Study On Quality Cost Management Of FG Company

It is a request of economic globalization to enhance the Quality Cost (Cost of Quality, COQ) management, it helps enterprises to enhance their market competitiveness through putting down the total cost of product and increasing profit margin; at the same time, COQ is a communicating bridge connecting middle managers and the top management, it helps to throw off reserve between quality department and other departments to improve the quality level and enhance customer satisfaction.However, it must be clearly noted that there still are lots of issues in current COQ management:shortage of the sense of strategic management as a process on COQ; ignore of COQ management at the design phase; COQ management unimplemented as system engineering; neglect of the data acquisition and analysis, etc. All of them greatly limit the effect of COQ management and restrict the development of COQ as a bottleneck. Against these issues, by using literature research method, empirical research method and qualitative analysis method, this paper studied systematically on the theory of COQ management, then applied the theory and techniques to the analysis of FG company COQ management. This paper macroscopically and economically discussed the existing issues in FG's COQ and COQ management, and offered relevant countermeasures and improvement suggestions to promote the continuous improvement of COQ by deeply studying the root causes of issues.First of all, the paper systematically studied and gave an insight into the development history and the theories of COQ, analyzing the meaning of COQ and the economy of quality, describing the main contents and methods of sub-processes regarding to COQ, e.g. COQ plan, data acquisition, item setting, cost accounting, cost analysis, cost report, cost control and cost assessment as well cost optimization. For example, Pareto analysis, comparative analysis, ratio analysis and tendency analysis relating to cost accounting; total-cost-curve analysis relating to cost optimization.Secondly, centering on the three COQ models (i.e. traditional model, zero-defect model and continuously-improving moded) risen in different historical stages of the management development, the paper introduced their main features and application, and put forward the basic opinion that how to choose the most suitable COQ model for an organization. A common cost accounting method in modern COQ management, Activity-Based Costing (ABC), was also emphatically introduced in the paper.Thirdly, the paper gave an insight into the case of 2009 COQ management status of FG company, such as the ratio analysis on COQ to sale volume, the structure ratio of COQ etc. to find out the main issues, analyze the root causes and then put forward relevant countermeasures accordingly, i.e. enhancing the strategic COQ management consciousness of the top management; strengthening the idea of product overall lifecycle COQ management oriented by market and customer; performing the systematic management by using project management theories and methods. This paper emphatically analyzed the feasibility and necessity of the application of project management theories and technologies when establishing and perfecting of COQ management system.Last but not least, some detail suggestions on improving the FG COQ management system were proposed. For example, providing different training to different levels including the management and operating level to strengthen the COQ training; involving COQ management system into the whole cost accounting system, establishing clear total cost control responsibility system, perfecting COQ index system, to consummating the COQ management system; accelerating the promotion of company comprehensive management ability to advance the organic integration of management systems among COQ and other operation; introducing lean production and six sigma management into FG to enhance the efficiency and effectiveness of COQ.This paper clarified some doubtful and difficult points in COQ management. Its analysis and diagnosis of COQ management as well as corresponding improvement suggestions centering on the targeted company have high practicability, which is highly worth for reference for manufacturers, especially for those with weaker COQ management basis.