For this report it has been decided to adopt a manufacturing company namely Toyota. This paper will cover the theoretical assumptions of quality management and simultaneously will demonstrate that how Toyota has applied all these assumptions in its business processes (Deal
In the recent past, quality has gained prominence as the organisations experienced the high cost of poor quality. According to the scholars of the quality management, all the aspects of the organisation are affected by quality and therefore it has dramatic cost implications. Basically cost to quality can be broadly categorised under two heads namely cost of conformance and cost of non-conformance. The first type of cost is incurred to prevent the second one.
After Prius recall, management of Toyota has decided to implement new quality plan. Among those, the most important is the developing of the communication plan. They have a plan to open up a regional customer research centre for collecting customer’s queries and for resolving them.
Appraisal Cost: Primarily appraisal costs are incurred to ensure that the defects do not reach to the customers. It consists of a cost of assessing suppliers, inspections of incoming and outgoing materials, product testing and performing audits.
Toyota has been crediting the ‘Quality Cost Delivery’ (QCD) award to their suppliers whose cost, delivery and most importantly quality exceeds 95% standard of excellence. The management of Toyota evaluated the suppliers on the basis of the rejection rates on the basis of parts per million (PPM).
Internal Failure Cost: It has been associated with all those events which are employed to determine the poor product quality before delivering to the customers. It consists of rework for modifying the defects and losses of material. Even it also includes cost of scraps which refers to the defective products that cannot be corrected