Increasing the visibility of hidden failure costs

Krishnan, Suresh Kumar

doi:10.1108/13683040610719290

Cited by 38 publications

(28 citation statements)

References 13 publications

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“…Most often they could be identified when discrepancies, defects, spoilage and similar defects appear when customers use the product and which became known to organizations because of the customers' claims, activity of warranty services, and costs of product replacement. Krishnan (2006) divides external failure costs into two groups. Into the first group of external failure quality costs the author includes the costs that are related to delivery of the product to customer and period of warranty service.…”

Section: Classification Of Quality Costsmentioning

confidence: 99%

The Quality Costs Assessment in the Aspect of Value Added Chain

Daunorienė

Katiliūtė

2016

QIP Journal

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Purpose: The main purpose of this paper is to focus on the quality costs influence direction and intensity on the added value in the aspect of value chain.Methodology/Approach: The article is based on a nomothetic point of view that includes three modules: conceptual, hypothetical – deductive and inductive methods. To formulate theoretical aspects of quality costs evaluation, comparative and chronological analysis of scientific literature is used. Empirical results of the research are obtained by applying method of expert evaluation.Findings: During expert evaluation procedure is identified and selected significant quality costs elements. It is a useful tool to identify quality costs thought value chain processes. Created model of quality costs assessment in the aspect of value added chain is based on identification and classification of quality costs elements and allows to measure and to evaluate influence of quality costs, its direction and intensity on the added value.Research Limitation/implication: The formulated model of quality costs assessment in the aspect of value added chain is assigned to the models that “are oriented towards the situation”, i.e. diverted towards organizational analyses.Originality/Value of paper: The paper complements the gap between theoretical and practical framework of determining influence of quality costs on added value and proves importance of the assessment of quality costs elements in the aspect of added value chain.

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Section: Classification Of Quality Costsmentioning

confidence: 99%

The Quality Costs Assessment in the Aspect of Value Added Chain

Daunorienė

Katiliūtė

2016

QIP Journal

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“…Portanto esses custos não podem ser esquecidos pela administração nas tomadas de decisões (PARRA-ACOSTA; PENÃ-GONZÁLEZ, 2014). Krishnan (2006) frisa a importância de entidades empresariais conhecerem e compreenderem a implicação dos Custos e Falhas Ocultas, e seu impacto nos processos de negócios. Informa ainda em entender os métodos de mensuração de custos existentes na organização, e calcular o custo abrangente de fazer negócios, abrindo caminhos para melhoria de processo, compreensão do escopo do trabalho, agilidade e desempenho, intensificação de cliente interno, e focando na melhoria da satisfação do cliente externo principalmente.…”

Section: Custos Ocultosunclassified

Identificação e mensuração dos custos ocultos em uma empresa fabricante de turbinas automotivas

et al. 2018

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O objetivo da presente pesquisa foi verificar quais fatores e operações poderiam ser apontados e mensurados em uma análise dos Custos Ocultos. Para que o objetivo fosse alcançado, realizou-se um estudo de caso, descritivo e qualitativo, em uma empresa do setor metal mecânico fabricante de turbinas automotivas. Inicialmente, alguns dados referentes à produtividade das máquinas analisadas foram coletados, e posteriormente colocados em planilhas para conseguir quantificar os Custos Ocultos presentes nos processos analisados. Um referencial contemplando teorias sobre contabilidade de custos, gestão, gestão de custos e propriamente sobre os Custos Ocultos, deram base para os assuntos envolvidos no decorrer do trabalho. Com a realização da pesquisa conseguiu-se identificar diversos valores ocultos, que foram elencados e quantificados. Todas as análises feitas foram voltadas para o quanto a empresa deixou de faturar pelo fato de estarem ocorrendo falhas nos processos, e também os valores ocultos que acompanham o Custo dos Produtos Vendidos (CPV). Foram realizadas comparações entre os valores buscando a compreensão acerca do surgimento, do impacto gerado e do destino final dos Custos Ocultos. Dentre os principais achados da pesquisa, verificou-se que os valores que a empresa deixou de faturar nos doze meses estudados representaram um valor expressivo em relação ao faturamento total da empresa.

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“…Despite now quality costs in worldwide practice are usually divided according to P-A-F model presented by Feigenbaum and Juran, the model is being criticized by different authors for few reasons. One of them is that the original P-A-F model doesn't include hidden failure quality costs (Yang, 2008;Krishnan, 2006;Tsai, 1998;Modarress & Ansari, 1987). Dahlgaard, Kristensen & Kanji (1992) stated that when using traditional PAF classification, part of poor quality costs remains unevaluated and offered to distinguish quality costs into visible and invisible (hidden).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Hidden Costs in the Evaluation of Quality Failure Costs

Snieška

Daunorienė

Žekevičienė

2013

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In modern global market organizations striving for survive and successful compete have not only to satisfy needs of customers but to perform it with the least costs. Specialists of quality management determined that quality costs make a big part of total factor costs, taking about 30 % (Srivastava, 2008). Reducing of quality costs allows reducing of total organizational costs that would result in reducing of price of goods manufactured or services supplied, increase of customers' satisfaction or improved oeganization performance (JuranOrganizations that have prepared the programs of quality costs accounting adapted to their specific activity and paying more attention to implementation of quality programs, can identify, set in underlying order, evaluate and select quality investments more easy (Bottorff, 1997). Also quality costs programs allow calculation of return of investment to quality, help to find out how development is going (Gray, 1995), determine where highest costs appear and allow to find out what is the loss due to poor quality (Bottorff, 1997). Unfortunately, many organizations don't know their quality costs (Yang, 2008). Between the reasons determining the absence of quality costs accounting in the organization, following are indicated: use of many types of different accounting systems (Harry & Schroeder, 2000), traditional costs accounting systems are not adapted to identify quality costs data (Chiadamrong, 2003), lack of adequate methods to determine the results of poor quality (Chen & Yang, 2002). Studies performed by Viger & Anandarajan (1999) show that organizations that are calculating and analyzing quality costs, are making efficient decisions more often than those not calculating quality costs. Having calculated the loss due to poor quality and determined where its appearance is the largest, organizations can make decisions allowing optimization of quality costs. While optimizing quality costs, benefit increases (Fine & Charles, 1986;Freiesleben, 2005). Also, optimization of quality costs is a condition necessary to survive and anchor in the market. Quality costs programs were implemented and used worldwide (Carr, 1992; Schiffauerova & Thomson, 2006a). However, both the scientific literature and enterprises' practice still are having questions how to calculate all constituents of categories of quality costs in details in striving for maximal benefit from the system of accounting of quality costs. In the article there is discussion about the problems of quality costs accounting in striving for detailed calculation of all quality costs, a problem of lack of hidden failure quality costs accounting methodology analyzed, a review of literature on quality costs accounting models presented, the studies performed by other authors discussed, suggestions how to calculate hidden failure quality costs presented. An empirical study was performed in Lithuanian organization where methodology of accounting of constituents of hidden failure quality costs was tested.Keywords: external failure quality costs, e...

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Increasing the visibility of hidden failure costs

Cited by 38 publications

References 13 publications

The Quality Costs Assessment in the Aspect of Value Added Chain

The Quality Costs Assessment in the Aspect of Value Added Chain

Identificação e mensuração dos custos ocultos em uma empresa fabricante de turbinas automotivas

Hidden Costs in the Evaluation of Quality Failure Costs

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