D
darkafar
TS clause 5.6.1.1 states, “Part of the management review shall be ……the regular reporting and evaluation of the cost of poor quality”
I’m a fan of Activity-based costing, so I don’t want to divide costs into difference categories, such as conformity or nonconformity etc. I only want to use one word –cost, the cost of activity, the cost of warehouse space, the cost of material, the cost of man hour, the cost of machine hour, the cost of delivery, the cost of yield etc.
I want to ignore RD activity cost, and focus my attention on the value-adding activities and necessary non-value-adding activities. I plan to assign a cost value to each activity, or material used.
For example, the sales department forecast we would sell product A some quantity a month.
To make this quantity of product A, we need warehouse space m square meter for raw material x, n square meter for raw material y, and machine hour, operator hour, delivery cost etc. I assign a cost value to them. (All control plan step costs, such as pressing, coating, inspection, sorting are included, but QFD, APQP, FMEA, training, auditing, management review cost are not included)
I also consider assigning a cost value to each yield value, and delivery punctuality, so that improving yield or delivery punctuality is also reducing process cost, and I don’t have to worry about returning goods, complaints, external failure etc.
I add up the above mentioned cost, and then divide it by product quantity. This would be the cost each individual product actually costs us, provided the manufacturing process has already been designed.
I prefer this way of computing cost because I think it can be used for the process designer to compare individual product cost to the customer-demanded cost. And it is also easier to understand for the Kaizen team.
But is it cost of poor quality? I could explain to the auditor that ISO doesn’t define what is COPQ, and I think that the process have improvement room is evidence that the process is poor, so the cost of the poorly designed process is COPQ.
Do you think the auditor will buy this? How do you think of my cost accounting?
I’m a fan of Activity-based costing, so I don’t want to divide costs into difference categories, such as conformity or nonconformity etc. I only want to use one word –cost, the cost of activity, the cost of warehouse space, the cost of material, the cost of man hour, the cost of machine hour, the cost of delivery, the cost of yield etc.
I want to ignore RD activity cost, and focus my attention on the value-adding activities and necessary non-value-adding activities. I plan to assign a cost value to each activity, or material used.
For example, the sales department forecast we would sell product A some quantity a month.
To make this quantity of product A, we need warehouse space m square meter for raw material x, n square meter for raw material y, and machine hour, operator hour, delivery cost etc. I assign a cost value to them. (All control plan step costs, such as pressing, coating, inspection, sorting are included, but QFD, APQP, FMEA, training, auditing, management review cost are not included)
I also consider assigning a cost value to each yield value, and delivery punctuality, so that improving yield or delivery punctuality is also reducing process cost, and I don’t have to worry about returning goods, complaints, external failure etc.
I add up the above mentioned cost, and then divide it by product quantity. This would be the cost each individual product actually costs us, provided the manufacturing process has already been designed.
I prefer this way of computing cost because I think it can be used for the process designer to compare individual product cost to the customer-demanded cost. And it is also easier to understand for the Kaizen team.
But is it cost of poor quality? I could explain to the auditor that ISO doesn’t define what is COPQ, and I think that the process have improvement room is evidence that the process is poor, so the cost of the poorly designed process is COPQ.
Do you think the auditor will buy this? How do you think of my cost accounting?
