Increasing the visibility of hidden failure costs

Increasing the visibility of hidden failurecosts

Suresh Kumar Krishnan

Summary

Purpose – The purpose of this study, with its central thesis placed on excelling at business measures, isto underscore the need for business entities to understand the significant implication of hidden failurecosts and its impact on their business processes. The study also stresses the need for organizations tosystematically break the many norms.

Design/methodology/approach – This study looked at capturing the often-overlooked component ofpoor quality cost via a simple function of measurement which requires an effortless yet painstaking wayof collecting data pertaining to intangible wastages in the form of time, service charges and material.

Findings – A simple formula is introduced, using three types of indicators that could be used to monitorthe level of poor quality costs (PQC), to quantify the total failure costs by accumulating the values of bothhidden and visual failure costs.

Originality/value – The study breaks the boundaries of existing methods of understanding andcalculating the all-embracing cost of doing business, hence paving the way to make inroads in businessprocesses improvement, enhanced job-scope comprehension, agility and performance, furtherintensification of internal and external customer satisfaction.

Keywords Quality, Quality costs, Continuous improvement, Quality indicators

Paper type Research paper

We should be able to earn and learn for free from the expensive failure events made by us and

others around the globe

1.1. Introduction

The use of the word ‘‘Quality’’ can be seen and heard everywhere. However there is still a

very vague understanding of this commonly used word (whether it is regarding a product or

service). Of course, if you asked ten different people what is quality to them with regards to a

particular product or service, you would hear a myriad of answers. This is because different

people have different expectations and needs. So, we can certainly say that quality to any

individual is something that will give him/her a degree of satisfaction and delight. One other

situation, which is quite common, is the labelling of a product or service in terms of ‘‘Low

quality’’ and ‘‘High quality’’. For instance, when asked, between BMW and a locally

(Malaysian) made car of any model, which is higher in quality, it is no surprise if we hear that

BMW is higher in quality than a locally made car. If we accept this answer as true, than we are

claiming that there are organizations which produce low quality products and furthermore

say that there are people in the society who go for low quality product or service. The main

reason we hear such expressions are because of the failure to understand a product’s

capacity and confusing that as the sole criterion of quality. Here people should clearly know

that the capacity of a product or service would determine its price. Similarly, if the price is

higher it also does not always mean that the quality is higher too. The cheapest car can be of

very high quality as long it can perform in the manner it was supposed to based on its ability.

DOI 10.1108/13683040610719290 VOL. 10 NO. 4 2006, pp. 77-101, Q Emerald Group Publishing Limited, ISSN 1368-3047 j MEASURING BUSINESS EXCELLENCE j PAGE 77

Suresh Kumar Krishnan is a

management consultant at

QPIC Consultants SDN

BHD, Taman Miharja,

Cheras, Kuala Lumpur,

Malaysia.

What should be realized is that, quality can be measured based on a number of attributes

and the level of these attributes within a product or service will determine the price. As long

as there is value for the money paid by a customer for a product or service, then he or she will

be satisfied.

Quality must exist in whatever we do. Quality must be built into the product or service that we

produce, which also means that quality should be built into an organization (regardless of

business types). In order to achieve such an outcome there should be many sustainable

quality improvement programs and activities in place. Of course this will further create many

indicators or performance measures that will be used to monitor whether or not a particular

process, and all the activities within that process, is in control. It must however be realized

that indicators or performance measures would only give information to a limited extent. This

is because, in most cases, the underlying errors in various types of activities are not, as yet

eliminated. These indicators or performance measures will certainly give us some

information on the efficiency levels of a process or the activities within the process.

Unfortunately, we may never know whether we are doing all the right things right or doing the

wrong things efficiently. In order to avoid such situations we must look into the ideas of

eliminating all types of failure events or potential failures within an organization. One way to

really know your organization is by understanding the existence of all types of failure events

and the potential failures that may take place. This means the quality improvement programs

or initiatives in place at an organization must include the ideas of accepting that failure

events and potential failures exist, identifying them and finally reducing or eliminating them

totally from within the organizational system. The solution to this added item in the quality

improvement programs could be achieved by utilizing the suggested methodology which

will be discussed further in this paper.

In the twenty-first century, there is no doubt that information plays a vital role in business

decision making. How should we obtain such information? What kind of information are we

looking for? How fast can we retrieve this information? Of course, there are many types of

information needed for different types of situation. In order to have such information, we

need to create a system that can collect various types of data. Certain types of information

are readily available (normally collected as part of business processes) but others need to

be identified before collecting.

If there is need to control anything, the first thing to do is measure. Without measuring, so

much important information that can contribute to decision making in business will be

hidden. One type of information that is wrongly interpreted by many organizations

(regardless the nature of business) is the cost of doing business. What they fail to realize is

that the costs calculated using the conventional accounting system, do not capture the costs

related to poor quality. Traditional managerial accounting systems are structured poorly to

make true profitability visible and exposing the real cost of quality (COQ) that today’s teams

need (Cockins, 2001). This means the true costs of doing business could be much smaller

than calculated through the accounting system. Furthermore this indicates that there could

also be a wide variety of opportunity for quality improvement. We know that a large part of

failure costs, both internal and external are invisible, i.e. they are either impossible to record,

or not worth recording (Dahlgaard et al., 1998). It is often claimed in the quality literature that

total quality costs are very considerable, typically between 10-40 percent of turnover. This is

why these costs are also known as the ‘‘hidden factory’’ or ‘‘the gold mine’’ (Dahlgaard et al.,

1998). It is undeniable that, people know about some types of wastage that occurs everyday

in their organization. They do not take it seriously and consider it as a norm. These hidden

costs (some added to the overhead account) can be only captured through a cost of quality

(COQ) measurement system.

The measurement of COQ is the best way to address the issue regarding wastage. COQ can

trigger faster action on improvement because it shows the wastage in terms of monetary

loss. This means that the upper management will be more anxious to reduce this amount. All

types of organizations should venture into measuring the COQ as it is directly linked to

profitability. Most organizations as mentioned earlier are confused about the costs of doing

PAGE 78 jMEASURING BUSINESS EXCELLENCEj VOL. 10 NO. 4 2006

business. It is time for them to realize that many hidden costs of quality are associated with

that figure. So organizations must take the initiative to identify all the hidden costs and if it

contributes to poor quality then actions should be taken to eliminate it. Providing employee

teams with visible evidence of both obvious and hidden quality related costs can be

valuable for improving performance (Cockins, 2001). The idea of measuring is not always

easy. This is because the culture of an organization itself can be a major obstacle. Standard

cost systems usually institutionalize waste by relating it to a pre-established standard. A

certain percentage of rejects may be considered necessary in a production process and as

long these figures are not exceeded, no failure costs is recorded (Moen, 1998).

