Cost Of Quality

Quality costs money. Poor quality costs more!

Most people look at quality activities as a cost: inspections, audits, training, documentation, supplier evaluations, FAI, control plans, etc.

But the real cost comes from situations when those activities are skipped: rework, scrap, line stops, delayed shipments, customer complaints, expedited freight, warranty claims, lost trust, and loss of future business.

That is why it’s important to evaluate your Cost of Quality early in the manufacturing phase of your project. Evaluating your COQ gives you an understanding of where and how you should allocate your time and resources to ensure that you aim for the lowest COQ possible. 

In simple terms, COQ can be calculated by considering this: Money spent to prevent issues + money spent to detect issues + money lost when issues go undetected by the quality systems. That is usually broken out into the following categories: 

1. Prevention Costs: Activities performed to prevent quality issues.

Training, DFMEA, PFMEA, Control Plans, Design Reviews, Supplier Validation, Work Instructions, etc. 

2. Appraisal Costs: Activities performed to check, inspect and test for quality issues.

Travelers, QC/QA checklists, Incoming Inspections, FAI, Audits, End-of-line testing, FPA’s, etc. 

3. Internal Failure Costs: Activities performed when defects are found prior to ship out.

Line Stop/production delays (missed deadlines), Scrap, Rework, trouble shooting, Root Cause Analysis, Retesting, Extra labour,  retraining, redesign work, etc. 

 4. External Failure Costs: Non-conformity/quality issues is discovered after the product reaches the customer.

Returns, Warranty Claims, Recalls, Field Failures, Customer complaints, Replacement parts, and the worst of them all: Loss of  Business. 

At the end of the day, the goal of quality is not to add unnecessary cost to the business, but to reduce the cost of failure. When you invest earlier in prevention, process controls, and a strong QMS, you are not just improving quality, you are protecting your time, margins, client trust and your future business. 

If you are at a stage where you are evaluating your Cost of Quality to build better quality controls into your product, Tensen Design + Manufacturing can help. Reach out to us to discuss how we can support your design, manufacturing and quality improvement needs.