The Quality Costs Assessment in the Aspect of Value Added Chain

Abstract

<p><strong>Purpose:</strong> 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.</p><p><strong>Methodology/Approach:</strong> 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.</p><p><strong>Findings:</strong> 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,<br />its direction and intensity on the added value.</p><p><strong>Research Limitation/implication:</strong> 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.</p><p><strong>Originality/Value of paper:</strong> 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.</p>

Future research avenues of cost of quality: a systematic literature review

“…This is in line with the study by Fraser et al (2015) who highlighted that the emphasis on empirical evidence is important for practitioners since it allows theoretical models to be evaluated in a real-world environment. Similar to the present study, Daunoriene and Staniskiene (2016) stated that a considerable amount of the quality cost literature has focused on quality cost implementation. However, Omurgonulsen (2009) mentioned that there have been many attempts to evaluate quality costs from both a theoretical and empirical perspective.…”

Practical implications of cost of quality: a systematic literature review

“…This comes as no surprise, as theory verification is always significant for academicians and practitioners, and real experience is always better than theory explanation (Raval et al, 2018). Consistent with these results, Daunoriene and Staniskiene (2016) inferred that a considerable amount of quality costs literature has focused on CoQ implementation rather than theoretically searching for answers to "why" issues. In a similar vein, Dimitrantzou et al (2020) stated that there is a prevalence of empirical research on CoQ, and a lack of purely conceptual studies.…”

“…The benefits of CoQ measurement are the following: reduction of total cost (Chiu and Su, 2010) and rejected pieces (Abdul-Kader et al, 2010); adoption of total quality management (Tsai and Hsu, 2010); improvement of quality systems (Dror, 2010) and organizational efficiency (Cheah et al, 2011); identification of quality levels (Chopra and Garg, 2011), management control systems (Luther and Sartawi, 2011) and improvement areas (Luther and Sartawi, 2011;Yoo et al, 2012); quality-related problem-solving (Yoo et al, 2012;Prashar, 2014;Sturm et al, 2019); management of expenses (Banasik and Beruvides, 2012); cost categorization (Banasik and Beruvides, 2012); cost savings (Teli et al, 2013); integration of financial indicators into the regular data analysis (Sedevich-Fons, 2013); competitive advantage of a company (Jafari and Love, 2013;Ozkan and Karaibrahimoglu, 2013;Ferdousi et al, 2019); continuous improvement (Mart ınez and Selles, 2015); efficiency of quality planning and control (Uyar and Neyis, 2015); increased profitability, financial results and market share (Chopra and Singh, 2015;Holota et al, 2016); quality improvement (Holota et al, 2016;Daunoriene and Staniskiene, 2016;Plewa et al, 2016); effective decision-making (Duarte, 2016;Barouch and Bey, 2018;Alglawe et al, 2019b); diagnosis of waste (Czajkowski, 2017); cost reduction opportunities (Czajkowski, 2017;Alglawe et al, 2019b); increased competitiveness (Psomas et al, 2018), quality of processes, products and services (Mitreva et al, 2018), business efficiency…”

New Quality Cost Framework (QCF) Based on the Hybrid Fuzzy MCDM Approach

“…The process cost framework has two segments that are cost of conformance (COC) and cost of un-conformance (CONC), and the quality term is treated as “conformance to customers' requirements.” The conformance cost is the cost involved in making certain things are performed right at the first time, which is similar to actual prevention and appraisal costs, while the un-conformance cost is the expenditure wasted when the work fails to conform to customer requirements, calculated by recognizing the cost of reworking, correcting, scrapping activities, which is similar to failure cost. Daunorienė has studied the COQ model from the value added chain perspective, which provided an effective way to evaluate the quality cost of the value added chain's procedures [ 47 ]. Teli et al has proven quality cost technique to be a significant tool to reduce total costs in the automobile industry without compromising quality, which presents a case study on failure cost analysis based on Crosby philosophy [ 50 ].…”