We can actually measure quality improvement by measuring the poor quality costs (PQC),

which looks into various situations that will cost us in the wastage of time, unnecessary

service charges and materials usage. Based on this reality, the initial focus of any quality

costs implementation in a non-manufacturing organization must be on the cost of failure.

There no time to worry about the costs of prevention or appraisal – let’s find out where the

boat is leaking (Shepherd, 2001). Anyway this applies in both manufacturing and the

non-manufacturing organizations.

1.2. Overview of the hidden cost of quality

As mentioned above, the concept of the economics of quality can be traced back to the early

1950s. Since the categorization of cost of quality in the late 1950s it has been refined and

expanded to thepoint today that it provides anexcellent management tool.However, people in

various industries are either not using it or are still not aware of it. Quality related costs were

scattered among various accounts, especially ‘‘overhead’’ accounts. As quality specialists

extended their studies, some surprises have emerged, particularly that quality related costs

weremuch larger thanhad beenshown in theaccounting reports.When receiving theMalcolm

BaldridgeNationalQualityAwards,FredSmith(CEOandChairmanofFederalExpress)stated:

‘‘At least 15 percent of cost of any product or service is spent on rework or repair’’;

Experience has shown that, regardless of the type or nature of business, there is an element

of expenditure relating to avoidable mistakes, waste, inefficiencies and poor performance

(Stebbing, 1992). Surveys carried out in North America, Europe and Australia have shown

that inveterate waste can vary from 5 percent to 45 percent of a company’s revenue

(Stebbing, 1992).

Cost of quality (COQ) systems are bound to increase in importance because COQ related

activities consume as much as 25 percent or more of the resources used in companies

(Ravitz, 1991). COQ information can be used to indicate major opportunities for corrective

action and provide incentives for quality improvements.

When things go wrong in our working environment, someone or everyone will suffer the

consequences. Studies carried out in business, industry and public sector have shown that

cost of these failures usually amounts to between 20 and 40 percent of the organization’s

total costs (Maycock and Shaw, 1994).

It is estimated (Atkinson et al., 1991) that the average European manufacturing company

operates with a cost of poor quality (CoPQ) of about 15 to 25 percent of turnover. This figure

increases as 40 to 50 percent in the service sector, with even higher costs in some public

sector organizations. Generally, quality costs generated through administrative process

account for more than that of production processes due to ‘‘hidden costs’’ – a ripple effect

can occur such that errors caused in one department can trigger work in another.

According to McNealy (1993), an organization’s major non-quality costs are administrative

and management related. Administration and management costs are mistakenly considered

the ‘‘cost of doing business’’. Consider the fact that over 40 separate companies in the USA,

UK, Canada, Europe and Asia, varying in size from $10 million to $500 million in sales, have

determined that their cost of non-quality (CoNQ) averages over 20 percent of gross sales.

By measuring quality in financial terms through the calculation of CoPQ, management can

learn of what is happening within an organization and at the same time can be more efficient

VOL. 10 NO. 4 2006 jMEASURING BUSINESS EXCELLENCEj PAGE 79

and effective. They can do this by concentrating their efforts on the real problems

confronting the organization. These real problems are identified through the CoNQ as these

items having a significantly negative impact on earnings (McNealy, 1993).

In addition to the measurable costs of quality, the ‘‘hidden’’ costs can be enormous. Many

costs, such as lower contribution margins from loss of customers and indirect labour costs

go unrecognized because they are not measured or reported (Wheldon and Ross, 1998).

Hidden costs of poor quality can be between three and ten times the visible costs (Petty,

1997). Unfortunately, many business decisions are still made only based on the information

from the visible costs.

In a survey of Australian manufacturing firms, it was found that 48 percent of respondents

measured COQ but only 41 percent of these used all four (Appraisal, Prevention, Internal

and External Failure) cost categories (Wheldon and Ross, 1998). Ross analyzed the reasons

given by firms for not reporting COQ. He discovered that, problems with creating a parallel

register for collecting quality costs from existing cost information system (47 percent) was

the major reason, followed by lack of support from management for collecting quality costs

(27 percent), manufacturing complexity (21 percent) and finally the lack of awareness of the

concept of quality costs (11 percent). The most significant result to come from his research

was that actual cost data was not exclusively used in calculation of COQ. He also found that

firms relied heavily on estimates of cost data in preparation of cost quality reports. Here, how

the estimates were made are also not very clear.

If this continues, there will be considerable wastage due to ‘‘hidden costs’’ that an

organization could avoid. According to Deming (1986), intangible costs have been

described as the most important ones that need to be managed, but they are unknown and

unknowable (Moen, 1998). The hidden costs of poor quality can be between three and ten

times the visible costs (Ross, 1998, cited in Tsai, 1998). Measuring and reporting the cost of

quality (COQ) is the first step in a quality management program (Hsien Tsai, 1998). As it is,

without measuring one cannot control. Therefore, the measurement for quality can become

consistent with the language of all important business measurement – i.e. money.

The purpose of this paper is to explore an appropriate method for identifying and measuring

CoPQ. Since the study is also focusing on the hidden failure costs, this will also increase the

accuracy level of the measure. Through this measure, a lot of hidden costs can be brought to

light and various types of improvements can be made in order to reduce waste.

1.3. Background of these types of study

The issue of reducing waste and increasing productivity has always received considerable

attention. However, the reality is people have been tolerant of waste and not eliminating it.

Most studies, in measuring the CoPQ have not given a clear and easy methodology for

people to follow. Even the universally accepted model (The Prevention Appraisal Failure

(PAF) Model) has its drawbacks. As a result, the level of application of such measurement

approaches is still very low, although many organizations have exposed their staff to the

issue of COQ in the training context.

This paper attempts to address these important issues and propose a framework that

provides a systematic way of measuring failure costs. Failure costs measurement should be

the first step in introducing the COQ measurement system. So, a proper and practical

methodology is needed to identify these costs.

