COPQ: Non-Quality and Six Sigma Costs
As it is known, Six Sigma is a problem-solving methodology, which improves the quality of products and, consequently, increases customer satisfaction.
COPQ means the costs of Poor Quality.
Knowledge of COPQ allows an organization to determine the extent to which its resources are wasted.
Having such information allows an organization to determine the potential savings that can be achieved by implementing process improvements.
There are four categories of quality costs to consider in the COPQ. These are as follows:
Each company can calculate COPQ differently.
COPQ can provide topics for Six Sigma projects. It would be ideal to attack first of all the cost generators of non-quality (starting with the client's problems), to continue with those that affect the business and to remain acceptable, up to a level, the prevention costs.
COPQ means the costs of Poor Quality.
Knowledge of COPQ allows an organization to determine the extent to which its resources are wasted.
Having such information allows an organization to determine the potential savings that can be achieved by implementing process improvements.
There are four categories of quality costs to consider in the COPQ. These are as follows:
- External costs - are warranty and penalty costs, returns of non-compliant products, customer re-invoicing, etc.
- Internal costs - could be costs incurred due to reprocessing, additional purchase of raw materials, delays, etc.
- Prevention costs - to prevent the occurrence of failures and to evaluate, for example, certification of suppliers. This includes the costs of Six Sigma training and programs.
- Detection costs - associated with inspections and audits of products / services. For example: auditing suppliers, sorting incoming components.
Each company can calculate COPQ differently.
COPQ can provide topics for Six Sigma projects. It would be ideal to attack first of all the cost generators of non-quality (starting with the client's problems), to continue with those that affect the business and to remain acceptable, up to a level, the prevention costs.
