An exploratory study on cost of quality implementation in Malaysia: The case of Penang manufacturing firms

Abstract

The main purpose of this study is to explore the cost of quality implementation, the motivation to implement it, and its effect on Malaysian manufacturing firms. A mail survey using a structured questionnaire was used to gather data. The population of the study covers manufacturing firms located in Penang that were listed on the investPenang website [Invest-in-Penang Berhad. (2008). InvestPenang directory. Retrieved November 2, 2008, from http://investpenang.gov.my/biz_dir.php] and in the Federation of Malaysian Manufacturers [(2007). FMM Directory 2007: Malaysian industries (38th ed.). Author] directory. Quality managers and finance managers were selected as key informants because they were deemed to be knowledgeable about the practice of cost of quality. The results show that the implementation of quality costs plays an important role among manufacturing firms, particularly in Penang, as the implementation has helped to reduce customer complaints, rework, warranty expenditure, failure costs, and total quality costs as well as improving the sales volume. The findings suggest that implementation improves firm performance; as such more companies should look at the implementation of cost of quality as a viable alternative to improve their bottom lines. This study adds to the literature by providing a background to the current status of cost of quality implementation in the Malaysian manufacturing sector.

Keywords:

• cost of quality
• implementation
• motivation
• impact
• manufacturing firms
• northern Malaysia