Measuring the Cost of Quality
Cost of Quality (COQ) is possibly the most important metric because it captures two perspectives: the cost of poor quality and the cost to invest in good quality.
Here’s how: First, COQ accounts for internal failures—such as scrap and rework—and for defects that reach the customer and have to be resolved through warranties, corrections, and adverse event reporting. COQ also tracks proactive audit costs, like product inspections and quality tests, and preventive measures to protect quality—such as SPC, quality planning, and training.
Companies that embrace quality as a discipline spend less on quality—across the entire organization. In fact, quality becomes a key driver for cost avoidance and other strategies that improve profitability.
Asking the Right Questions
If the answers to quality improvement are in the data, then you need to know the right questions to ask. If you’re not sure where to start, try asking your business and operations leaders these four questions:
1. How do you identify your biggest opportunities for process and product quality improvement?
A quality platform centralizes quality data from across your company—making it easier to analyze. Built-in analytics do most of the data aggregation, slicing, and dicing automatically, exposing—in bold colors and charts—where to take action.
2. Once you identify opportunities, how do you prioritize resources to address them?
Based on goals that you establish, a quality platform grades process performance across products, processes, and sites. With report card-like grading systems, quality opportunities are easier to see—and prioritize.
3. How do you know people are collecting the data they are supposed to collect?
How confident are you that data collections are happening on time, every time? On the right form? In the same format? And are you notified when data collections are missed?
Modern quality solutions eliminate these worries—and improve the accuracy of your quality data. Technology standardizes collection methods across the company and calculates results in a standardized manner. An intelligent quality management solution alerts operators when collections are due and notifies mangers when collections are missed. When operators are empowered to stop wasting time babysitting data collection, they can spend more time understanding and applying that data to process improvement.
4. How do you know what your biggest challenges are?
When you have so much data collected, opportunities hide in the blind spots—especially if managers and operators have to dig through control charts or reformat spreadsheets to make them useful. It’s no wonder that quality data is often only evaluated monthly or quarterly; it takes that long just to compile and format it.
A purpose-built manufacturing quality platform automates important calculations and unites them in a dashboard view—in real time. Meaningful information rises to the surface, and leaders can click into supporting details to uncover root cause—or opportunities—so they can start developing resolutions immediately.