Costings For QA - 25% of sales revenue down the drain due to poor quality

[Martin Bailey]

I'm currently on an IQA course and have the following question for the forum.
"On average British manufacturing companies pour 25% of sales revenue down the drain due to poor quality." As head of quality you should look at the business and report back as to where these costs arise, how they could be identified and what actions should be taken to control them. What obstacles do you think I will encounter when compile this report.
Thanks for your help.

Martin

 

[David Mullins]

Martin,
Frequently companies measure what they can currently measure, what is easy to measure, not what they should measure.

On-time, to cost and specification. Three basics that often require a system for data collection and analysis that doesn't exist.

This is why knowledge management systems have been taking off of recent times, because they enable you to capture the data. They are frequently expensive and time-consuming to implement, and require scope changes during the course of implementation to do the things you ultimately want it to, because you learn more about the limitations and data massaging required as you go along (the complexities of it become more apparent).

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[Steven Truchon]

Accurate Data for one. I have discovered that costing figures tend to vary depending on what will be revealed. I despise the fact that this condition exists but I have yet to work anywhere that I easily and readily get accurate data. After a lot of pushing and twisting of arms, I can sometimes get better data, but....

Steve

 

[Kevin Mader]

Accuracy of data. People will hide the facts if they think they might be held accountable to a negative report or inflate them if they are trying to make a point.

 

[chris chatfield]

Hallo Martin,
A good book for this is "Principals of Quality Costs" by Jack Campanella, ASQ Press,
ISBN 0-87389-443-X. Has a table giving a large number of possible sources of poor quality.

Good luck,
Chris.