1.4. Significance of COQ measurement

The issue of measuring COQ has been considered for a long time but its application is still

not widespread. To avoid people from shying away from this important area of measurement,

a study is needed to identify the real hidden costs. There is also an urgent need for a more

objective and accurate measurement of the hidden costs.


Based on the examples given above, it is time that all industries look into this matter

seriously. We cannot waste any more of our limited resources doing the wrong things or even

doing the right things wrong.

The recent enhancement of the ISO 9000: 2000 quality standard, also requires a greater

degree of integration by grouping ‘‘Measurement, analysis and improvement’’ into a single

section. This approach support expanding and integrating ‘‘waste’’ reporting into the

management feedback mechanism (Shepherd, 2001).

The importance of a PQC measuring system can also be seen from the commitment by the

Singapore government. In 1998 the Singapore government set aside $40 million to assist

Singapore organizations to establish PQC system. According to Minister without Portfolio,

Lim Hoon Heng (1998, cited in Harrington, 1999), the $40 million investment will help 1,000

organizations here (Singapore) to help their operations lean (Harrington, 1999).

Based on a report in The Straits Times (1998, cited in Harrington, 1999), PQC pilot projects

were started in 1998 to examine the quality costs of six industries – plastic products,

printing, hotel, garment, electrical and packaging and will achieve savings estimated at

more than $12 billion a year (Harrington, 1999). That figure is 300 times more than the

investment and is certainly one that other countries would want to repeat.

2. Background

2.1. Definitions of cost of quality

There is often some misunderstanding and confusion of the terms between cost of quality

(COQ), cost of poor quality (CoPQ) and poor quality cost (PQC). The terms are similar,

however, when talking about COQ all of the categories from the PAF Model (prevention,

appraisal and failure) are considered. Prevention and appraisal are for attaining quality while

failure (internal and external) is the CoPQ or PQC. There are a few definitions that is

associated with quality costing:

B Quality cost is defined in BS4778: Part 2 as: The expenditure incurred by the producer, by

the user and by the community, associated with product or service (Dale and Plunkett,

1995).

B Quality related cost is defined in BS4778: Part 2 as: The expenditure incurred in defect

prevention and appraisal activities plus the losses due to internal and external failure

(Dale and Plunkett, 1995).

B Quality related cost is defined in BS6143: Part 1 as: cost in such categories as prevention

cost; appraisal cost; internal failure cost and external failure cost (Dale and Plunkett,

1995).

B Quality related cost in BS6143: Part 2 it is defined as: Cost in ensuring and assuring

quality as well as loss incurred when quality is not achieved (Dale and Plunkett, 1995).

B The ‘‘cost of poor quality’’ (CoPQ) of an organization is the difference between the actual

operating cost and the operating cost if there were no failures in its systems and no

mistakes by its staff (Bland et al., 1998).

B The cost of poor quality is defined as the total losses caused by the products (goods and

services) and processes of a company not being perfect (Sandholm and Sorqvist, 2000).

B According to the American Society for Quality Control (ASQC), quality costs are a

measure of costs specifically associated with the achievement or non-achievement of

product or service quality, as defined by all product or service requirements established

by the company and its contracts with customers and society (ASQC, 1974).

B Horngren et al. (1997) defined the costs of quality as ‘‘those costs that are incurred to

prevent a shortfall in quality and a failure to meet customer requirements, as well as costs

incurred when quality does in fact fail to meet customer requirements’’.


B Cost of conformity (3.1): cost to fulfill all of the stated and implied needs of customers in

absence of failure of the existing process. Cost of non-conformity (3.2): cost incurred due

to failure of the existing process (ISO, 1998).

2.2. The important events relating COQ

The concept of the economics of quality can be traced back to the early 1930s. Let’s look at

the important events that contributed to the development of measuring COQ:

1. The 1930s, based on articles from Crocket (1935) and Miner (1933, cited in Giakatis

et al., 2001), was the first time the term quality costing appeared in 1930s (Giakatis et al.,

2001).

2. In the early days (before 1950) of quality management, quality costs were regarded as

the costs of scrap, rework, inspection plus the costs of running the quality department

(Giakatis and Rooney, 2000).

3. Dr Feigenbaum first published a brief view of ‘‘cost of quality’’ in the American Institute

of Electrical Engineers Magazine in 1945, then again in 1951 in his book entitled Total

Quality Control (Harrington, 1999).

4. Dr Juran’s first ‘‘Quality control handbook’’, published in 1951, was titled The Economics

of Quality and contained discussions of the ‘‘Cost of quality’’ (Pheng Low and Yeo,

1998).

5. Quality costs featured in a 1957 British Productivity Council film Right First Time (Dale

and Plunkett, 1995).

6. Feigenbaum (1961) classifies quality costs into the familiar categories of prevention,

appraisal and failure (internal and external) costs (Pheng Low and Yeo, 1998).

7. In 1967 the American Society for Quality Control (ASQC) published Quality Costs –

What and How. This booklet was revised in 1970 and 1974 has now been withdrawn. It is

now entitled Principles of Quality Costs (Dale and Plunkett, 1995).

8. In 1974 ASQC published Guide for Reducing Quality Costs. Has now been withdrawn

(Dale and Plunkett, 1995).

9. In 1977 ASQC published Guide for Managing Supplier Quality Costs (Dale and Plunkett,

1995).

10. Both the above publications have been incorporated into the second edition of

Principles of Quality Costs (Dale and Plunkett, 1995).

11. Philip B. Crosby popularized cost of quality with his book: Quality is Free in 1979

(Beecroft, 2001).

12. Prior to the publication of BS6143 in 1981 considerations of quality costing were

mentioned in BS4891 in 1972 under the heading ‘‘Economics of quality assurance’’, the

notion that in each manufacturing situation there should be an optimum quality level

corresponding to minimum manufacturing operation or quality costs (Dale and Plunkett,

1995).

13. The British Standards Institution published BS6143 Guide to the Determination and Use

of Quality related Costs in 1981.

14. The BS 6143 model was revised in 1990 under the title BS 6143: Guide to the Economics

of Quality, Part 2 (Giakatis and Rooney, 2000).

15. BS 6143: Guide to the Economics of Quality, Part 1 was published two years later (1992)

than the part 2 (Giakatis and Rooney, 2000).

16. ISO/TR 10014: Guidelines for Managing the Economics of Quality (ISO, 1998). It was

prepared by Technical Committee ISO/TC 176, Quality Management and Quality

assurance, Subcommittee SC3, Supporting Technologies.


