A framework to implement QCS through process cost modeling

Abstract

Purpose

The purpose of this paper is to describe a structured framework to implement and sustain a quality costing system (QCS) based on process cost modeling (PCM) in process industries.

Design/methodology/approach

After reviewing and analyzing various cost accounting methodologies practiced by companies the research objectives were achieved by acknowledging the need to attach fuzziness to notion of “quality”. The imprecise, vague, and complex information related to cost items under Prevention, Appraisal and Failure (PAF) segments is synthesized using well‐established fuzzy principles. A case based approach from process industry is discussed to implement and sustain quality costing system after prioritizing the processes.

Findings

While conforming on the results of prior research on practice of quality costing approaches and the problems faced by the companies in implementing a quality management system the fuzzy approach (owing to its sound logic and effectiveness in identifying the vagueness and imprecision in human judgment) is successfully applied to elicit expert opinion regarding the importance of cost items. The information so obtained after fuzzy synthesis is used to set up priority with respect to the processes which can provide necessary help to managers/practioneners to invest efforts in reduction of cost of non‐conformances (CONC) and optimal allocation of resources.

Practical implications

The approach discussed in the paper will be helpful to managers; quality practitioners to set up/improve various quality improvement initiatives for successful implementation of quality costing system.

Originality/value

The framework discussed in the paper provides a novel approach to implement QCS by using PCM after judicious selection of the processes and cost items.

Citation

Sharma, R.K., Kumar, D. and Kumar, P. (2007), "A framework to implement QCS through process cost modeling", The TQM Magazine, Vol. 19 No. 1, pp. 18-36. https://doi.org/10.1108/09544780710720817