Cost of Good Quality
Good quality doesn’t come for free. Costs arise from making sure that good quality products are produced.
These can be classified into:
- Prevention costs
- costs of everything you do that is aimed at preventing poor quality in your products or services.
- e.g. planning for quality, supplier evaluation, calibration, quality training, mistake proofing, clear specifications, accurate internal documentation, quality system development and management.
- Appraisal costs
- costs of everything you do to control the process and ensure the products or services conform to the specifications
- e.g. inspection of incoming goods, in-process testing and inspection, internal audits, competency assessment.
Since the cost of a defect rises the further along the process you go, your quality dollars go further when they are spent on prevention.
Good quality management will tend to catch the defect earlier and prevent its re-occurrence, avoiding more of the costs we covered in ‘Cost of Poor Quality‘.