Measuring something without Statistical Thinking is as good as not measuring at all.

2.3. Measuring the hidden costs of quality

When people do not measure the poor quality cost (PQC) relating to input, the on going

process and also the output of an activity, they will assume that all the costs that occur is the

costs of doing business. Unfortunately this is not the case. In reality there are many things

that happen without expectation. Such problems and interruptions should always be

identified for immediate elimination. If left unattended this will form a culture that tolerates to

waste. Many occurrences of failure events may result in understating the costs of poor

quality (CoPQ). These ‘‘hidden’’ costs include (which are merely a fraction of many other

failure events, depending on the type of organization):

1. Potential lost sales.

2. Costs of redesign due to quality reasons.

3. Costs of changing manufacturing processes due to inability to meet quality

requirements.

4. Costs of software changes due to quality reasons.

5. Costs included in standard because history shows that a certain level of defects in

inevitable and allowances should be included in standards:

B Extra material purchased: the purchasing agent orders 5 percent more than the

production quantity needed.

B Allowances for scrap and rework during production.

B Allowances in time standard for scrap and rework

6. Extra manufacturing costs due to defects. This includes additional costs for space,

inventory changes and overtime.

7. Scrap not reported.

8. Excess process costs for acceptable product.

9. Cost of errors made in support operations such as orderfilling, production control and etc.

10. Cost of poor quality within a supplier’s plant. These are costs included in the selling

price (Juran and Gryna, 1988).

The above-mentioned items can also be further illustrated by the ‘‘Cost of quality iceberg’’ in

Figure 1.

Based on the COQ iceberg shown in Figure 1, we can see that only the costs that are visible

is always taken into consideration when talking about failure costs But these are actually the

tip of that iceberg. There are more hidden costs that can and should be identified.

According to Tyson (1987, cited in Campanella, 1989), there are several important reasons

that we need to measure the cost of quality (COQ). This is based on a study he did to find out

the nature and scope of quality costs measurement in major industrial corporations. He

contacted 125 randomly selected corporate controllers of the 1985 Fortune 500. Telephone

interviews were completed with personnel from 94 of these firms (75.2 percent response).

The list of the reasons for this measure is as below:

B It is critical in profitability assessment.

B It is a good marketing tool.

B It identifies quality problems.

B It can evaluate overall production costs.

B It is a component of our value improvement program.

B It can be used in long term forecasting.


B It is an element of productivity improvement.

B It is an integral part of the planning process.

B When quality is the number one corporate priority.

B Can be used in setting prices.

B Can be used in monitoring production and capacity.

B It can help regarding engineering issues.

B Can increase government regulation.

B Can pressure industry to lower prices.

B Can be used in establishing standard costs (Campanella, 1989).

2.4. Categories of quality costs (PAF model)

The prevention appraisal failure (PAF) model is the universally excepted model (BS 6143:

Part 2) in the cost of quality area. It comprises the following elements:

1. Internal failure costs – these are costs associated with defects that are found prior to

transfer of the product to the customer. They are costs that could disappear if no existed

in the product prior to shipment. According to Dwyer (1970, cited in Campanella, 1989)

the common examples of the internal failure costs are as below:

B scrap;

B rework;

B material review;

B trouble shooting and retest;

B failure analysis, reporting and corrective action investigation; and

B customer service (Campanella, 1989).

Figure 1 The cost of quality iceberg


2. External failure costs – these are costs associated with defects that are found after

product is shipped to the customer. These costs also would disappear if there were no

defects. The common examples of the external failure costs are as below:

B customer incurred cost;

B customer dissatisfaction cost;

B loss of reputation; and

B lost opportunity cost (Harrington, 1999).

3. Appraisal costs – These are cost incurred to determine the degree of conformance to

quality requirements. According to Dwyer (1970) the common examples of the

appraisal costs are as below:

B receiving inspection;

B in-process inspection and test;

B laboratory acceptance testing;

B calibration and maintenance of measuring equipment; and

B inspection at vendor’s plants (Campanella, 1989).

4. Prevention costs – these are costs incurred to keep failure and appraisal costs to a

minimum. According to Dwyer (1970) the common examples of the prevention costs are

as below:

B quality manager and staff;

B quality systems, procedures and standards;

B quality audit and corrective action;

B vendor quality surveys and planning;

B procurement quality review;

B quality engineering planning for incoming inspection; and

B quality engineering pre-planning for in- house activities (Campanella, 1989).

Even though there are some activities that are listed under each category of the PAF Model

above, it is not always easy to apply as it looks to place the various activities that may take

place in an organization into the relevant categories. A such there are certainly a number of

drawbacks to this approach.

2.5. Drawbacks of the PAF approach

Although the PAF model is universally accepted for quality costing, there are a number of

criticisms of it (Oakland, 1993; Porter and Rayner, 1992), described as follows:

B It is difficult to decide which activities stand for prevention of quality failures since almost

everything a well managed company does has something to do with preventing quality

problems.

B There are wide varieties of prevention activities in any company which are integral to

ensuring quality but may never be included in the report of quality costs.

B Practical experience indicates that firms that have achieved notable reduction in quality

costs do not always seem to have greatly increased their expenditure on prevention.

B Original PAF model does not include intangible quality costs such as ‘‘loss of customer

goodwill’’ and ‘‘loss of sales’’.

B It is sometimes difficult to uniquely classify costs (e.g. design reviews) into prevention,

appraisal, internal failure or external failure costs.

B The PAF model focuses attention on cost reduction and ignores the positive contribution

to price and sales volume by improved quality.


B As mentioned above, the classic view of an optimal quality level is not accordance with

the continuous quality improvement philosophy of TQM.

B The key focus of TQM is process improvement, while PAF categorization scheme does

not consider process costs. Therefore, the PAF model is of limited use in a TQM program

(Hsien Tsai, 1998).

2.6. Deficiencies of most cost of quality systems

Generally, the following shortcomings in measuring COQ using most COQ systems can be

identified:

B The aspect of overhead allocation in calculating COQ is seldom discussed in the

literature. In practice, some companies add overheads to the direct cost of labour and

material on rework and scrap, while other companies do not. If they do, ‘‘rework and scrap

costs become grossly inflated compared with prevention and appraisal costs which are

incurred via salaried and indirect workers’’ (Dale and Plunkett, 1995).

B Most of COQ measurement systems in use are not (there are some exceptions) intended

to trace their quality costs to the sources (O’Guin, 1991) such as parts, products, designs,

processes, departments, vendors, distribution channels, territories and so on.

