Re: Cost of Quality

Posted by Glenn Black, PQA on September 30, 2002 at 09:06:26:

In Reply to: Cost of Quality posted by Sue Towers on September 30, 2002 at 09:01:20:

Yes, COQ (Cost of Quality) by traditional definition, includes much more than the three items you mentioned. If you include everything, your COQ will probably be around 30% to 35% for a profit orientated organization, 40% to 60% for a not-for-profit organization (ie. hospitals, charities, government, etc.)

For Six Sigma processes, COQ can get as low as 1%.  That has the effect of giving 7 times the profitability that a typical North American manufacturing company enjoys.  What would you boss say if you were able to help the company achieve 7x the current profitability?

The main purpose of COQ is to help management focus on the most critical issues. If the measurement is not comprehensive, it will mis-lead people rather than help.

Focus on the essential issues is critical. Without a good measurement, you're lost in the fog.

For more information, see  COQ    Cost of Quality

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