Difference between COQ (Cost of Quality) vs COPQ (Cost of Poor Quality)?

#1
What is the difference between the COQ (Cost of Quality) vs COPQ (Cost of Poor Quality)? I have received mixed opinions as to whther they are different or the same.
 
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Ninja

Looking for Reality
Trusted Information Resource
#2
We're in the realm of opinion here...my two cents:

Cost of Quality is how much it costs to have "quality" (however defined)

Cost of poor quality is how much you miss out on if you don't have "quality" (however defined)

ROI on quality = COPQ - COQ

If ROI is negative, why bother improving?

And if you can figure out how to measure any of these values accurately and objectively, please go on the lecture circuit and stop by my facility first:tg:
 

Ajit Basrur

Staff member
Admin
#3
What is the difference between the COQ (Cost of Quality) vs COPQ (Cost of Poor Quality)? I have received mixed opinions as to whther they are different or the same.
The Cost of Quality is made up four cumulative area of costs:

1) Appraisal

2) Detection

3) Internal Failure

4) External Failure

The Cost of Poor Quality is the sum of just 3 & 4:

COPQ = Internal Failure Costs + External Failure Costs

http://www.six-sigma-material.com/Cost-of-Poor-Quality.html

EDIT : Also refer an existing thread - COPQ (Cost of Poor Quality) and COQ (Cost of Quality) - Differences

.
 
P

PaulJSmith

#4
The reality is, in my opinion, that there really is no cost associated with "quality." It's already built into the cost of doing what you do (product or service) right the first time.

With poor quality, however, you start to incur additional costs associated with having to improve/repair/rework/scrap, and making changes to avoid repeating the errors.

Oversimplified? Probably, but that's how my brain works.
:2cents:
 

kgott

Quite Involved in Discussions
#5
What is the difference between the COQ (Cost of Quality) vs COPQ (Cost of Poor Quality)? I have received mixed opinions as to whther they are different or the same.
I'm interested to know why there is such emphasis on the cost of quality on this forum. Whats the reason for it??

Deming said, but common sense says it anyway, that we should focus on building good quality in, not inspecting poor quality out. For sure, there are costs associated with building good quality in, so what, there are costs associated with running a business too.

Is there some inference here that perhaps it cheaper to inspect poor quality out instead of building good quality in??
 

Ninja

Looking for Reality
Trusted Information Resource
#6
I'm interested to know why there is such emphasis on the cost of quality on this forum. Whats the reason for it??

Deming said, but common sense says it anyway, that we should focus on building good quality in, not inspecting poor quality out. For sure, there are costs associated with building good quality in, so what, there are costs associated with running a business too.

Is there some inference here that perhaps it cheaper to inspect poor quality out instead of building good quality in??
Speaking only for myself...not the forum...it is not about quality, it is about profit.
These things can be extremely closely related, but they are not the same thing.

Having the best quality in the world may end up losing business for you, since the cost of the best quality in the world may increase your price beyond your competitors who simply have "good enough" quality.
Most times, "good enough" is good enough. "Better" may or may not be better.

Quality is one of the foundational elements to surviving in business...but treating it as the goal instead of as a tool to reach the goal is damaging to business.
{Ignoring the tool of quality and not caring about quality is even more damaging}

Paying attention to the ROI of quality improvements requires attention to be paid to the cost of quality...if it costs too much, it may not be the best choice.

Thus many folks pay a lot of attention to the cost of quality.
Being hard to measure accurately and/or precisely, and having to show numbers to those responsible for deciding how money is spent, leads to much discussion on "How do I calculate this?"

:2cents:
 
T

tono80

#7
Speaking only for myself...not the forum...it is not about quality, it is about profit.
These things can be extremely closely related, but they are not the same thing.

Having the best quality in the world may end up losing business for you, since the cost of the best quality in the world may increase your price beyond your competitors who simply have "good enough" quality.
Most times, "good enough" is good enough. "Better" may or may not be better.

Quality is one of the foundational elements to surviving in business...but treating it as the goal instead of as a tool to reach the goal is damaging to business.
{Ignoring the tool of quality and not caring about quality is even more damaging}

Paying attention to the ROI of quality improvements requires attention to be paid to the cost of quality...if it costs too much, it may not be the best choice.

Thus many folks pay a lot of attention to the cost of quality.
Being hard to measure accurately and/or precisely, and having to show numbers to those responsible for deciding how money is spent, leads to much discussion on "How do I calculate this?"

:2cents:
Measuring Cost of Quality is precisely HOW you calculate the ROI of prevention (reviews, FMEAs, Poke-Yoke, Training, Automation, etc.).

The overall goal is that the organization shift the cost of failures and subsequently appraisal (inspection), to prevention, thus saving in the Overall Cost of Quality.

The whole conception of "best quality in the world...lose business" is also a misunderstanding of quality.

Quality is not beauty or perfection or shininess. A Ferrari can have poorer quality than a Number 2 pencil. Quality is meeting the customer/business requirement without waste. Hondas have much better quality than Audis.

Yes, this meets Deming's principle: whatever the number coming out of CoQ should NOT be used to measure anybody's performance. Instead, it should be used to guide you into what action to take next. Deming never said don't collect metrics or data. He simply said, do not use them as performance appraisal, but instead as data to recognize the next decision.
 
T

tono80

#8
The reality is, in my opinion, that there really is no cost associated with "quality." It's already built into the cost of doing what you do (product or service) right the first time.

With poor quality, however, you start to incur additional costs associated with having to improve/repair/rework/scrap, and making changes to avoid repeating the errors.

Oversimplified? Probably, but that's how my brain works.
:2cents:
You are 100% right. It's simple.

What's not so simple is the HOW to collect that data.

However, there is some cost of 'doing it right the first time'. For example, to prevent failures, you may want to Poke Yoke a process. You may want to design a tool so that a washer goes into a bolt the same way every single time. Or you may want to do a PFMEA. All these activities cost money, and you just have to do a quick check that you're not speding $10,000 dollars to prevent your $1000 in scrap.

HAVING SAID THAT, it has been proven that most of the time prevention is cheaper than failures by a 1:8 ratio. Most people fail to see that, because it is very easy to get impatience in the planning and activities of prevention, especially senior management, and sometimes, you just have to make your case by numbers.
 

John Broomfield

Staff member
Super Moderator
#9
CoQ includes the CoPQ.

People say cost of poor quality as if they are helpless to avoid it.

But we now know enough to invest in process-based management systems that enable us remorselessly to reduce the price we choose to pay for nonconformity.

However, providing top management with the cost benefits of keeping a promise is not a good idea. It may encourage unethical behavior.

Ideally, we want to use PONC thinking to invest in our systems so we can make better promises than our competitors in terms of creating more successful customers and other stakeholders.

...or we could simply think in terms of the rate at which our systems add value ($ per millisecond).

John
 
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