• Journal of the Korea Safety Management & Science
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• v.13 no.2
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• pp.185-193
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• 2011

The successful and sustainable growth of SMEs depends on their ability of strengthen their competitiveness in quality and cost and service more than anything else as a fundamental of operation. Among these key competitive factors of SMEs, quality is the most critical factor in manufacturing business fields. There are many different ways to improve the quality performance but it needs proper management decision to choose the best way what can maximize outputs with minimum inputs. And it needs effective measurement methods and some indicators to analysis the quality performance properly. The quality cost is one of the simplest key indicators to measure the quality performance and the effectiveness of quality related management decisions. In this study, through survey on local SMEs, we found that their average annual quality cost ratio versus turnover - total amount of annual quality cost divided by annual turnover - is around 3.69% excluded some SME's performances what have different quality control measures with others. And we found some results what corresponded with the early studies on the correlations between those categorized quality costs factors and some discrepancies between some of the literature model and the early case study results as follows. There were negative correlations between the Prevention costs and the External failure costs, and the Appraisal costs and the External failure costs, and there was positive correlation between the Appraisal costs and Internal failure costs same as early studies. But, we couldn't found any strong negative correlations between the Cost of control - Prevention costs & Appraisal costs - and the Cost of Failure of control - Internal & External failure costs -.

• Proceedings of the Safety Management and Science Conference
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• 2011.04a
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• pp.731-746
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• 2011

The successful and sustainable growth of SMEs depends on their ability of strengthen their competitiveness in quality and cost and service more than anything else as a fundamental of operation. Among these key competitive factors of SMEs, quality is the most critical factor in manufacturing business fields. Because quality strongly influence cost and service performance on this manufacturing business field. There are many different ways to improve the quality performance but it needs proper management decision to choose the best way what can maximize outputs with minimum inputs. And it needs effective measurement methods and some indicators to analysis the quality performance properly. The quality cost is one of the simplest key indicators to measure the quality performance and the effectiveness of quality related management decisions. The major purpose of this study is to diagnose the categorized current level of actual quality cost of local SMEs to maximize their quality management effectiveness through comparing their level with others what's expressed in early studies. In this study, through survey on local SMEs, we found that their average annual quality cost ratio versus turnover - Total amount of annual quality cost divided by annual turnover - is around 3.69% excluded some SME's performances what have different quality control measures with others. And we found some results what corresponded with the early studies on the correlations between those categorized quality costs factors and some discrepancies between some of the literature model and the early case study results as follows. There were negative correlations between the Prevention costs and the External failure costs, and the Appraisal costs and the External failure costs, and there was positive correlation between the Appraisal costs and Internal failure costs same as early studies. But, we couldn't found any strong negative correlations between the Cost of control - Preventive costs & Appraisal costs - and the Cost of Failure of control - Internal & External failure costs -. It reveals not only the lack of effectiveness on their preventive or appraisal activities but also it can reveal there were so many effective ways to prevent the failure costs properly such as some innovative investment on Factory automation includes Error Proofing and more preventive actions to improve the effectiveness of the typical management methods likes CE (Concurrent Engineering), APQP (Advanced Product Quality Planning), FMEA (Failure Mode & Effect Analysis) etc.

• Journal of Korean Society for Quality Management
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• v.23 no.2
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• pp.10-27
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• 1995

This paper illustrates a method of developing a function of quality costs in manufacturing systems. It begins with a discussion of the problem statement of this research. A review of existing literatures related to quality costs and economic design of quality inspection methods are discussed. Next mathematical models that quantify the production cycle time and quality costs are formulated. This paper ends with an example that demonstrates the usefulness of the model and highlights the importance of using a system approach. The main contribution of this work is the more realistic considerations of the four types of quality costs (prevention cost, appraisal cost, internal failure cost, external failure cost) in manufacturing systems.

• Journal of Korean Society for Quality Management
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• v.25 no.1
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• pp.1-16
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• 1997

In this paper, we illustrate how to design screening inspections for minimizing a total quality costs in a multi-stage manufacturing systems. The total quality cost model consists of inspection costs, internal failure costs, external failure costs, and Taguchi's loss function. Although, the use of automatic test equipment such as machnie vision and CMM has greatly increased inspection speed and accuracy, screeing(100% inspection) could be considered only as a short-term method to remove nonconforming items from a population, not for a long-term quality improvement. However, screeing should be used for certain situations such as before costly operations and after unsatisfied operations. This paper ends with an example that demonstrates the usefulness of the model.

