Objectives
  Objectives
      Identify potential benchmark measures 
       of cost/benefit of quality management 
       system adoption by agriculture.
      Set scope of the project
      Select summarizing fiscal indicator of 
       costs and benefits measures
  Dual Roles for ISO 9000/9004
  Dual Roles for ISO 9000/9004
      QMS for fulfilling customer, regulatory, 
       etc., requirements (ISO 9000)
      “Management should consider 
       development of innovative financial 
       methods to support and encourage 
       improvement of the organizational 
       performance” (ISO 9004 – Guidelines 
       for performance improvements)
  Allocation of Costs: Process Approach
  Allocation of Costs: Process Approach
      Early methods of tracking quality costs 
       was too limited “focus on cost of non-
       conformance i.e. external and internal 
       failure costs”. (Juran)
      Process-cost broadens economics of 
       quality by classifying cost of non-
       conformance and cost of conformance 
       I.e. “costs incurred when a process is 
       running without failure” (Schottmiller)
  Process Approach: Added Benefits
  Process Approach: Added Benefits
      Utilize cost of non-conformance (often 
       called Cost of Poor Quality) and cost of 
       conformance = greater cost saving 
       opportunities may be available in 
       reducing cost of conformance (Schottmiller)
   Process Costing
   Process Costing
           Allows the tracking and reduction of costs 
             normally associated with efficiency in 
             addition to effectiveness (quality)” (Schottmiller)
           Process simplification in addition to 
             reduction of errors become objectives 
             (Schottmiller)
           Relate the economics of quality to the 
             amount of activity performed (ISO/TR 10014: Economics of 
             Quality)