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    COPQ

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    abdul2030
    The document defines cost of poor quality as costs that would disappear if systems and processes were perfect, including costs associated with rework, replacement, and lost goodwill. It states that cost of poor quality can range from 5-35% of sales. The document then provides more details on the types of internal and external failure costs that make up the overall cost of poor quality. It discusses control methods like setting an optimum quality cost level and using the Plan-Do-Check-Act model to manage quality objectives.

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    COPQ

    Uploaded by

    abdul2030
    23 views2 pages
    The document defines cost of poor quality as costs that would disappear if systems and processes were perfect, including costs associated with rework, replacement, and lost goodwill. It states that cost of poor quality can range from 5-35% of sales. The document then provides more details on the types of internal and external failure costs that make up the overall cost of poor quality. It discusses control methods like setting an optimum quality cost level and using the Plan-Do-Check-Act model to manage quality objectives.

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    The document defines cost of poor quality as costs that would disappear if systems and processes were perfect, including costs associated with rework, replacement, and lost goodwill. It states that cost of poor quality can range from 5-35% of sales. The document then provides more details on the types of internal and external failure costs that make up the overall cost of poor quality. It discusses control methods like setting an optimum quality cost level and using the Plan-Do-Check-Act model to manage quality objectives.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    23 views2 pages

    COPQ

    Uploaded by

    abdul2030
    The document defines cost of poor quality as costs that would disappear if systems and processes were perfect, including costs associated with rework, replacement, and lost goodwill. It states that cost of poor quality can range from 5-35% of sales. The document then provides more details on the types of internal and external failure costs that make up the overall cost of poor quality. It discusses control methods like setting an optimum quality cost level and using the Plan-Do-Check-Act model to manage quality objectives.

    Copyright:

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    Download as DOC, PDF, TXT or read online from Scribd
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    You are on page 1of 2

    Cost of poor quality is defined as costs that would disappear if systems,

    processes, and products were perfect. In other words Cost of 'not doing it right
    the first time.' It includes cost of lost goodwill, and expenses incurred in refund,
    replacement, rework, scrapping, etc.
    Cost of Poor quality range from 5-35 % of sales.
    The language of money improves communication between middle managers and upper
    managers.

    COQ = COPQ( Internal Failure cost & External Failure Cost) + (Prevention & Appraisal costs)

    >70%

    Internal failure costs


    1. Costs of deficiencies discovered before delivery.
    2. Avoidable process losses and inefficiencies that occur even when
    requirements and needs are met.
    It includes
    1. Purchasing - late deliveries to us, reject, rework, research replacement
    suppliers
    2. HR - high staff turnover, retaining
    3. Finance & Admin - late data, data errors
    4. Operations - delays, scrap, rework, excessive stock, breakdown
    maintenance, unplanned overtime
    5. Design - excessive redesign, abandon design, late design
    6. IT downtime

    External Failure Costs

    1. These are costs associated with deficiencies that are found after product is
    received by the customer
    2. Also included lost opportunities for sales revenue.

    It includes
    1. Warranty claims, service engineer revisits, re-repairs
    2. Customer complaints, lost accounts
    3. Returns, product recalls and patches
    4. Credit notes, discounted sales as compensation
    5. Bad press, customer demerits, loss of potential revenue, litigation
    6. Late or replacement deliveries to customer + transport costs, visits to
    placate customer
    Control
    There is an optimum level of quality costs and this can by identified by estimating
    the amount which might economically be gained by an improvement programme

    Plan, Do, Check and Act


    Plan, Do, Check and Act is a useful model in developing and managing quality
    objectives. Logically, PLANning stems from ISO 9001 Data Analysis (8.4). This
    requires that performance is analysed; such things as supplier performance,
    customer satisfaction and internal performance. Where analysis shows poor
    performance, this data should be used to set quality objectives

    Identification
    Calculation
    Observation
    Planning
    Implementation

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