Cost of Quality As a Driver for Continuous - Systems Quality ...

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POC PONC Price of Conformance and Price of Nonconformance Over Time Total Cost of Quality POC is increased initially, then slowly decreased over time But, POC never goes away completely Year 1 Year 2 Year 3 Year 4 Year 5 Over time, PONC is reduced to 1/10 - 1/20 of its original level SYSTEMS Quality Consulting 40
POC PONC THE Barrier to Reducing COPQ Total Cost of Quality Year 1 You must INCREASE the POC, mostly Prevention costs, BEFORE COPQ will start to drop. SYSTEMS Quality Consulting 41
Page 1 and 2: Cost of Quality as a Driver for Con
Page 3 and 4: 1. Linking Quality Improvement to P
Page 5 and 6: History/Background of COQ Armand Fe
Page 7 and 8: History/Background of COQ Crosby’
Page 9 and 10: Juran and Crosby on COPQ The cost o
Page 11 and 12: Example 1 Paper Mill - April 2004 R
Page 13 and 14: Example 1 Paper Mill - April 2004 R
Page 15 and 16: Example 2b Transportation Industry
Page 19 and 20: “Inspection Inspection with the a
Page 21 and 22: Traditional “Strategy” • Hist
Page 25 and 26: Prevention The costs of all activit
Page 27 and 28: Prevention In the ideal situation,
Page 29 and 30: Income Statement Income Sales $4,10
Page 31 and 32: Internal Failures All costs resulti
Page 33 and 34: • The goal is to identify all int
Page 35 and 36: External Failures - Examples The co
Page 37 and 38: Income Statement Income Sales $4,10
Page 39: Sales: $4,100,000 Profit: $400,660
Page 43 and 44: In the Beginning COQ Category Matur
Page 45 and 46: Something to Think About… Results
Page 49 and 50: Understanding Cause and Effect in C
Page 51 and 52: Any Similarity? Effective Quality I
Page 53 and 54: The Cause and Effect Framework Step
Page 55 and 56: The Cause and Effect Framework Step
Page 57 and 58: Short-Term Cost of Quality and Tota
Page 61 and 62: • Ad-hoc informal system Two Appr
Page 63 and 64: Advantages and Disadvantages of an
Page 65 and 66: Advantages and Disadvantages of a
Page 67 and 68: Starting a COQ Program 1. Determine
Page 69 and 70: Potential COQ Assessment Problems
Page 71 and 72: For every cost, and cost category,
Page 73 and 74: Cost Driver Analysis • Definition
Page 75 and 76: What is it? Cost Driver Analysis A
Page 77 and 78: Cost Driver Analysis-How To 3. Comb
Page 79 and 80: Poor-Quality- Cost Element Late shi
Page 81 and 82: $198,714 X 80% $158,971 X90% $143,0
Page 83 and 84: $198,714 X 80% $158,971 X90% $143,0
Page 85 and 86: Last Thoughts SYSTEMS Quality Consu
Page 87 and 88: Failure To Include White Collar Cos
Page 89 and 90: The COQ Process 1. Commitment 2. CO
Page 91 and 92:
Key Points • COPQ is big, usually
Page 93:
SYSTEMS Quality Consulting Training
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Cost of Quality As a Driver for Continuous - Systems Quality ...

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