How Poor Quality is Costing Your Organization

The Cost of Poor Quality (COPQ) and its consequences can be difficult for organizations to measure, and it can be a struggle to convince executive stakeholders that Quality improvement projects to mitigate COPQ have real value and are not simply cost centers. The primary consequences of COPQ are the most obvious. Costs associated with process failures inside the organization include:

  • Excess scrap and waste material created by inefficient manufacturing processes,
  • Rework on defective or damaged products before they ship to market, and
  • Retesting and analyzing processes and procedures to determine point of failure.

If poor Quality is not caught before products or services make their way to end customers, the external costs can include those associated with:

  • Lawsuits,
  • Recalls,
  • Warranties,
  • Complaints,
  • Returns,
  • Repairs, and
  • Field support.

The traditional cost of poor Quality has usually been assumed to be between four percent and five percent of an organization’s annual revenue.[i]Read more...