The influence of management information and quality management systems on the development of quality costing

This paper examines the development and setting up of a quality costing system in an organization involved in the manufacture of PVC-based oil coatings and moulding compounds. Prior to the study no attempt had been made to gather quality costs. There were a number of reasons for this, including the fact that the business was so profitable that there was no need to look closely at the costs, an acute lack of information, and a lack of understanding of the concept and principles of quality costing among the senior management team. It was a new managing director who saw the need for a quality costing system when he uncovered various forms of wastage in the organization. In establishing the system, three major difficulties were encountered: the lack of information which could be utilized for quality costing purposes, an unrefined accounting system and a lack of data on non-conforming product.