Attached is a rough COQ based on our annual sales. Have I captured the right metrics and is <5% a good goal?

I think on the whole this chart basically shows what you want it to. I would, however, ask if any of your cost is associated with any suppliers or sub contractors etc that you re-claim cost from and if so I would definatley show that information. I think your target being set at <5% is reasonable, however is depends on what constraints you or your customers which to impose upon you!

Thanks, I agree I do need to include the requirements that are imposed upon us by customers. As an example we have a contract now that requires us to hire a CWI for weld inspections for which we have spent over $18,000 to date.

Thanks again

I have changed the graph so it shows the CoQ as percentage of the total sales and tabulates the nominal values. This provides you much more management information.

I have changed the graph so it shows the CoQ as percentage of the total sales and tabulates the nominal values. This provides you much more management information.


Jan,

Great tool! :agree1:

Could these costs be divided into:

Price of Nonconformance (PONC)
Price of Conformance? (POC)

(Terms used by Phil Crosby).

Stijloor.

Yes, you could. However, some substantial elements of price of conformance, like costs for quality control activities (inspections and testing) and control of monitoring and measuring devices (calibration and maintenance) I think are lacking in the data.

You could also make a distinction between costs that are dependent on the sales (e.g. NCR's, testing, inspections) and costs that are (more) independent of the sales (e.g. Quality Audits, calibration, maintenance). For the first a presentation in percentages is the most valuable, for the latter a nominal presentation. E.g. you have to calibrate an instument commonly within a specified time period irrespective of the use frequency. Unless you can put it out of use, because you have more than one instrument or you can demonstrate that you can safetly reduce the calibration frequency these costs are more or less fixed. Such discussions management may have and the graph is helpfull in that.

This is a great tool!!!

The calibration issues mentioned should be included, IMO. We have saved a lot of money by adjusting outside calibration intervals, while monitoring measurement processes internally.

One thing that would be nice is to have the numeric values centered above their respective points on the graph.

This is a powerful format. One might be tempted to scale the charts by percent of sales, but including sales on the graph does that already. Show me the money!!!!

I have some questions based on the data presented, but that would be a different thread.

Well done!

Everyone thanks for the help and feedback. I have included Calibration and testing. I added dummy numbers in the the calibration as a place holder until I pull the data for it. I also added a main title header to break it out into:

Appraisal Costs
Internal Failure
External Failure
Prevention Costs

I tried my best to line up the chart labels with each column label. I am also building this page out with YTD (monthly) data with dashboard pie charts and gauges so that the organization can get as realtime exposure to the information as possible.

Any other thoughts or comments are welcome.

Thanks again,

Maybe the best COQ graph I have seen. Quality professionals always are asking how to get management attention for quality. It helps your company stay focused on where the problems are but more importantly is great financial information for management. They like pictures better than words on what needs to be done and what has been done in quality.

Bill Pflanz