Cost of Quality (COQ) is a measure of costs associated with the achievement or non achievement of product or service quality.
Quality costs are the total of the Cost of Conformance (Prevention Cost + Appraisal cost) and Cost of Non Conformance (Internal Failure Cost + External Failure Cost)
Prevention Costs are the costs of all activities to prevent poor quality products and services
Appraisal Costs are the costs associated with measuring products or services to ensure conformance to customer’s specification and requirements
Internal Failure Costs are the costs resulting from products or services that not conforming to specification and requirements prior delivery or shipment to customer
External Failure Costs are the costs resulting from products or services that not conforming to specification and requirements after delivery or shipment to customer
Genichi Taguchi stated that: ‘organization can improve quality without increasing cost’ and ‘organization can reduce cost by improving quality’
Therefore, Cost of Quality can be reduced through quality improvement projects that requires top management commitment and trainings.
In summary, organization can achieve optimum level of Cost of Quality by identifying and analyzing the relationship among the prevention, appraisal and failure costs and match a quality level of products or services that acceptable to the customer.
Read More :
Quotes : Quality, Leadership, Custormer
Quality Gurus : Deming, Juran, Crosby, Feigenbaum, Ishikawa
Quality Book : Table of Contents, Chapter 1: Definition of Quality, Chapter 2 : Customer Need, Chapter 3 : Process Management, Chapter 5 : Training for Quality, Chapter 7 : Quality Improvement
Quality Tools : Pareto Diagram, Control Chart
Quality in Industry : Food,
Quality Program : 5S
Quality Award : MBNQA