External failures

Failure costs - Internal failure costs are essentially the cost of failures identified and rectified before the final product gets to the external customer, such as rework, scrap, design changes. External failure costs include product recall, warranty and product liability claims. 

External failure costs and lost opportunities are potentially the most damaging costs to a business. Several examples commonly quoted in the literature are given below. 

Pc - internal failure cost due to rework at the end of the production line Pc - external failure cost for return from customer inspection 10 Pc - external failure cost for warranty return due to failure with customer in use. 

They are the operating quality costs of prevention and appraisal that are considered to be controllable quality costs. Add that in year 2000 the IRS decided to let companies deduct ISO 9000 costs as a business expense. Also there are the internal and external failure costs. As the controllable cost of prevention and appraisal increases, the uncontrollable cost of internal and external failure decreases. At some point the cost of prevention and appraising defective product exceeds the cost of correcting for the product failure. This point is the optimum operating quality cost. 

External failure cost is where an analysis result or certificate reach the customer before you discover that something has gone wrong. 

What gets measured gets done. The health of the quality system and the effectiveness of the quality plan need to be monitored. Therefore selecting the right set of quality metrics is important.Traditionally quality costs are broken down into preventive, appraisal, internal failure, and external failure costs. A commonly used indirect measure of internal failure costs is not-right-first time. Cycle time is another useful indirect measure of quality. Process quality can be measured. Processes can be rated on a 1-5 scale where ... 

Cost must be understood in the context of quahty. If quahty means conformance to requirements, then quality costs must be understood in terms of costs of conformance and costs of nonconformance, , as illustrated in Figure 19-1. In industrial terms, costs of conformance are divided into prevention costs and appraisal costs. Costs of nonconformance consist of internal and external failure costs. For a laboratory testing process, calibration is a good example of a cost incurred to prevent problems. Lhcewise, quality control is a cost for appraising performance, a repeat run is an internal failure cost for poor analytical performance, and repeat requests for tests because of poor analytical quality are an external failure cost. 

Prevention costs Appraisal costs Internal failure costs External failure costs... 

Internal failures must be thrown out or recycled. These should all be detected in products where a batch can be sampled and tested. External failures are much more serious and costly, although it is not always easy to quantify the cost. In the case of a "normal" product, the customer will return it. If he is really unhappy he will not buy it again. If a batch of medicine is faulty, the F.D.A. (to name but one national authority) may recall it. If the agency is really unhappy about the company s structures, procedures, and methods, it may well take stronger action. 

If we reduce the number of actual failures, we will automatically reduce the number of both internal and external failures. This modern approach to quality, spearheaded by Japanese workers (1) but now formally applied over a much wider area (8), consists of prevention of failure rather than its detection. The idea is a simple one - to avoid refusing a product it is enough at the production stage to control the process in such a way that the manufactured product is as close as possible to the desired product. 

External failure Time spent cooperating with external investigation Time/revenue lost because of interruption of sample throughput Legal costs Cost of corrective action Loss of reputation... 

External failure costs are associated with efforts to regain cnstomer satisfaction and confidence if nnacceptable data leave the laboratory. 

Another aspect of QA made apparent by Table 11.4 is that the elements categorized as Internal and External failure are fewer, but more expensive. If QA efforts in the Prevention and Appraisal categories are managed properly, the cost of failure can be avoided. 

The ultimate consequence of this approach is that quality improvement wUl lead to cost reduction (Crosby 1979 Garvin 1984b), which is achieved by lowering internal failure costs (e.g., scrap, rework, and spoilage) and external failure costs (e.g., warranty costs, complaint adjustments, service calls, and loss of goodwill and future sales) through prevention and inspection. 

Internal/external failure costs. These are costs incurred because of failures that are identified before they reach the customer and failures that have reached the customer. 

Process mapping Supply chain management Supply chain map Acquisition costs Possession costs Application costs Inspection costs Internal/external failure costs... 

The basic function of the algorithm is to implement a feedback control loop, as defined by the controller responsibilities, along with appropriate checks to detect internal or external failures or errors. 

The alarm lamp will indicate it in case any failure arises. If the external failure is a historical one, the indication will be called off. If the number of history-accumulated failures is or more than 5, the alarm lamp will keep illuminating albeit no failure emerges. The case of low power will be excluded. 

The warning lamp of safety airbag system is light normally. Safety airbag system warns circuit failure or external failure. 

Component external failure modes This is where a component may physically fail in such a way to have negative impact on its surrounding. Examples include leakage, overheat, burst, etc. These data may be obtained from the FMEA (see Chapter 5). 

The system/item external failures and their implications should be analysed and listed. References should be given for the source of the failure mode, the rationale for the failure effect on the adjacent system and the reference to the relevant SSA which describes the effect on the aircraft. 

ID Component in zone External failure mode(s) Intrinsic hazards Systemic vulnerabilities Effect on the aircraft Corrective/preventative action and/or mitigations... 

Where X R" and C R" ea e vectors composed, respectively, of the level of inoperability and external failures associated with each one of theudififerent infrastructures considered in the scenario. A e R is the Leontief matrix, in which entry a,y represents the level of influence that the inoperability of the i-th infrastructure has on the y -th one (interoperability). Notice that in the model, atj = 1 means that the y-th infrastructure is completely dependent on the i-th one, because a given service reduction in the latter will directly induce an equal level of service degradation into they -th one. Applicative examples and results of this approach have been already proposed (Setola 2007 Haimes Jiang 2001). 

FIGURE 11.29 Potential failure surfaces that need to be studied in soil nail design (a) external failure, (b) internal failure, and (c) mixed failure. (After Cornforth, D., Landslides in Practice, Investigation, Analysis, and Remedial/ Preventative Options in Soils, Wiley, 2005.)... 

List the key elements of the internal and external failure costs in your organization. 

Cost of poor quality (COPQ) The cost of poor quality is made up of costs arising from internal faUnres, external failures, appraisal, prevention and lost opportunity costs. In other words all the costs that arise from non-conformance to a standard. 

Internal and external failure. Internal costs are scrap, rework and the associated costs of not getting it right the first time. External failure costs are rectification after products have reached the final customer, such as warranty claims, returns and repairs. 

---