to have in
quality. In this sense, FEIGENBAUM (1994)
the categories that most conveniently it is reasonable to assume that the costs
apply to the organization. The selected relationship arising from failures can represent in
should be discussed internally to perhaps around 65% to 70% of the cost of quality,
add categories, improve the designation, highlighting the importance that it should be
define your components or criteria for imputed. Subsequently, due to the possibility of
classification in the appropriate grouping. Even identification of improvement opportunities
considering interesting that the classifications aiming to minimize or eradicate these failures.
they are homogeneous across all companies (the The costs of poor quality do not exist
which would allow comparisons), is much more uniformly throughout the company; result
important to adjust the classification to from some specific segments, each one
specific needs of the company than the originating from a specific cause.
conformity to what is stated in the literature. These segments are unequal in amplitude
As for the costs related to failures and in many cases a relatively part
external, despite its importance in small ones contribute to the greater volume of the
determination of the total cost of quality, the costs. Through analyses, for example by
the greater difficulty in measuring them lies in the fact Pareto's graphical method, the company can
that many of these costs are intangible, prioritize the failures that consume the most
complicating its measurement greatly. How resources, in the sense of directing correctly
measure correctly, for example, sales the investments for quality improvement.
losses, customer dissatisfaction and service This creates the possibility of eliminating or reducing
the complaints from customers? Similarly, the spending on inspections at points where not
how to quantify measurement in financial terms problems occur or that happen only
of the level of quality in relation to satisfaction of the occasionally. Already at the points where the
consumer regarding the average waiting time failure frequency is more pronounced, the
to the client, to the percentage of deliveries made inspection procedures must be more
on time? Still, how to measure the cost of the impact to consistent. Thus, it provides a
company's reputation with a customer most appropriate sizing of resources
dissatisfied with the product and its possible influence destined for inspection activities.
alongside other potential clients or consumers

85

Rev. FAE, Curitiba, v.3, n.2, p.77-88, May/Aug. 2000

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