Accordingly, the COQ information derived from these systems cannot be used to

identify where the quality improvement opportunities exist.

B ‘‘It is the general lack of information about how people, other than direct workers, spend

their time which presents a considerable obstacle to the collections of quality costs’’ (Dale

and Plunkett, 1995).

In addition further deficiencies that can contribute towards a poor COQ measuring system,

include:

B The system does not allow total participation from everyone in the organization. Only a few

members from the QC department or relevant units or sections are included. This means

only the visible costs related to the organization can be gathered.

B The system is too complicated that it makes people to shy away from it.

B Fail to make people understand the types of failure events that may take place in an

organization. The focus of failure vents is only on the common issues like rejects, scrap,

customer complaints and so on.

B Method for calculating the COQ is not very clear and not standardized as well. Only

whatever captured by the accounting department is utilized.

2.7. A common scenario

Figure 2 represents a common business scenario. It is clear that Profit¼Revenue 2 Cost of

doing business but the issue that many people ignore is that the cost of doing business

consist of the hidden failure costs as well as the visible failure costs. This hidden failure costs

is usually added into the operational costs. One main reason is because of the difficulties in

quantifying such costs.

People will have to realize that a single failure event that may take in an organization will

generate many non-value-added activities. These activities will further generate

non-value-added costs (i.e. costs incurred with no value added for either internal or

external customers.

In this paper, the author looks into how to change this scenario by making the hidden failure

costs more visible. This will certainly contribute to better understanding of the real costs of

doing business. The method for identifying the hidden failure costs is discussed in the

following sections.

The application of the most appropriate base that will help in quantifying failure costs

depends on the organization. This is because the existence of various types of activities,


processes and also the types of business involved. Agreement within the organization must

be reached, whatever the choice of base in quantifying the failure costs. The various types of

base that can be used in calculating failure cost are listed in Table I together with their

advantages and disadvantages.

3. Making hidden costs of quality more visible

3.0. Classification of failure costs apart from the PAF model

It is undeniable that the PAF model is universally accepted in measuring the COQ.

Unfortunately there are a number of drawbacks in its implementation and application, as

discussed earlier. The common way the failure costs are classified in this model is as below:

B Internal failure costs – these are costs associated with defects that are found prior to

transfer of the product to the customer. They are costs that could disappear if no existed

in the product prior to shipment.

B External failure costs – these are costs associated with defects that are found after

product is shipped to the customer. These costs also would disappear if there were no

defects.

Figure 2 The common scenario when looking into the cost of doing business

Table I Various types of base to quantify quality cost

Base Advantages Disadvantages

Direct labor hours Readily available and understood Can be drastically influenced by automationDirect labor dollars Available and understood; tends to balance

any inflation effectCan be drastically influenced by automation

Standard manufacturing costs dollars More stability than above Includes overhead costs both fixed andvariable

Value added dollars Useful when processing costs are important Not useful for comparing different types ofmanufacturing departments

Sales dollars Appeals to higher management Sales dollars can be influenced by changes inprices, marketing costs, demand, etc.

Product units Simplicity Not appropriate when different products aremade unless ‘‘equivalent’’ item can bedefined

Source: Campanella (1989)


According to Dahlgaard et al. (1998), because of the problem with the invisible costs, it was

deemed necessary to introduce a new classification of the firm’s total quality costs – one

which take account of ‘‘the invisible figures’’. This new classification (Dahlgaard et al., 1998)

is shown in Table II.

Total quality costs can be classified in Table II, with internal and external quality costs on the

one side and visible and invisible costs on the other (Dahlgaard et al., 1998).

Meanwhile, according to Harrington (1999) the elements of PQC are as follows:

1. Direct PQC:

B controllable PQC:

– prevention cost;

– appraisal cost; and

– non-value added cost.

B Resultant PQC:

– internal error cost;

– external error cost; and

– equipment PQC.

2. Indirect PQC:

B customer incurred cost;

B customer dissatisfaction cost;

B loss of reputation; and

B lost opportunity cost.

3.1. The proposed classification of failure cost

In order for people to better understand failure costs, the author feels that there is a need for

a better classification. Here the internal and the external costs as mentioned above are

broken down further, to show it from the organizations perspective. The proposed

classification is as below:

B Anterior external failure costs (AEFC) – are contributed by the supplier.

B Internal failure costs 1 (IEFC1) – are contributed by poor planning and decisions.

B Internal failure costs 2 (IEFC2) – are contributed by daily operations.

B Posterior external failure costs 1 (PEFC1) – are contributed during and after delivery

of product/service.

B Posterior external failure costs 2 (PEFC2) – are contributed by the costs that

customer face or facing during and after warranty period.

Table II A new classification of a firm’s quality costs

Internal costs External costs Total

Visible costs 1a. Scrap/repair costs1b. Preventive

2. Guarantee costs/costs of complaints 1 þ 2

Invisible costs 3a. Loss of efficiency owing to poorquality/bad management

3b. Preventive/appraisal costs

4. Loss of goodwill owing to poorquality/bad management

3 þ 4

Total 1 þ 3 2 þ 4 1 þ 2 þ 3 þ 4


3.2. Failure costs layout from an organization’s perspective

Based on the Figure 3, we can see that failure costs can affect an organization in three areas,

that is before, during and after a product or service is produced. The classifications are

further explained below:

B Anterior external failure cost (ACFC) – these are costs that will occur if the supplier

makes the mistakes. The problems that usually occur are delay in deliveries, material

defects, wrong delivery and so on. Failure to capture this cost can lead to further

unnecessary problems, which means generation of more internal failure costs.

B Internal failure cost 1 (IFC1) – these are costs that will occur when there are poor

planning and decisions. These can be problems such as bad purchasing of

machine, bad hiring, creation of a bad system, placing a wrong person at a job and

so on. These costs can be very much hidden as planning and decisions are made by

‘‘high ranking’’ people in the organization. These costs cannot be detected in a very

short period.

B Internal failure cost 2 (IFC2) – these are costs that is due to interruptions that may

occur during the daily operations of an organization. Any individual in the organization

regardless of positions held can encounter such problems. The interruptions can be

due to a computer not functioning, machine breakdowns, printer not printing, etc.

