3. What is CoQ?
Cost of Quality can be defined as the cost which
is allied with the quality of a product. It is the sum
total of costs which is incurred while maintaining
quality up to standard levels plus the cost of
failure to maintain that level. Cost of Quality will
not incur if the quality is free from faults.
The "cost of quality" isn't the price of creating a
quality product or service. It's the cost of NOT
creating a quality product or service.
4. Total Cost of Quality
Cost of Poor Quality (COPQ)
Internal Failure Costs: Services or products not meeting
the requirements of the consumers or users and is
found before the time of the release of services and
products to the external customers.
External Failure Costs: When customers are dissatisfied
due to deficiency found at post delivery period of
products
Cost of Good Quality (COGQ)
Appraisal Costs: The necessity to control services as
well as the products to make certain a high excellence
level in all the stages
Prevention Costs: Costs that are designed to prevent
poor quality from arising in products or services
5. Cost of Poor Quality (COPQ)
Internal Failure Costs:
Scrap or product waste
Rework
Re-inspection of the process (what went wrong?)
Material review and revision
Retraining
External Failure Costs:
Processing customer complaints
Bad customer reviews
Loss in customer loyalty
Loss in sales
6. Cost of Good Quality (COGQ)
Prevention Costs:
New product review
Quality planning
Supplier capability
Process capability evaluations
Quality improvement team meetings and projects
Quality education and training
Appraisal Costs :
Incoming and source inspection/test of purchased
material
In-process and final inspection/test
Product, process or service audits
Calibration of measuring and test equipment
8. Conclusion
The sum of the costs represents the difference
between the actual cost of a product or service
and what the reduced cost would be if there
were no possibility of substandard service, failure
of products or defects in the process.
The way to reduce the cost of quality to a
minimal level is by building the quality as part of
the processes.
Do it perfectly right from the beginning.
