Quality Costing – The Money in Mistakes

Abstract

A pilot study was developed to test out quality costing techniques from industry and to apply them to the NHS. Quality costing is a method of evaluating and prioritizing the cost of resources wasted through not getting it right first time. The approach focuses on processes and systems rather than on individuals and avoids the temptation to apportion blame. The approach tested in the study involved: surveying staff experiences, mapping the activities of the hospital, attaching costs to key activities, establishment of the “opportunity costs” of problems identified on the survey and cost analysis. The results demonstrate that the frustrations or problems identified when evaluated as opportunity costs represented 5 to 10 per cent of total costs.

Citation

Maycock, J.A. and Shaw, T. (1994), "Quality Costing – The Money in Mistakes", The TQM Magazine, Vol. 6 No. 3, pp. 20-22. https://doi.org/10.1108/09544789410057845