Quality is a vital concept that has important bearing on the functioning of any system. In order to control the quality effectively, it has to be systematically planned. Further, the quality in the system has a significant impact on the cost. The cost and flow dimensions of any manufacturing or socioeconomic system can be very well modelled and analysed in the framework of physical system theory (PST), which is based on the concept of a linear graph and deals with two categories of variables; an ‘across’ variable and a ‘through’ variable. The “across’ variables are governed by the law of compatibility, whereas the ‘through’ variables are governed by the law of continuity. The quality variables are not governed by the strict definitions of the “across’ and ‘through’ variables and the constraints imposed on them. Hence, in order to utilize the PST framework for modelling the quality variables in addition to the cost and flow variables, we attempt to develop an extended framework with quality as a third category of variables. An overview of the PST concepts is provided and the need for an extended framework is discussed. Then, the extended framework of the PST is presented with the modelling of basic processes, i.e. transformation, transportation and storage, in the developed framework with additional quality equations and functions. The proposed framework is illustrated with the simple example of a manufacturing system with three stages of production.