Quality is everything these days, as consumers aren’t looking for short-lived or poor solutions – they want something that meets their needs both in the near-term and the long-term. It’s why it’s important to consider the total cost of quality, or COQ, which is derived from appraisal costs, internal failure costs, external failure costs and prevention costs. Ideally, you want to provide solutions that are high quality, but that reduce the overall cost of quality – and this is accomplished by focusing on prevention efforts, training and investing in the right technology to support your efforts and reach your goals. Here’s a closer look and some tips to reduce cost of quality:
COQ: What You Need to Know
According to the American Society for Quality (ASQ), COQ should allow any type of organization to determine how its resources are used to prevent poor quality, and appraise quality of the organization’s products or services, including those that are caused by internal and external failures. Essentially, the goal of any company should be to use its resources as effectively as possible to produce a high-quality product with a low COQ. But oftentimes, this isn’t the case. In fact, the ASQ states that some organizations have a COQ of up to 40 percent of its sales revenue. Poor quality in a company tends to be in the 10 to 15 percent range of sales revenue. Ideally, an organization should be able to provide a high-quality product or service at a low COQ.
Why is it important to measure the COQ? Simple: Because you want to be able to measure how your investments in quality impact your overall business performance. In other words, it can help ensure that your resources are being expended in the most efficient way possible while providing the best possible solution.
The COQ Model: Measure the Quality Effort
As we noted earlier, the total cost of quality consists of various factors, such as internal and external failure costs, appraisal costs and prevention costs. The former two factors – internal and external failure costs – are costs of poor quality. Internal failure costs measure defects before the solution is distributed to the customer, while external failure costs measure quality defects after it is distributed to the customer. The latter two factors – appraisal costs and prevention costs – are associated with good quality. Appraisal costs measure and monitor all activities related to quality, while prevention costs measure things like the cost of design, implementation and maintenance of the quality management system.
How to Reduce Cost of Quality
So how can you deliver on that high-quality solution while reducing your total overall COQ and thereby improving your bottom line? Here’s a look at some strategies:
Focus on Prevention
Like we noted in the COQ model, prevention costs are associated with good quality, so investing money in this part of your quality management process can be a big boost. This is accomplished by identifying preventative indicators that demonstrate where your company is likely to fail both internally and externally, and then taking this information and learning from it moving forward.
Train Workers on Quality Standards
What are your company’s goals and objectives as it pertains to quality? Define them and give your workers something to strive toward. Empower your workers with the information on what to do and how to act in certain situations and if quality isn’t up to expectations. By investing in training, your workforce can share in your organization’s goals of improving quality while reducing COQ so it operates better overall.
Invest in Software that Focuses on Quality
Finally, the right software solution can go a long way toward decreasing the COQ. The ideal software solution can monitor conditions on the floor in real-time to better ensure that procedures are followed, workers are supported, and products and solutions offered are up to quality standards. Software can also support operational efficiency, increase productivity and ensure process compliance. Capturing this data and assessing the issues that are commonly faced can go a long way toward helping improve productivity as well as overall quality, and reduce the number of defects or issues that a product may face to increase overall customer satisfaction, and reduce internal and external failure costs.
Contact Anvl Today
For more information on how the right software solution can help reduce your overall COQ, contact Anvl today. We have experts ready to evaluate your organization’s current methods of process compliance for quality to help transform your operations in a way that it can be utilized to ensure every product exceeds the standards that you’ve established. Our solutions can also incorporate prevention and training to collect real-time data that can be used as a teaching tool.
