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Quality cost systems have evolved from a purely manufacturing defect related cost reporting system that reflected the limited quality thinking of the 1940s to a poor‐quality cost system that reflects the total process quality orientation of the 1990s. The new poor‐quality cost system includes both the direct and indirect quality cost. It addresses key concepts like customer encore cost, lost opportunity cost and non‐value added cost. The focus of the poor‐quality cost system has drifted away from the manufacturing process and now focuses on the total business systems that represent today’s biggest opportunity for improvement. Poor‐quality cost in functions like marketing and sales can exceed 100 percent of the organization’s total budget. This paper explains how quality costs hav evolved to keep up with the quality systems’ evolution over the past 50 years.

Most businesses would be happy to increase turnover by 10%, yet that is the scale of loss through poor quality revealed by projects in Swedish companies. And 10% may be just the tip of the iceberg.

The purpose of this paper is to investigate whether there are differences in terms of the effect of the ISO 9001 non-conformity process on the cost of poor quality in different sectors. In particular, to investigate the effect on six sectors of companies which manufacture their products mainly through machines and plant (i.e. capital-intensive companies). An additional aim is to understand what the reasons for these differences are and why ISO 9001 has limitations in reducing the different categories of costs of poor quality.

The paper is based on a questionnaire administered to a sample of 42 companies divided into six different sectors: chemical, pharmaceutical, mechanical, food, ceramic and steel. Respondents were asked to give a percentage score for the contribution the ISO 9001 non-conformity process makes to the reduction in total cost of poor quality and to its categories: scrap, rework, machine stoppage, re-inspections, rejected products and recall cost. A one-way Anova test was applied to the means of the percentage scores to determine whether there are differences between the means of the total cost of poor quality and its categories. Qualitative comments and suggestions from the companies provided information that helped explain the reasons for such differences.

The results of the research show that there is no difference within and between the sectors in the means of the total cost of poor quality and scrap cost, whereas there are significant differences in the means of the other costs of poor quality between the six sectors. The ISO 9001 non-conformity process has limitations in reducing the costs of poor quality and suggestions concerning the limitations of ISO 9001 in the Research and Development process emerge.

The generalizability of the research findings is limited because of the use of just six sectors of capital-intensive companies. Further research about differences in different sectors is needed.

The implications of this research are useful for consultants and managers who want to understand what the limitations of the ISO 9001 non-conformity process are on the cost of poor quality in the six sectors. The findings clearly show how, together with ISO 9001, they should take into account other improvement processes such as periodic maintenance and revamping.

The paper discusses in a quantitative way and for the first time the effects of the ISO 9001 non-conformity process on the cost of poor quality.

Reducing a company's non‐value creating costs — the cost of poor quality — is one of the best ways of increasing profitability and competitiveness. The potential is considerable. The cost of poor quality usually corresponds to between 10% and 30% of total turnover. But to realize the benefits requires detailed information about the magnitude and distribution of these costs that is often difficult to obtain.

Poor quality in building projects is high and increasing. Poor quality can increase the cost of a building by up to more than 50% and can delay a project by up to 50%. This research investigated the poor quality of building elements/components.

The site operatives were requested to rate the frequency of poor quality in 25 building elements/components. The frequencies of the poor quality were scored on a five-point Likert scale, ranging from least often to extremely often. The survey forms were administered to construction site operatives by hand delivery.

The data revealed that poor quality occurred in more than 80% of the building projects completed. Approximately 40% of the cost of a building project is attributed to poor quality. In total, 70% of the respondents measured the poor quality of building elements as being high and frequent. The size and frequency of poor quality are higher in concrete, plaster, brick, foundations and roof trusses.

The research findings would help to reduce claims, disputes, maintenance costs and waste on sites.

This research provides fresh information on poor quality in building projects and provides a systemic process for anticipating poor quality in building projects. The findings also provide an option to increase maintenance span and a means to reduce claims and disputes in the construction sector.

