History of Cost of Poor Quality
The Cost of Poor Quality concept was fully developed by Dr. Joseph Juran, and can be read in great detail in his book Juran's Quality Handbook. Juran writes that COPQ is measured for 3 reasons:
- To quantify the size of the problem to justify improvement efforts
- To guide the development of the improvement efforts
- To track the progress of the improvement initiatives
Lessons Learned
Some critical lessons about quality costs were learned during the early days (circa 1950) of COPQ-
The language of money is essential. Money is the language most often spoken by top management. Development of a metric easily understood by management assists in showing not only how large the quality costs are, but also costs associated with support processes as well.
The term “Quality Costs” is highly misunderstood. This is still true today. These expenses can be defined as the amount to operate the quality department, the cost to ensure that customer requirements are met, or the expense of finding and reworking defects.
Measuring and publishing COPQ does not solve the issue. Sure, awareness of problems can help reduce these expenses. Awareness alone is never enough to eliminate the issues. True problem resolution will only come from the implementation of structured problem solving strategies.
Quantification of the size of the issue often has a remarkable effect on upper management. The depth of the problem is identified, as well as other problem areas that are unearthed during the investigation of the problem. This confirms the issue in terms of money and identifies support processes that are contributing to the overall issue.