Even though these types of problems occur rather frequently, sometimes they are

accepted as a norm and also may be considered as part of a process. Most people fail

to understand that these so-called minor problems can create a very large amount of

waste (monetary) due to the frequency of its occurrence.

B Posterior external failure cost 1 (PEFC1) – these are PQC that can occur during and

after delivery of a product or service. This costs can be very intangible and not that

easily quantifiable. There are also some costs that can be quantified with easily

available data. The problems that may contribute to these costs are such as warranty

claims, wrong delivery, poor handling of delivery, poor packaging, loss of customers,

loss of opportunity, and so on. Even though there are some easily quantifiable costs

from this part but they are also left unnoticed in some organizations.

B Posterior external failure cost 2 (PEFC2) – these are costs that a customer has to face

or even may be facing during or after a warranty period. This are costs that a

customer has to pay after he or she had the product or service provided by an

organization. The usual type of costs can be transportation costs for making warranty

claims, making calls for further technical help due to faulty products and so on.

These may be the most difficult poor quality cost to quantify. However there has been

also a very little effort to quantify these costs.

If all of the above costs can be quantified and further reduced or eliminated then the real

costs of doing business can be more accurately known and activity focused on adding value

for the customers.

Figure 3 Failure costs layout from an organization’s perspective


3.3. How failure cost should be viewed?

Generally, loss is calculated from the visible costs through an organization’s accounting

system. Little attempt is often made to highlight the number of people, amount of resources

and amount of time required to correct, avoid or resolve these situations (Rosander, 1994).

Here is list of some examples of internal and external failure events:

1. Internal failures events:

B typing errors;

B defective print job;

B delayed filing;

B downtime on computer;

B supplies not in stock;

B waiting for repairs;

B absences;

B turnover;

B payroll error; and

B error in accounts.

2. External failures events:

B goods have to be returned;

B customer time and travel to correct company error;

B waiting time for service;

B trouble within warranty time;

B misleading instruction for use;

B lost customers;

B product does not work as advertised;

B damage due to transportation and delivery;

B damage lawsuits; and

B failure to repair first time.

To understand how such failure events should be viewed, first everyone should realize that

some level of hidden costs accompanies every failure event. So, to better understand failure

costs, one should also realize that one failure event will definitely be accompanied by loss in:

B time – people, equipment and space;

B service charges; and

B materials.

3.4. The way to look at failure

Based on Figure 4, it is clear that one failure event will definitely trigger the occurrences of

other non-value-added activities. These activities can further create wastage in:

B time – people, equipment and space;

B service charges; and

B materials.

3.5. The important indicators

Based on Figure 4, we can create some indicators that could be used for monitoring the level

of PQC in various parts of an organization. These indicators are as below:


B poor quality costs indicator due to time waste (PQCIt);

B poor quality costs indicator due to unnecessary service charges (PQCIsc); and

B poor quality costs indicator due to material waste (PQCIm).

These indicators can be further explained, by the following simple formulas:

PQCIt. The first indicator looks into efficiency based on the time element, which indirectly

causes wastage in dollars and cents. Here, we have to look into the actual working hours in

an organization. So, with that in mind, we have:

Actual work hour for a particular time period ¼X

ðxiÞðtkÞ

where:

x ¼ number of days with similar actual working hours;

t ¼ actual work hours;

i ¼ Sunday, Monday, Tuesday, . . . , Saturday;

k ¼ 1,2, . . . ,7 (it could be max seven types of working hours).

To measure the efficiency of people, equipment or space utilization for a particular time

period (it can be per day, per week, per month, etc), the following PQC indicator due to time

waste (PQCIt) can be formulated, that is:

PQCItp ¼ Toal Wasted Time for a particular time period by peoplePðxiÞðtkÞ

PQCIte ¼ Total Wasted Time for a particular time period by equipmentPðxiÞðtk Þ

PQCIts ¼ Total Wasted Time for a particular time period by spacePðxiÞðtk Þ

where

0 , PQCIt , 1

PQCIsc. The second indicator looks into efficiency based on the service charges element,

which indirectly causes wastage:

PQCIsc ¼ Total Unnecessary Service Charges for a particular time period

Total Amount Service Charges paid for a particular time period

Figure 4 The way to look at failure event


where

0 , PQCIsc , 1

PQCIm. Finally, if we want to look at efficiency based on material consumed for a particular

time period, the following Poor Quality Cost Indicator (PQCIm) can be created, that is:

PQCIm ¼ Total Wasted Material ðmoneyÞ for a particular time period

Total Amount Material consumed ðmoneyÞ

0 , PQCIm , 1

Since all three indicators above have a direct link with wastage, by targeting the values of

PQCIt, PQCIsc and PQCIm towards zero, we can actually reduce the wastage created by

poor quality; hence increase the level of efficiency. Another thing is that all of the above

wastage can be shown in terms of monetary loss.

3.6. Data collection

The data collection can be done, using the check sheets that are designed according the

organization’s needs. Here the data can be collected for a particular time period according

to an organization’s reporting needs. What type of data should be collected in order to

measure PQC? The answer to this question can be found from Figure 4. The three basic

elements (Waste) needed which usually act to together when a failure event takes place are:

1. time;

2. service charges; and

3. material.

3.7. A practical scenario

Let’s look at a scenario when a customer makes a complaint. First, we must understand that

a customer complaint is failure event. As mentioned earlier, this failure event would trigger

some activities that are non-value-added for both internal and external customer

satisfaction. So, all the non-value-added activities that are attached (usually hidden) to

this failure event are as below.

Based on Figure 5, we can get a clearer picture of how the elements of waste which were

explained earlier can be generated by the occurrence of a failure event (customer

complaint). These activities that are usually triggered to correct the situation which went

wrong and certainly do not add value for both internal and external customers. The waste

elements are further explained below:

1. Time waste:

B people to handle the complaints;

B usage of equipment such as computers, printers or other machines;

B usage of space for storage of files, documents or the materials; and

B also time taken by customers to make the complaint.

2. Service charges:

B calls made, postal service, faxes and other administration costs to handle a single

complaint; and

B calls made, postal service, faxes and other administration costs to make a single

complaint by the customer.

3. Material:

B papers, forms and other items to handle a single complaint; and

B papers, forms and other items to make a single complaint by the customer.


