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Cost of Poor Quality

Discussion in 'IATF 16949:2016 - Automotive Quality Systems' started by John C. Abnet, Jan 4, 2021.

  1. John C. Abnet

    John C. Abnet Well-Known Member

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    Good day QFO family.
    Some questions specific to this topic...
    1- Must COPQ always be quantified as a monetary ($) amount?
    2- What about qualifying instead of quantifying?

    Thoughts?
     
  2. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    COPQ can have clear financial impacts that are measurable in materials, fines or fees, and time-based losses including assets overhead and employee time.

    Others are less clear such as loss in market share. A third type of hard-to-quantify cost is what accountants call opportunity costs, which is the missed potential through resources (including time) being spent on something else.

    Since the above can be so hard to put a dollar amount to, I suggest for them not to try, but to identify a different way to recognize progress or its lack. There is no reason that a COPQ dashboard can't recognize both qualitative and quantitative COPQ.
     
    normhowe and John C. Abnet like this.
  3. normhowe

    normhowe New Member

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    Some of these costs are very difficult to quantify. So we need to think about the purpose of accumulating the data. In the end, somebody needs to make a decision: either we fix the problem or we move on to the next one. The accuracy of the measurement should be enough to justify that decision. Spending more money to refine measurement isn't necessary once you've made the decision to act.
     
  4. John C. Abnet

    John C. Abnet Well-Known Member

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    Excellent reply @normhowe . Welcome to the site.

    Be well.
     
  5. Andy Nichols

    Andy Nichols Moderator Staff Member

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    If cost doesn't get someone's attention, what does?
     
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