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

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“Wished I had understood that Cost of Quality stuff better” SYSTEMS Quality Consulting 90
Key Points • COPQ is big, usually 15-20% of sales! • COPQ is usually 3-5X profits, can be 10X. • Understanding poor cost of quality drivers is the key to understanding the right project to work on. • Must capture white collar/indirect COPQ costs. • Prevention/Appraisal costs have to go up, before overall COQ can go down. There are no exceptions to this! SYSTEMS Quality Consulting 91
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’
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Juran and Crosby on COPQ The cost o
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Example 1 Paper Mill - April 2004 R
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Example 1 Paper Mill - April 2004 R
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Example 2b Transportation Industry
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“Inspection Inspection with the a
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Traditional “Strategy” • Hist
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Page 25 and 26:
Prevention The costs of all activit
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Prevention In the ideal situation,
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Income Statement Income Sales $4,10
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Internal Failures All costs resulti
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• The goal is to identify all int
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External Failures - Examples The co
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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 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: The COQ Process 1. Commitment 2. CO
Page 93: SYSTEMS Quality Consulting Training
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Cost of Quality As a Driver for Continuous - Systems Quality ...

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