• Health Policy and Management
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• v.11 no.2
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• pp.141-168
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• 2001

Healthcare service organizations can apply the cost of quality(COQ) model as a method to evaluate a service quality improvement project such as Total Quality Management (TQM). COQ model has been used to quantify and evaluate the efficiency and effectiveness of TQM project through estimation between cost and benefit in intervention for a quality Improvement to provide satisfied services for a customer, and to identify a non value added process. For estimating cost of quality, We used activities and activity costs based on Activity Based Costing(ABC) system. These procedures let the researchers know whether the process is value-added by each activity, and identify a process to require improvement in TQM project. Through the series of procedures, health care organizations are service organizations can identify a problem in their quality improvement programs, solve the problem, and improve their quality of care for their costumers with optimized cost. The study subject was a quality improvement program of the department of radiology department in a hospital with n bed sizes in Metropolitan Statistical Area (MSA). The principal source of data for developing the COQ model was total cases of retaking shots for diagnoses during five months period from December of the 1998 to April of the 1999 in the department. First of the procedures, for estimating activity based cost of the department of diagnostic radiology, the researchers analyzed total department health insurance claims to identify activities and activity costs using one year period health insurance claims from September of the 1998 to August of the 1999. COQ model in this study applied Simpson & Multher's COQ(SM's COQ) model, and SM's COQ model divided cost of quality into failure cost with external and internal failure cost, and evaluation/prevention cost. The researchers identified contents for cost of quality, defined activities and activity costs for each content with the SM's COQ model, and finally made the formula for estimating activity costs relating to implementing service quality improvement program. The results from the formula for estimating cost of quality were following: 1. The reasons for retaking shots were largely classified into technique, appliances, patients, quality management, non-appliances, doctors, and unclassified. These classifications by reasons were allocated into each office doing re-taking shots. Therefore, total retaking shots categorized by reasons and offices, the researchers identified internal and external failure costs based on these categories. 2. The researchers have developed cost of quality (COQ) model, identified activities by content for cost of quality, assessed activity driving factors and activity contribution rate, and calculated total cost by each content for cost for quality, except for activity cost. 3. According to estimation of cost of quality for retaking shots in department of diagnostic radiology, the failure cost was ￦35,880, evaluation/preventive cost was ￦72,521, two times as much as failure cost. The proportion between internal failure cost and external failure cost in failure cost is similar. The study cannot identify trends on input cost and quality improving in cost of qualify over the time, because the study employs cross-sectional design. Even with this limitation, results of this study are much meaningful. This study shows possibility to evaluate value on the process of TQM subjects using activities and activity costs by ABC system, and this study can objectively evaluate quality improvement program through quantitative comparing input costs with marginal benefits in quality improvement.

• IE interfaces
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• v.24 no.2
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• pp.128-138
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• 2011

This research proposes a resource allocation model of Data QC (Quality Control) activities using COQ (Cost of Quality). The model has been developed based on a series of research efforts such as COQ classifications, weight determination of Data QC activities, and an aggregation approach between COQ and Data QC activities. In the first stage of this research, COQ was divided into the four typical classifications (prevention costs, appraisal costs, internal failure costs and external failure costs) through the opinions from five professionals in Data QC. In the second stage, the weights of Data QC activities were elicited from the field professionals. An aggregation model between COQ and Data QC activities has been then proposed to help the practitioners make a resource allocation strategy. DEA (Data Envelopment Analysis) was utilized for locating efficient decision points. The proposed resource allocation model has been validated using the case of Korea national defense information system. This research is unique in that it applies the concept of COQ to the data management for the first time and that it demonstrates a possible contribution to a real world case for budget allocation of national defense information.

• Proceedings of the Society of Korea Industrial and System Engineering Conference
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• 2002.05a
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• pp.1-8
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• 2002

At present, company has to produce a product that consumer like with a competitive price, a good quality, and a fitting time to supply. Process control and qualify control are very important to supply with a product uniformly and inexpensively In this paper, the characteristic of product quality is monitored by control chart during the machining process and construction of quality control cycle is considered to divide into two types in this case that different assignable causes lead to shifts having different magnitudes. Then we are intended to find a process shift magnitude which has economical quality cost policy and are considered to quality cost functions to find a process shift magnitude. Those costs are categorized into the well-known categories of prevention, appraisal, and internal failure and external failure. This paper ends with numerical examples that demonstrate the usefulness of the model.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.21 no.9
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• pp.218-228
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• 2020

The material industry is an important infrastructure industry that uses process technology in order to produce parts applied to the final product and determine the quality of the finished product. However, the market environment, which has been recognized as a 3D industry, has deteriorated recently and lost competitiveness compared to other material industry countries. This study analyzed the characteristics of forging companies and The study found that three characteristics of the forging industry, facility-oriented, order-based, and field-centered, and internal failure cost and external failure costs were set as the range of quality cost. A total of eight quality tasks were selected by applying the quality cost management system and continuous quality improvement process developed for large-scale A forging company, and improvement activity proved its effectiveness reducing quality costs by 63.3% compared to the previous year. The research helps forging companies establish a quality management strategy by systematically managing and analyzing quality costs.

• Journal of Korean Society for Quality Management
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• v.25 no.1
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• pp.135-141
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• 1997

The Copper-Clad Laminate (CCL) is a main electronic component of specialtype printed circuit boards (PCBs) such as Silver Through Hole PCB. This CCL should have high reliability under the aging test, and usually the test is done at a higher temperature (110-$150^{\circ}C$) than the normal. Then, this test condition of high temperature may cause such quality problems as hole eccentricity and reduction of distance between part holes. After measuring the CCL shrinkage affected by temperature, the correction factor of a press mold was a, pp.ied to solve these problems. The results showed that the tolerance of hole pitch(${\pm}$$100{\mu}m$) was satisfactory and the internal and external failure costs were reduced by 55%.

