Economics of quality/grade

publication date 23.04.2012

Tree diagram showing enhanced economics of quality as per ISO 10014

The economics of quality is a methodology designed to have organizations enhance the customer satisfaction while cutting the costs at the same time. The methodology is supported by the ISO/TR 10014 international standard: Quality management guideline. It guides the management to achieve their entrepreneurial intent while they continously increase the productivity. 

The economics-of-quality methodology is focused on finding the most adequate way to control the costs while working on the fulfillment of the company´s entrepreneurial intent. It lays great stress on :  

  • satisfaction - loyalty of the customer
  • trust in the company
  • reputation of the product 
  • company image

It extends the basic quality management system with the economic objectives. It follows the short-term objectives and the long-terms ones, while continuously evaluating how they are being fulfilled.  

The methodology components include:  

  • performance of the costs analysis
  • costs of compliance and non-compliance
  • defining benefits to the customer  
  • factors leading to satisfaction, pleasure
  • critical financial impacts
  • opportunites identified 
  • management review
  • strong orientation towards performance 
  • costs monitoring
  • an so on.

 

 

Comments on the article

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„Rather than creating piles of documentation, it is better to draw a single scheme or picture.“ more >>

Jiří Střelec Jiří Střelec

And not just ISO, AS, OHSAS, CMMI  … but other standards, too, want us to describe what we do and how we do it. Most quality people and managers just produce pages of text which pile on the desk. Writing down a sentence is fairly easy. However, the sentence alone does not matter. What matters here is that people understand that sentence and use it in practice. Standards do not tell us how to describe our management system, though. Frankly, times are hasty and people have no time for reading piles of paper. They are bombarded by information from all sides. Besides, reading through a long document, they do not remember what was at the beginning. A picture or a scheme is faster to read and easier to remember. What if the system was created as an interactive model of schemes, pictures and supplementary text. Try to make out how.

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