According to the American Society for Quality, “Cost of Quality is a method that allows organizations to determine the costs associated with producing and maintaining quality products.” We’ll explore the cost of quality and finish with a video explaining cost of quality and its components.
Measuring the Cost of Quality
An article titled “Measuring the True Cost of Quality: Practices to Make Quality an Asset” from Berlin Packaging includes a detailed listing of the components of Cost of Quality (COQ) measurement.
The main categories listed along with their subcategories are:
- Cost of Poor Quality
- Internal Failure Costs
- External Failure Costs
- Cost of Good Quality
- Prevention Costs
- Appraisal Costs
After discussing the categories, the article covers some methods to ensure good quality and finishes with a short case study of how Berlin Packaging addresses quality
You can read the article here.
Cost of Quality in a Moroccan Clinical Laboratory: Morocco
In a paper titled “Cost of quality in healthcare: A case study in a clinical laboratory” authors Mouna Zahar, Abdellah El Barkany, and Ahmed El Biyaali discuss the use of the Cost of Quality model to give detailed estimates of the COQ-related activities at a clinical laboratory located in Morocco.
The authors include a survey of published literature on various COQ models and show the classical Juran Cost of Quality curve with a revised modern model.
As the authors state later in their article:
The optimal level of COQ has been the source of much debate. Under the traditional
P-A-F view, optimal COQ is reached at the point when the costs of improved quality
exceed the benefits. More recent quality economic models argue that spending on
prevention can be justified until the point where there are 0 defects or deficiencies
They then conclude with the application of the COQ model in the clinical laboratory.
You can read the paper here.
[Citation: Zahar, M., El Barkany, A. and El Biyaali, A. (2016) ‘Cost of quality in healthcare: a case study in a clinical laboratory’, Int. J. Productivity and Quality Management, Vol. 17, No. 4, pp.536–548]
Cost of Quality as a Percentage of Sales
In an article titled “The Cost of Quality” author Jon Hartney discusses the Cost of Quality as a percentage of sales for various industries and gives an example of its calculation for a furniture manufacturer.
You can read the article here.
Implementing Cost of Quality in Malaysian Manufacturing Companies: Malaysia
In a short study titled “The Implementation of Cost of Quality (COQ) Reporting System in Malaysian Manufacturing Companies. Difficulties Encountered and Benefits Acquired.” Authors Murugan Rasamanie and Kanagi Kanapathy discuss the difficulties encountered in the implementation of Cost of Quality (COQ) reporting among manufacturing organizations in Malaysia..
The study lists:
- The Difficulties Encountered
- Benefits Achieved
You can access the study here.
Explaining the Cost of Quality, the 4 Cost Categories and Juran’s Quality Cost Curve
Learn the cost of quality and its components in the video from CQE Academy.
You can watch the video here.
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