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Review and solve the Texas Instruments: Cost of Quality Case

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Introduction

Review and solve the Texas Instruments: Cost of Quality Case. Introduction Ittner and Kaplan (1990) introduced the case of Texas Instruments describing the company's main business was to produce programmable controllers for the industrial automation and factory control fields. Besides, Texas Instrument's Industrial Systems Division (ISD) processed a state-of-the-art facility for assembling pin-in-hole and surface mount circuit boards. ISD was established in 1973 and developed bigger over time through overseas offices in over the world. To competitive with foreign companies, ISD was implemented the cost of quality system in 1983. Analysis As Ittner and Kaplan (1990) elaborated the ISD case, the management of ISD considered that implement the quality control system changed its nature as a quality culture is institutionalized. They wondered whether to retain the system, modify it, or drop it completely though ISD had achieved great success in institutionalizing a "quality culture" in several years. ...read more.

Middle

Besides, the cost manager who recorded down the quality cost did not believe that the quality of the processes or products would be improved by noting down and calculating the numbers alone. Rather, they were defensive about their processes and confronted for the quality cost they noted down. ISD could not drop cost of quality (COQ) system totally because it is a useful measure. Cost of Quality can be used to determine the global optimum for a process, and control that process' progress towards its global optimum. (http://www.pqa.net). That is also the reason why ISD's impulse to implement COQ system to competitive with many foreign companies. According to Don Schenck, the division Quality & Reliability manager, COQ does inform "where our most significant operation lies", and assists them "identify areas for improvement" (Ittner & Kaplan, 1990, p. ...read more.

Conclusion

The bodywork of a car does not need to be hard. Therefore, price of car is low and Vietnamese consumers can buy it. In contrast, Toyota Motor Corp designed car with high capacity suitable for roads in The U.S., it can run with high speed so bodywork of car must be harder and heavier. American consumer accepts the price that meets their requirements. ISD can adjust cost of quality variables such as turnover costs, project costs, RMR, product inspection, production planning, production rework, reliability, burn-in, and test. To get quality products with suitable price in every country is a hard task. ISD need to research manners and customs of consumers and especially the income of consumers in that country to get success in business. Summary By reviewing the Texas Instruments case, we understand the difference between prevention, appraisal cost, internal, and external failure. Besides, we also know definitions of cost of quality variables, understand how to choose an appropriate quality tools under different manufacturing operations. ...read more.

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