Question

Give examples of the COPQ (internal and external failure costs) and the cost of quality assurance (prevention and appraisal) costs, using relevant industry example(s) to illustrate your point(s).

Compare and contrast the supply chains for McDonald’s and for Toyota. Be detailed and specific.

Answer 1

Internal failure cost are due to poor quality rejection in production and cost incurred to scrap or rectfy them to get to acceptable quality

Cost of quality assurance deals with settings up of quality Management system to prevent the the failures e.h.setting up of quality plan, specifications, measurement and monitoring equipments,inspection and quality control activities.

Supply chain of both McDonald and Toyota is based on the principal of mutual trust and win win business model, standardization of parts/raw materials thereby lowering the cost of supply chain.

The contrasting difference is Toyota works on pull strategy across the value chain, uses, JIT, Kanban to lower the inventory cost and wastage. Where as McDonald is pull until the restaurant and then it's push towards customer.