An examination of the relationship between quality costs and productivity in conjunction with the introduction of statistical process control : a case study

This study was conducted to assess the relationship between quality costs and productivity as SPG is introduced to a productive process. It also sought to analyze the dollar benefits associated with changes in productivity. Data were provided by a division of a major U.S. automobile manufacturer.

The basis for the first phase of the research lay in several assertions commonly found in the literature on productivity, quality, and quality costs: (1) higher product quality leads to greater productivity, (2) added expenditures for prevention of defects can improve quality and reduce total costs, and (3) increased expenditures on prevention lead to increased productivity. A regression model was designed to test the validity of these assertions. The dependent variable was productivity, and the independent variables were the four classes of quality costs and a dummy variable to indicate the progress in the use of statistical process control.

In general, the signs for the regression coefficients did not conform to a priori expectations. An analysis of the correlations among the quality cost elements was, however, perfectly compatible with current quality cost theory.