'I can't say that this was our finest hour! The total bill for the product recall was...

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'I can't say that this was our finest hour! The total bill for the product recall was over $4 million and if you count the cost to our reputation, it was probably even higher. Even before that the whole project was in trouble. After the design modifications we were left with a brand new robotic handling device that was inappropriate. That cost over $200,000. Add to that another $150,000 for other modifications to the production process and you can see the impact of leaving it late to make design changes. Recommissioning the market research during the final design stage cost $30,000. It makes the budget overrun on the actual design activity of $2000 look quite respectable. In fact, the original design engineers seem to be the only people who have kept within budget.' 

(a) Are these quality-related costs related in any way? 

(b) Do you think the speaker is right in implying that the designers are the only ones to come out of this with any credit?

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Operations Management

ISBN: 9780273708476

5th Edition

Authors: Nigel Slack, Stuart Chambers, Robert Johnston

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