Cost Benefit Analysis


How did you handle cost benefit analysis in the registration during your implementation?

  • Lucent

    Lucent has used an activity-based costing methodology to estimate the costs of QMS registrations. Lucent developed a questionnaire for unit QMS representatives to answer that outlined the various activities involved with getting the registration initially and then the ongoing costs to maintain the registration going forward. These included both external (e.g., registrar costs) and internal (e.g., internal audits, measurement implementations, process changes, training. etc.) Copies of the questionnaires are attached. In addition, we needed to know the number of locations involved to understand the expanse of audits etc. If an organization were already ISO registered, but pursuing TL registrations, the questionnaire asked for existing ongoing ISO costs and then the incremental delta costs for adding TL 9000 adders and metrics. Activities were turned into time and time into dollars.

    Read the complete interview (PDF,15KB)

  • BIZPHYX

    BIZPHYX is a consulting company that provides counsel and advice for TL 9000 implementation. For cost/benefit analysis or TL 9000 ROI-type analysis, they recommend that their customers use an activity based cost stream methodology. They would pick the processes that would be highly impacted by TL 9000 implementation and do an activity-based cost study, (e.g., map out the process and define all of its activities, determine how much time it takes to do various activities, determine the base cost of the person, systems, etc. performing the activities and then develop a baseline process cost). In this baseline study, the client determines the quality performance rate and amount of rework, and factors that into the baseline costs. After TL implementation and registration, they would perform the same activity-based cost study to determine the financial impact/benefit of TL.

    Read the complete interview (PDF,11KB)