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

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Internal Failure costs Scrap $66,500 14.9 Repair $1,900 0.4 Rework $2,500 0.6 Failure analysis $4,000 0.9 Total Internal Failure costs $74,900 16.8 External Failure costs Failures - manufacturing $14,500 3.2 Failures - Engineering $7,350 1.6 Penalties $198,714 44.4 Failures - Sales $4,430 1.0 Warranty charges $31,750 7.1 Failure analysis $7,600 1.7 Total External Failure costs $264,344 59.1 Total Quality Costs $447,144 100 SYSTEMS Quality Consulting 78
Poor-Quality- Cost Element Late shipments Penalties Incorrect shipments Partial shipments Cost Drivers SYSTEMS Quality Consulting 79
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 17 and 18:
Page 19 and 20:
“Inspection Inspection with the a
Page 21 and 22:
Traditional “Strategy” • Hist
Page 23 and 24:
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 and 40: Sales: $4,100,000 Profit: $400,660
Page 41 and 42: POC PONC THE Barrier to Reducing CO
Page 43 and 44: In the Beginning COQ Category Matur
Page 45 and 46: Something to Think About… Results
Page 47 and 48: 1. Linking Quality Improvement to P
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 59 and 60: 1. Linking Quality Improvement to P
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: Cost Driver Analysis-How To 3. Comb
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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