Track: Operations Management

Abstract

Abstract

The purpose of this paper is to evaluate how the cost of quality affects the defense sector in South Africa. The high cost of poor quality is one of the reasons why South Africa's military industry's profits and exports are decreasing. Costs of poor quality (COPQ) affects production efficiency and profitability to customer satisfaction and public reputation. To assess the impact of the cost of poor quality on a company's productivity, profitability, and customer satisfaction, the interview questions were created and distributed to four different military firms to collect data that would allow the researcher to assess the COPQ's influence on each company's productivity. The interview also assisted the researcher in documenting the primary or common causes and effects of poor quality in the defense sector, allowing the author to effectively suggest a strategy to reduce the sources of poor-quality costs in military businesses. To identify and categorize internal and external failure costs from various defense organizations as well as to establish a method for evaluating the cost of poor quality to estimate the impact on an organization, the data entry forms in table 1 to table 4 below were created to record all the poor-quality costs incurred in 2020 that were recorded in each company's database. This helps the researcher calculate the cost of poor quality in 2020 for each company and determine the impact on the company's profitability. The outcomes of the research indicate that the cost of poor quality influences the defense industry’s profitability, productivity, and customer satisfaction. According to the research, a company’s productivity, profitability, and customer satisfaction can increase if the cost of poor-quality decreases.

Keywords

 Cost of poor Quality, Customer satisfaction, Profitability, Productivity and Defense industry.