4. Getting the real hidden failure cost figures

4.0. The proposed method in quantifying the hidden failure costs

The steps in identifying the hidden failure costs are as below:

1. Identify the failure events that occur in the organization.

2. Link the activities that emerge due to that failure event.

3. Quantify the related visible and hidden failure costs.

4. Quantify the hidden costs ratio (HCR) for the specific failure event.

5. Make an estimation of the HCR that is eHCR for various failure events.

6. Quantify the hidden failure costs.

4.1. Identifying the failure event – step 1

An in depth study on a failure event is very important, as it will reveal a lot of hidden

information on wastage. The main idea in quantifying such hidden costs is to see the impact

of a failure event on people, material, equipment and also service charges. Hence, this will

give us a clearer picture of CoPQ (both visible and hidden), which will definitely lead to the

elimination of waste and also a better continuous process improvement.

A case study was conducted at a packaging company, which deals with product packaging.

The data was collected from the quality control department, focusing only on the customer

complaint handling processes. All activities that take place after a customer makes an

official complaint have been identified first. After that a time sheet was designed according

to the needs, based on the discussion with the technical executive (who is directly involved

in handling customer complaint).

Figure 5 A practical scenario when a failure event occurs


The data was collected for about three weeks that was from 19/9/2001 to 10/10/2001. Based

on the data collected an in depth study was conducted. At this company the study focused

only on the complaint handling process due to customer complaint (failure event).

The initial difficulties the author faced were primarily due to the lack of understanding on the

COQ concept. The staff involved in the customer complaint process took instructions from

the technical executive in data collection. However it took at least three or four days to get the

data collection process going smoothly. If we are looking at an organization wide approach,

this step is very important, as it will reveal all types of failure events that may take place in that

organization. Provided that an organization operates in a similar system through out a

particular time period, it will see similar failure events occurring. As mentioned earlier, these

failure events will often be considered as a norm. This approach will give figures at both

macro and micro level of the organization.

4.2. The failure event approach – steps 2 and 3

The data collected are based on the customer complaint as the failure event. At this point the

cost of rejects is what is usually quantified. These costs will be visible as the failure costs and

other costs that are related to that failure event are calculated as part of the administration or

operation costs.

By looking at the data that was collected, we are able see a clear comparison between the

normal practice and the failure event approach. Let’s look at a customer complaint that

occurred between the time periods as mentioned above.

Failure event A (customer complaint).

B This failure event produces rejects as the visible failure costs. By focusing on the

activities that takes place in order to handle this complaint, the hidden failure costs

can be identified.

B In order to quantify these hidden costs, a simple mathematical formula can be

utilized. There are three types of staff that are involved in handling this problem are

the technical executive, QC assistant and the clerk.

B Information on working hours was also gathered. The salary paid for these workers

must also be known in order to quantify the salary per minute paid to them for being

at the office or plant.

The summary of the information is as below:

1. Technical executive:

B Work hour per day (with break, Monday to Friday) is 8.5 hours ¼ 510 minutes.

B Actual work hour per day (without break, Monday to Friday) is 7.5 hours ¼ 450

minutes.

B Work hour per day (without break, Saturday) is four hours ¼ 240 minutes.

B Salary per month is RM 3000.

B Salary per day is RM 100.

B Salary per minute (with break, Monday to Friday) is RM 0.196.

B Salary per minute (without break, Saturday) is RM 0.417.

2. Clerk:

B Work hour per day (with break, Monday to Friday) is 8.5 hours ¼ 510 minutes.

B Actual work hour per day (without break, Monday to Friday) is 7.5 hours ¼ 450

minutes.

B Work hour per day (without break, Saturday) is four hours ¼ 240 minutes.


B Salary per day is RM 23.33.


B Salary per minute (with break, Monday to Friday) is RM 0.046.

B Salary per minute (without break, Saturday) is RM 0.0972.

3. QC assistant:

B Work hour per day (with break, Monday to Saturday) is eight hours ¼ 480 minutes.

B Actual work hour per day (without break, Monday to Saturday) is seven hours ¼ 420

minutes.


B Salary per day is RM 23.33

B Salary per minute (with break, Monday to Saturday) is RM 0.049 (Krishnan et al.,

2000).

The next step is to view the failure event according to their activities. In this case, it is as

below.

Based on Figure 6, we can see that failure event A has triggered some non-value-added

activities. The activities are further explained below:

B There were four forms used.

B Time was taken by clerk to enter basic information, which was five minutes.

B Time was taken to prepare rework report by the QC assistant, which took some 120

minutes.

B A single (A4) peace of paper was used for photo-statting.

B Time was taken for verification and goods treatment by the technical executive, which

took three minutes.

B Equipment (computer) was used for 15 minutes.

B Time taken for photo-statting and filing by clerk, which took ten minutes.

B Time taken to enter rework information by clerk, which took ten minutes.

Using the information above, we can proceed further in quantifying the hidden failure costs.

From the calculation it is found that the hidden failure costs is RM 7.33, while the visible

Figure 6 The activities triggered when failure event A occurred


failure costs (the reject, the value refunded to the customer) is RM 2002.97. Even though the

hidden failure costs seem to be small their existence is undeniable. These costs are usually

overlooked in the normal practice of identifying failure costs. Again, we should realize that

this is a contribution of hidden costs from just a single failure event.

By using the same method above it is also possible to find the hidden failure costs for failure

event B and failure event C (still focusing on customer complaints) as below.

Failure event B (customer complaint). The hidden failure costs is quantified as RM 8.63,

while the visible failure costs (the reject, the value refunded to the customer) is RM 3,990.98.

Failure event C (customer complaint). The hidden failure cost is quantified as RM 3.18, while

the visible failure costs (the reject, the value refunded to the customer) is RM 4,680.00.

It is clear that, the value of the hidden failure costs is not the same for all failure events

relating to customer complaints. It is also evident, that the hidden failure costs for the above

events are very much less than 1 percent of the individual visible failure costs. One other

important thing to note is that the salaries could be included in the operation costs (as salary

is a mandatory cost). The reason for the inclusion of salaries in the calculation is to highlight

that salary is also being paid for non-value added tasks.

4.3. Quantifying the hidden costs ratio (HCR) and the hidden failure costs – steps 4, 5 and 6

Now, we can look at step 4 onwards. At this point we have gained some information on both

visible costs and the hidden costs of the particular failure event. Here, it is proposed that the

ratio between the hidden costs and visible costs is known. So, the Hidden Cost Ratio (HCR)

can be quantified as below:

HCR ¼ Hidden costs

Visible failure costs

This figure should be known for all different types of failure events that occur. Two or more

similar failure events will most likely have a close range of HCR. This is due to the fact that

similar non-value-added activities take place whenever a failure event occurs. So, a single

estimate for HCR is possible for a particular failure event, which will give us the eHCR.

