This case study investigates how to calculate the cost of quality. It is based on a real-life situation in a kitchen manufacturing company where one machine generates a lot of problems for the business. Pretty Kitchens Limited is a manufacturer of high quality fitted kitchens. The two main product types are flat-pack DIY self-assembly kitchen units and contract kitchen units (pre-assembled). The company is currently having problems with creating a fittings/components pack for the flat pack self-assembly kitchen units. The automated bag-filling machine is less than perfect and there are several different types of fitting/components packs for the various types of unit.
The case is aimed at students on operations management courses. The authors provide vital information on the types of cost of quality which people have to deal with from day to day in a manufacturing context. They cover the essential areas of control costs and failure costs. They also includes many worked examples analysing internal costs of quality.
The authors examine the additional costs of ordering extra components or sending out replacement bags. They also investigate essential external costs, such as managing complaints and ensuring customers are satisfied. This case presents new and innovative ways of reducing the costs of quality and lots of worked examples which will be of use to anyone tackling these kinds of difficult problems in their study or work.
Mike Simpson is a Senior Lecturer in Operations Management on the MBA programme and Operations Management and Supply Chain Management on the MSc programmes at The University of Sheffield Management School.
Dr Andrea Genovese is a Lecturer in Logistics and Supply Chain Management at the Management School of the University of Sheffield. He is also a member of the Logistics and Supply Chain Management (LSCM) Research Centre and Centre for Environment Energy and Sustainability (CEES).