Expanding the Definition of Quality Costs Beyond the Conformance and Nonconformance Dichotomy

Satisfying customer's needs is the main goal in both quality and innovation management. However, the relationship between innovation management and quality management is not fully understood in the quality literature. One way to understand this complex relationship is via cost of quality (COQ) studies. COQ is the sum of conformance and nonconformance costs, but the conformance-nonconformance dichotomy seems to be ambiguous and arbitrarily defined. The ambiguity in the conformance and nonconformance terminology prevents observing the relationship between innovation and quality management. In the current work that ambiguity is demonstrated via the analysis of a paradox between properly managing and reducing product returns in consumer electronics. Also, the inhibition mechanism preventing the ability to observe the abovementioned relationship is made visible. It is critical and necessary to redefine the COQ not only on conformance and nonconformance terms, but also on a holistically and consistent basis to aid in quality policy making process.