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Cost of Quality

Cost of Quality. Todd Downey, Dipl., C.Tech. November 12, 2003. “Quality is free” Crosby. Why Make a Quality Product?. Quality costs less. Meet increasing demand of customers. Ensure company continues to exist (existing customers return and provide referrals).

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Cost of Quality

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  1. Cost of Quality Todd Downey, Dipl., C.Tech. November 12, 2003 “Quality is free” Crosby

  2. Why Make a Quality Product? • Quality costs less. • Meet increasing demand of customers. • Ensure company continues to exist (existing customers return and provide referrals). “Defects are not free. Someone makes them and gets paid for making them.” Deming

  3. How Will Quality Save Me Money? For companies with no formal QMS: Cost of Internal & external failures (CoPQ): • 16% of sales - A company with 10 million in sales = 1.6 million in failure costs. • 30% of manufacturing costs “In the USA, a third of what is done consists of redoing work previously ‘done’” Juran

  4. How Can I Improve? • Know where you are – Calculate your CoPQ • Move efforts from failures (finding & correcting them) to prevention & appraisal (making the product right first time) • Receive support from management and provide support to employees!!! “Quality first, profit will follow” Faigenbaum

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