Many companies are increasing their competitiveness through quality improvement.
However, a widely held view among quality practitioners is that companies simply do
not know the true total cost of quality, which are mostly hidden among the general
overhead of the business. This problem is often attributed to an inappropriate costing
system. Thus, any system that assisted companies in identifying and properly
quantifying these costs will be valuable. This research, therefore, was aimed at
developing a Quality Cost Information System for manufacturing industry, and to
show that such a system could provide a basis for analysing quality costs and
developing and evaluating the quality improvement process. A literature review of the
quality literature highlighted that the major problems that hindered potential users
from implementing an effective and efficient Quality Cost system were: current
quality cost measurement systems were limited by their inability to trace quality costs
to their source; quality was manageable only if it could be measured; quality cost did
not easily fit into the traditional cost accounting structure; traditional accounting
systems were unlikely to change radically to accommodate proper quality costing.
This literature review was complemented by an industrial survey aimed at identifying
knowledge of quality costing and current practices in manufacturing industry. The
findings of the literature review and industrial survey formed the basis for the
remainder of the study. As part of an integrated solution, three approaches have been
proposed and detailed:
1) A graphical model of quality costing in the form of a visual tool to facilitate the
introduction and communication of a quality costing information system within the
2) A proposed integration of Activity Based Costing tools with the theory of quality
costing to provide a system that can deliver valuable information.
3) A Software tool for the design of Quality Costing Information Systems. The thesis
concludes with the major findings and issues raised from the research undertaken.
This is followed by recommendations for the successful pursuit of the beneficial
implementation of the proposed quality costing system and tools along with several
suggestions for further work and future research potential.
A Doctoral Thesis. Submitted in partial fulfillment of the requirements for the award of Doctor of Philosophy of Loughborough University.