Acronym COPQ (Cost of Poor Quality) and COQ (Cost of Quality) - Differences

P

peach

Can any one tell me the difference between cost of quality and cost of poor quality? Our company has a metric called cost of quality (COQ) where we calculate the entire scrap rate, internal sorting cost, all that stuff. We also have separate PPM metric.
What I think is all these metrics should go under COPQ. All these scrap, sorting cost, PPM etc, are separate metrics under Cost of poor quality.
Can anyone comment on this please.
thanks in advance
 

Al Rosen

Leader
Super Moderator
peach said:
Can any one tell me the difference between cost of quality and cost of poor quality? Our company has a metric called cost of quality (COQ) where we calculate the entire scrap rate, internal sorting cost, all that stuff. We also have separate PPM metric.
What I think is all these metrics should go under COPQ. All these scrap, sorting cost, PPM etc, are separate metrics under Cost of poor quality.
Can anyone comment on this please.
thanks in advance
Cost of Quality is a misnomer.
 
P

peach

Al Rosen said:
Cost of Quality is a misnomer.

Thanks for the reply. So you are saying it is actually COPQ, right?
So can i go ahead and suggest the people over here to change the name and add all the metrics i mentioned above under COPQ?
I think PPM also go under COPQ, am i right? Now we keep PPM as a differnt metric and dont want to keep it under COQ. Is it the correct way? After i change the name as COPQ. should i exclude PPM from this and keep as a seperate metric?
Thanks
peach
 

Bev D

Heretical Statistician
Leader
Super Moderator
COQ = cost of quality INCLUDES the cost of prevention (including the cost to implement fixes that should have been in place in the first place!). This is the cost of bad quality and what it takes to achieve good quality and leads to the "point of diminishing returns" where the cost to improve the quality is greater than the cost savings of the good quality

COPQ = cost of poor quality and doesn't - or shouldn't - include the cost of achieving good quality. Inspections that are in palce to detect existing defects are included but mistake proofing and self inspection ('source inspection' in Lean terminaology) and SPC monitors, etc. are not incldued. Only the costs incurred with having bad quality are documented and tracked...

this is proabably why Cost of Quality is considered a "misnomer" by some...probably including me.
 
Q

qualitygoddess - 2010

You say Potato, I say Potatoe

Philip Crosby is often given the credit for developing the phrase, Costs of Quality, or COQ. The Six Sigma folks are often credited with adding the Poor to the phrase.

It is certainly easier to call it COQ, and include prevention/improvement as well as COPQ (external failure, internal failure, appraisal, opportunity costs) in the $ amount. Ultimately, they are all costs associated with quality.
 

Jim Wynne

Leader
Admin
qualitygoddess said:
Philip Crosby is often given the credit for developing the phrase, Costs of Quality, or COQ. The Six Sigma folks are often credited with adding the Poor to the phrase.

Crosby's mantra is "Cost of Nonconformance." Since he's the author of Quality is Free it wouldn't make much sense to talk about the cost of quality. "Cost of poor quality" is generally associated with Feigenbaum and Juran (in my old 4th Edition of the Juran's Handbook Frank Gryna says, "In this handbook, the term 'quality costs' means the 'costs of poor quality.'")

And as far as I know, SS has added nothing to the general body of knowledge with regard to quality cost issues.
 

Paul Simpson

Trusted Information Resource
Three aspects

Bev D said:
COQ = cost of quality INCLUDES the cost of prevention (including the cost to implement fixes that should have been in place in the first place!).
Agreed. Generally broken down into three elements.
  • Cost of failure (sometimes further broken down into external / internal failure costs
  • Cost of detection (All of the inspection activity)
  • Cost of prevention (Quality assurance activity / supplier development/ training etc.)

Bev D said:
This is the cost of bad quality and what it takes to achieve good quality and leads to the "point of diminishing returns" where the cost to improve the quality is greater than the cost savings of the good quality

COPQ = cost of poor quality and doesn't - or shouldn't - include the cost of achieving good quality. Inspections that are in palce to detect existing defects are included but mistake proofing and self inspection ('source inspection' in Lean terminaology) and SPC monitors, etc. are not incldued. Only the costs incurred with having bad quality are documented and tracked...

this is proabably why Cost of Quality is considered a "misnomer" by some...probably including me.
Again agreed. The Cost of Quality I think originally started off as "Quality Costs" which didn't sound quite as bad. The idea is that when you start all of the cost are failure costs (generally external), as you implement detection systems the cost moves from external to internal failure as you find more problems in house.

As the systems develop there is more quality assurance activity to try and prevent failure occuring in the first place. The weight of the costs are then on the prevention side and (hopefully) all of the failure costs disappear.

Then I woke up!
 
W

wslabey

I guess I will add my two cents on this one. What's been said above all makes sense.

The notion of wanting to know what it costs for quality is a darn good idea to track as part of a balanced scorecard. I have seen companies in the late 1980's that had legions of quality analysts doing what I call "counting bodies" like they used to do in the Viet Nam war. Going back and reviewing Crosby's fundamental book, Quality is Free cements the idea of tracking what it costs to:

--Prevent quality problems (e.g., QFD, APQP, FMEA, FTA, FMA, Warranty Analysis, training, etc.)

--Appraise parts or processes (e.g, inspector time, testing, equipment calibration, measurement equipment, etc.)

--Produce internal failures (rework and scrap, etc.)

--Produce and shipe "external" failures shipped to customers (warranty, repair costs for good will, recalls, etc.)

All four need to be tracked so the overal costs drop. As was said before, the first stage of quality is quality through sorting and inspection and moves toward quality through prevention and process control driven by the voice of the customer.
 
G

gdlemail

Crosby and CoQ

>> Crosby's mantra is "Cost of Nonconformance." Since he's the author of Quality is Free it wouldn't make much sense to talk about the cost of quality. >>

Actually, Crosby did invent the term "Costs of Quality" (so far as I know). His Book, Quality is Free, was a marketing ploy to get into the minds of Sr. Management who all too often were (at the time) in bed with the concept of "acceptible quality levels" or AQLs.

In his later years, Crosby pretty much abandoned the 1st 2 CoQs (prevention and detection/appraisal), focusing on PONC (Price of Non-Conformance, not the Cost of Non-Conformance as quoted here by others). It was his attempt to avoid muddying the water with people not wanting to spend money on non-delivery related activities (their perception anyhow), and instead hit the nail on the head with what the lack of prevention and detection/appraisal was REALLY costing the organization.

BTW, I got this from Philip himself about 9 months before he passed away, when I had the chance to corner him at a conference in Chicago.
 
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