Cost of Quality (COQ) was first proposed by Armand Vallin Feigenbaum, an American who initiated "Total Quality Management (TQM)", and it literally means the cost incurred to ensure that a product (or service) meets the specified requirements and the loss incurred if the specified requirements are not met.
The literal meaning itself is less important than the proposition behind the concept that organizations can invest in upfront quality costs (product / process design) to reduce or even prevent failures and eventual costs paid when customers find defects (emergency treatment).
The cost of quality consists of four parts:
1. External failure cost
Cost associated with defects discovered after customers receive the product or service.
Examples: Handling customer complaints, rejected parts from customers, warranty claims, and product recalls.
2. Internal failure cost
Cost associated with defects discovered before customers receive the product or service.
Examples: Scrap, rework, re-inspection, re-testing, material reviews, and material degradation
3. Assessment cost
Cost incurred for determining the degree of compliance with quality requirements (measurement, evaluation, or review).
Examples: inspections, testing, process or service reviews, and calibration of measuring and testing equipment.
4. Prevention cost
Cost of preventing poor quality (minimize the costs of failure and evaluation).
Examples: new product reviews, quality plans, supplier surveys, process reviews, quality improvement teams, education and training.
Post time: Oct-18-2021