• Asia pacific journal of information systems
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• v.18 no.4
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• pp.57-81
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• 2008

Knowledge is an essential strategic weapon for sustaining competitive advantage and is the key determinant for organizational growth. When knowledge is shared and disseminated throughout the organization, it increases an organization's value by providing the ability to respond to new and unusual situations. The growing importance of knowledge as a critical resource has forced executives to pay attention to their organizational knowledge. Organizations are increasingly undertaking knowledge management initiatives and making significant investments. Knowledge sourcing is considered as the first important step in effective knowledge management. Most firms continue to make an effort to realize the benefits of knowledge management by using various knowledge sources effectively. Appropriate knowledge sourcing strategies enable organizations to create, acquire, and access knowledge in a timely manner by reducing search and transfer costs, which result in better firm performance. In response, the knowledge management literature has devoted substantial attention to the analysis of knowledge sourcing strategies. Many studies have categorized knowledge sourcing strategies into intemal- and external-oriented. Internal-oriented sourcing strategy attempts to increase firm performance by integrating knowledge within the boundary of the firm. On the contrary, external-oriented strategy attempts to bring knowledge in from outside sources via either acquisition or imitation, and then to transfer that knowledge across to the organization. However, the extant literature on knowledge sourcing strategies focuses primarily on large organizations. Although many studies have clearly highlighted major differences between large and small firms and the need to adopt different strategies for different firm sizes, scant attention has been given to analyzing how knowledge sourcing strategies affect firm performance in small firms and what are the differences between small and large firms in the patterns of knowledge sourcing strategies adoption. This study attempts to advance the current literature by examining the impact of knowledge sourcing strategies on small firm performance from a holistic perspective. By drawing on knowledge based theory from organization science and complementarity theory from the economics literature, this paper is motivated by the following questions: (1) what are the adoption patterns of different knowledge sourcing strategies in small firms (i,e., what sourcing strategies should be adopted and which sourcing strategies work well together in small firms)?; and (2) what are the performance implications of these adoption patterns? In order to answer the questions, this study developed three hypotheses. First hypothesis based on knowledge based theory is that internal-oriented knowledge sourcing is positively associated with small firm performance. Second hypothesis developed on the basis of knowledge based theory is that external-oriented knowledge sourcing is positively associated with small firm performance. The third one based on complementarity theory is that pursuing both internal- and external-oriented knowledge sourcing simultaneously is negatively or less positively associated with small firm performance. As a sampling frame, 700 firms were identified from the Annual Corporation Report in Korea. Survey questionnaires were mailed to owners or executives who were most erudite about the firm s knowledge sourcing strategies and performance. A total of 188 companies replied, yielding a response rate of 26.8%. Due to incomplete data, 12 responses were eliminated, leaving 176 responses for the final analysis. Since all independent variables were measured using continuous variables, supermodularity function was used to test the hypotheses based on the cross partial derivative of payoff function. The results indicated no significant impact of internal-oriented sourcing strategies while positive impact of external-oriented sourcing strategy on small firm performance. This intriguing result could be explained on the basis of various resource and capital constraints of small firms. Small firms typically have restricted financial and human resources. They do not have enough assets to always develop knowledge internally. Another possible explanation is competency traps or core rigidities. Building up a knowledge base based on internal knowledge creates core competences, but at the same time, excessive internal focused knowledge exploration leads to behaviors blind to other knowledge. Interestingly, this study found that Internal- and external-oriented knowledge sourcing strategies had a substitutive relationship, which was inconsistent with previous studies that suggested complementary relationship between them. This result might be explained using organizational identification theory. Internal organizational members may perceive external knowledge as a threat, and tend to ignore knowledge from external sources because they prefer to maintain their own knowledge, legitimacy, and homogeneous attitudes. Therefore, integrating knowledge from internal and external sources might not be effective, resulting in failure of improvements of firm performance. Another possible explanation is small firms resource and capital constraints and lack of management expertise and absorptive capacity. Although the integration of different knowledge sources is critical, high levels of knowledge sourcing in many areas are quite expensive and so are often unrealistic for small enterprises. This study provides several implications for research as well as practice. First this study extends the existing knowledge by examining the substitutability (and complementarity) of knowledge sourcing strategies. Most prior studies have tended to investigate the independent effects of these strategies on performance without considering their combined impacts. Furthermore, this study tests complementarity based on the productivity approach that has been considered as a definitive test method for complementarity. Second, this study sheds new light on knowledge management research by identifying the relationship between knowledge sourcing strategies and small firm performance. Most current literature has insisted complementary relationship between knowledge sourcing strategies on the basis of data from large firms. Contrary to the conventional wisdom, this study identifies substitutive relationship between knowledge sourcing strategies using data from small firms. Third, implications for practice highlight that managers of small firms should focus on knowledge sourcing from external-oriented strategies. Moreover, adoption of both sourcing strategies simultaneousiy impedes small firm performance.