Development Rejection Costs in COPQ (Cost of Poor Quality) Calculations

rnsvasan

Involved In Discussions
#1
We are not including development rejection in internal ppm trend but adding it in cost of poor quality. Is this practice right?
 
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Bev D

Heretical Statistician
Staff member
Super Moderator
#2
Re: Development rejection cost in COPQ

I assume you are referring to defects that are found in product testing during the development process (Prior to launching the product for sale). The rationale beign that the product is improved prior to launch and the internal ppm rate is tracked to understand the quality of the released/approved product...

if so there is no reason why your approach can't be used. Although *I* would mix COPQ for launched product with COPQ for product in development - they are different beasts...
 
N

NANDAKUMAR_A

#3
Yes. You are right In my opinion we may not include in the regular production part ppm / COPQ. But please remember cost is cost , when ever the rejection it should be addresed in terms of Quality cost and plan to bring down. Simply , need to target "Do it right First time Every time".

Thanks!!
 
S

sathishthantri

#4
Yes. You are right In my opinion we may not include in the regular production part ppm / COPQ. But please remember cost is cost , when ever the rejection it should be addresed in terms of Quality cost and plan to bring down. Simply , need to target "Do it right First time Every time".

Thanks!!
I agree with your views on "Do it right First time Every time".
But Reseach / Development are processes, by nature, experimental.
Hence a clear separation by categorisation or non-inclusion in COPQ would be right as trend of COPQ over the months / years will be disfigured by inclusion.
Sathish
 

somashekar

Staff member
Admin
#5
We are not including development rejection in internal ppm trend but adding it in cost of poor quality. Is this practice right?
Is this practice right?
Well, since you have been doing it this way, and your management is taking this information into some meaningful decision it is right for the organization.
Now is the management asking for this ?
Do you have an objective on the COPQ, and you want to analyse the cost components that contribute, do a pareto and initiate actions ?
 

rnsvasan

Involved In Discussions
#6
Yes, whenever, new development is taking place, in that particular month our actual trend against the target is varying like anything. By seeing the graph our customers (many times our top management also) are getting confused on this huge up and downs in COPQ. Though there is a reason, our work towards target seems to be meaningless / irrelevant. Here comes a question whether it is right to add development cost in regular COPQ or to track it separately as we are doing for PPM.
 

harry

Trusted Information Resource
#7
One is a fix cost (one time cost) and the other is a variable (it's there when you run production and the % depends on your control, volume and many other factors) - even though they share the same spelling (COST), they are still apples and oranges. Why mix them?
 
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