Theory defines four quality category costs:
internal flow costs
external flow costs.
Prevention and assessment costs can be considered as investments for preventing and verifying the non-conformity; they are also generally defines as quality costs.
Non-conformity costs (internal and external flaws) are classified as losses and are globally indicated as non-quality costs. Total-quality and non-quality costs represent the overall quality cost born for reaching a certain level of conformity for the products and services to be manufactured or delivered.
The implementation of a program for identifying and managing a Company’s quality costs is due to the management’s commitment and to the involvement of the most directly interested functions (management and quality control).
The development stages of a program are:
identification of costs elements,
gathering and analysis of data,
reporting to the management, which has to define the objectives and strategies for improvement and to assess the results.
The first goal is creating a tool for monitoring and assessing an organization’s overall efficiency, placing typical aspects of quality in the global operational context of management control.