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MGMTREP
As a consistent means to measure one aspect of the Cost of Poor Quality (COPQ), we count how many Nonconformance Reports are written on incoming product and multiply this number by a calculated dollar figure. The belief is that, for this aspect only, COPQ rises and falls with the number of NCR's written.
Another different method now being suggested is to not just count the number of NCR's, but also count how many purchase order line items (i.e separate product numbers) were issued. The thought is that it's more meaningful to know the percentage of line items that were written up. This means that even if were writing up more lines items, if it's a lower percentage of the total number of items ordered, it's good news.
The counterpoint is that this moves the focus to the wrong factor. While it's good that the percentage is going down, the costs incurred by having to write up more items is going up and that means the COPQ for this aspect is going up. To reduce this COPQ, the focus should be on reducing the number of NCR's that have to be initiated by eliminating the root cause of the NC's. Doing this will take care of the percentage.
Thoughts?
Another different method now being suggested is to not just count the number of NCR's, but also count how many purchase order line items (i.e separate product numbers) were issued. The thought is that it's more meaningful to know the percentage of line items that were written up. This means that even if were writing up more lines items, if it's a lower percentage of the total number of items ordered, it's good news.
The counterpoint is that this moves the focus to the wrong factor. While it's good that the percentage is going down, the costs incurred by having to write up more items is going up and that means the COPQ for this aspect is going up. To reduce this COPQ, the focus should be on reducing the number of NCR's that have to be initiated by eliminating the root cause of the NC's. Doing this will take care of the percentage.
Thoughts?
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