The cost of quality, or more accurately the cost of poor quality (COPQ), was described by Dr J.M. Juran as “the sum of all costs that would disappear if there were no quality problems”. This definition applies to all sectors; and to for-profit and not-for-profit organizations.

COPQ is the costs generated as a result of producing defective material or delivering defective service.Quality professionals have often looked at the cost of poor quality (COPQ) as one approach to quantifying the financial benefits of quality actions.

Represents the difference between

The actual cost of production or service - What the cost would be if the process were effective in manufacturing products that met customer needs and were defect free.

COPQ = Costs (external failures + internal failures + appraisal + preventive action)

Elements of COPQ
External Failures
    Costs for defects found by the customer:

  • MDRs,
  • Reports of corrections and removals,
  • Field service corrections,
  • Field service bulletins, and
  • Software patches.
Internal Failures
    Cost for defects found by R&D or Mfg

  • Unclear requirements
  • Improper design and implementation
  • Incorrect test documentation
  • Incoming inspection defects
  • In-process testing defects
  • Final acceptance testing defects
  • Rework
    Costs for checking defects including:

  • Review of system specifications (R&D),
  • Review & inspection during manufacturing processes,
  • Review of quality records, and
  • Audits
Preventive Action
    Cost for initiatives to improve processes:

  • Use techniques to better understand requirements
  • Employ programs to reduce design defects
  • Implement tools to reduce manufacturing defects
  • Institute quality improvement programs

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