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How do hidden costs increase the quality cost?

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Mar 30, 2010
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QUALITY COST
by: BUDS M. FERNANDO, Officer-in-Charge, Total Quality Management Group-Subic Bay Metropolitan Authority (SBMA)

Cost is always seen as a burden, but it does have to be that way.

Not all costs are an organizational burden, but there are several costs, like quality cost, that contribute directly or indirectly to the improvement of the company.

A similar situation is training and development cost, which is practically an investment in itself and not a financial burden.

The term "quality costs" has different meanings to different people depending on what perspective you are looking at.

An important cost & expense that is usually overlooked is lost sales due to poor quality, and this is technically called "hidden cost" because it is not easily measured.

To minimize any costs, it is very important to recognize that the management of any organization can be improved if the organization is considered a series of inter-related systems.

The systems approach suggests that internal management systems are both intra-related and inter-related with the environment of the organization.

Nov 17, 2010
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The Ultimate Price poor work
by: Humphrey Njue

While direct advertisement plays a great role in making any product or service of a certain organization known, the consumers of such product/ services plays even a greater role. Consumers may intentionally or unintentionally market the product/ services by recommending and/ or creating a niche for them, to other potential consumers. This reduces the advertisement cost and increases sales.
Poor quality products requires a great deal of effort to create a niche, through advertisements and promotions. And even if the popularity rises, the product/ service may be ultimately be shunned by the consumers just with a few trials. This contributes to loss of sales and the organisation may be unable to sell future products due to the its ruined reputation resulting from a previous poor quality ones.

Thus the swahili saying "Chema chajiuza, Kibaya cha jitembeza"

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