Measuring quality costs has been emphasized as an important part of quality improvement since the early 1950s. A chapter on quality costs seems to be almost compulsory in every book pertaining to total quality management, business process improvement, and similar topics. There is no doubt that measuring quality costs is useful in order to direct improvement efforts; the problem is that the concept is not as valid today as it used to be. While customer requirements and production systems have changed considerably during the last decades, quality cost measurement is advocated in nearly the same way as it was 40 years ago. This work presents a new customer and process focused poor quality cost model that enables the provider of a product or service to focus on elements that really matter to his customers. The input to the model is customer requirements and the output is expected poor quality costs estimated through the Taguchi loss function. Quality function deployment is used to translate the voice of the customer to key process parameters, that is process parameters having a direct influence on the fulfilment of customer requirements. The quality function deployment matrix is also used to estimate intangible costs. Traditional cost categories have been altered, and the expected loss for each cost category is estimated based on actual process performance and stepwise quadratic loss functions with multiple intervals. The intended use of the model is as a top management decision‐making tool able to link quality improvement to customer satisfaction and loyalty.

The purpose of this study, with its central thesis placed on excelling at business measures, is to underscore the need for business entities to understand the significant implication of hidden failure costs and its impact on their business processes. The study also stresses the need for organizations to systematically break the many norms.

This study looked at capturing the often‐overlooked component of poor quality cost via a simple function of measurement which requires an effortless yet painstaking way of collecting data pertaining to intangible wastages in the form of time, service charges and material.

A simple formula is introduced, using three types of indicators that could be used to monitor the level of poor quality costs (PQC), to quantify the total failure costs by accumulating the values of both hidden and visual failure costs.

The study breaks the boundaries of existing methods of understanding and calculating the all‐embracing cost of doing business, hence paving the way to make inroads in business processes improvement, enhanced job‐scope comprehension, agility and performance, further intensification of internal and external customer satisfaction.

The purpose of this paper is to present a report on the implementation of a quality cost program in a continuous‐process manufacturing company, with particular emphasis on the unearthing of hidden quality costs, as well as gaining a closer understanding of the resistance against implementation.

Using an action research approach, the researchers participated – directly and indirectly – in the implementation of quality costing at the case company. The research process comprises iterative cycles of gathering data through documentary reviews, observations of company operations, discussions with operatives, analyzing data, undertaking actions and evaluating results. Following Sandoval‐Chavez and Beruvides, the poor quality cost analysis includes an additional category to the conventional prevention‐appraisal‐failure model to reflect the cost of lost opportunities.

The study unearthed a significant portion of hidden quality costs which may be termed an “opportunity loss”. The findings indicate that the company's total quality costs actually far exceed its current profit margin, and that the company could improve its competitive position if it focused on the elimination of these quality costs.

This paper focuses on uncovering hidden quality costs. However, the measuring of quality costs only serves to identify opportunities for improvement. It is follow‐up corrective actions that will lead to organizational effectiveness. The research findings support the contention that tracking of poor quality costs is an important step in the quality management process.

This paper presents a proactive way of tracking hidden quality costs.

How much time and money should we devote to quality activities? Will the results be worth the resources which we invest? How can we calculate the return on our quality investments? These questions are raised by managers, clinicians and policy‐makers, but they are rarely answered, which may explain the loss of credibility of some quality activities. This paper gives examples of the cost of poor quality, describes and illustrates a simple method for quality costing, and discusses the economics of quality. It considers why there is little research and teaching about the subject, and proposes how managers and clinicians can take a more economically‐informed approach to quality in public healthcare.

Reducing a company's non‐value creating costs — the cost of poor quality — is one of the best ways of increasing profitability and competitiveness, yet ineffective measurement prevents many businesses realizing the benefits. In the second of a two‐part report on research among some of Sweden's largest companies, Lars Sörqvist describes some of the more effective methods they have pinpointed.