The final step is to quantify the hidden failure costs. At this point a simple formula is

proposed below:

Total hidden failure costs ðTHFCÞ ¼X

ðNi £ eHCRi £ VFCiÞ

where:

Ni ¼ the number of times that particular failure event has occurred.

eHCRi

¼ the estimation of the HCR for a particular failure event.

VFCi ¼ the visible failure costs.

4.4. The application of the proposed new method

Let’s assume that three different types of failure events have occurred at different

frequencies during a specific time period in an organization. Based on the steps mentioned

above, the information shown in Table III can be gathered.

Table III

Failure event Number eHCR Visible costs Hidden failure cost

A 5 0.068 RM 12,500 RM 4,250B 9 0.008 RM 25,000 RM 1,800C 10 0.0093 RM 30,000 RM 2,790


The information from Table III gives us: Total visible costs (TVFC) ¼ RM 67,500; Total hidden

failure costs (THFC) ¼ RM 8,840; So, the total failure costs (TFC) ¼ RM 76,340

Hence, with just three types of failure events that occur at different frequencies during a

specific time period, it is clear that the TFC is 13.1 percent more than the TVFC. In practice

this hidden cost is usually absorbed into various accounts or included as the overhead

costs. Furthermore, some non-value added activities are also considered to be a normal

routine job by many in an organization.

4.5. The model for quantifying the hidden failure costs

The flow in identifying the total hidden failure costs and further the total internal failure costs

can be divided in two stages (as shown in Figure 7):

1. Stage I – at this stage there are a few vital activities that must take place:

B Identify all types of failure events that take place in that organization (according their

preferred division of the organization).

B Identify the relevant non-value-added activities that surround the individual failure

event.

Figure 7 Stage I and II in quantifying the hidden failure costs


B Based on the non-value-added activities, further identify the waste elements such as

time, service charges and materials.

B Quantify the hidden failure costs.

B Quantify also the visible failure cost, which is usually known.

B Next quantify the hidden cost ratio (HCR) for different individual failure events.

2. Stage II – in this second stage the organization is very clear about the all types of failure

events that take in their organization. The frequency of occurrence of individual failure

events is also known. The steps in stage II are:

B Having the list of estimated hidden cost ratio (eHCR) for every different individual

failure event.

B Use the proposed formula to quantify the hidden failure costs (HFC) for every

individual failure event based on the frequency of occurrence.

B Accumulate the total hidden failure costs (THFC).

B Accumulate also the total visible failure costs (TVFC).

B Add both THFC and TVFC to get the total failure costs (TFC).

4.6. The comparison of the proposed and existing method

Existing method:

B The hidden costs will remain hidden.

B Only visible failure costs will be captured.

B We will not know where internally these failures happened.

B Problems are viewed as isolated cases.

B The real costs faced by customers are not quantified.

B The costs contributed by the suppliers are not taken into account.

Proposed method:

B The hidden costs are much clearer.

B We will know where the problem occurred either internally or externally.

B We are able to look at the problem as a whole system.

B Its more customer focused as the costs faced by customers due to failure are also

quantified.

B It looks at the failure event in a much broader way.

B Comparison or improvement can be monitored with the indicators.

B It applies within any required time period.

B It is a very simple approach that allows the usage a unit, section, division or

department level. So, the initial implementation can start from anywhere within the

organization.

B The CoPQ can be monitored at both macro and micro level of an organization.

4.7. The importance of this new proposed method

This method can be applied first in order to reduce the hidden errors and increase the

accuracy of performance measures. At this point, we will be more confident is the accuracy

of the costs of doing business. It is very important that these indicators are taken seriously, in

addition to having quantified the hidden failure costs:

1. It can identify whether any interruption of an employee during work hours is caused by:


B poor management of resources.(people, equipment, space);

B inadequate infrastructure;

B lack of knowledge; and

B poor working environment.

2. It can trigger better understanding the entire of the process or even the system,

identifying systemic problems rather than blaming employees.

3. Continuous improvement is encouraged.

4. Costs of poor quality can be reduced.

5. Various ‘‘hidden’’ related problems in the daily job of an employee can be eliminated

since data about interruptions and wastage are based on their time sheets.

6. Can further improve internal and external customer satisfaction.

To conclude, it is clear that intangible benefits of quality management can be made tangible

by measuring the right things at all times, in particular the measurement of poor cost quality

(Krishnan et al., 2001)

4.8. Difficulties faced while conducting the study

Like any other research work, this study had its obstacles too. The difficulties faced by the

author while conducting the both case studies were:

B Lack of commitment from the top management even though they have agreed initially to

have the study conducted.

B Lack of participation from all members of the organization. Some people viewed it as an

extra job to note down things going not right even though it took very little.

B There remained a failure by some to understand the concept of COQ. There was still an

assumption that the objective of this activity is to find individual mistakes, so that blame for

them could be found.

B People also assumed that whatever they are doing in the organization was always their

job and made a positive contribution, some failed to realize that they may be handling a

task generated by a failure event. This non-value-added task could be avoided if there

were no such failure events.

B There were some data that were difficult to obtain due to confidentiality. This sometimes

made it difficult to quantify the hidden failure costs.

B Some people also believe that if their failure rate is much less than others, this means they

are still doing fine. They are not concerned about the failure events are occurring in the

organization. It is considered as a norm.

B Some executives were afraid to disclose some important figures that were needed to

quantify the relevant costs.

B Implementation of the approach is also affected if there is insufficiently strong leadership.

Finally, these are the words that should be always remembered by anyone interested in

quality improvement, according to R.M. McNealy (1994, cited in Dahlgaard et al., 1998):

If we can define it – we can measure it;

If we can measure it – we can analyze it;

If we can analyze it – we can control it;

If we can control it – we can improve it (Dahlgaard et al., 1998).

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available at: www.cpaonline.com.au/Archive/9805/pg_aa9805_reportingq.html

Further reading

Dale, B.G. (1994), Managing Quality, Prentice-Hall International, Hemel Hempstead.

About the author

Suresh Kumar Krishnan is a management consultant at QPIC Consultants SDN BHD, Taman

Miharja, Cheras, Kuala Lumpur Malaysia. He can be contacted at: [email protected]


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