Research and Innovative Methodology on Closed-Loop Analysis & Improvement Mechanism Based on Cost of Quality System

The concept “cost of quality (COQ)” is well-known and widely used in all kinds of economic activities, especially manufacturing industry. However, the installation of COQ has always been the major research subject and little study is carried out in terms of tracking and improvement mechanism after building COQ system. The aim of this paper is to present novel research and innovative methodology of a closed-loop analysis & improvement mechanism when es-tablishing COQ system in manufacturing industry. Eco-nomically, quality failure costs that consist of external failure costs and internal failure costs are reduced significantly through increasing targeted investment in quality control costs that consist of prevention costs and appraisal costs in practice. The innovative methodology verifies that enterprise can achieve dramatic increase of economic and social benefits through building COQ system and implement-ing closed-loop analysis & improvement. In addition, the innovative methodology provides theoretical support and methodological reference for enterprises in manufacturing industry to build COQ system and carry out closed-loop analysis & improvement. © 2022, Tamkang University. All rights reserved.