What is the Cost of Poor Quality?

In order to effectively communicate the cost of poor quality (COPQ) to all relevant parties, especially those involved in IT, you must be able to access the appropriate data when constructing your business case.

Upper-level decision makers may receive a sobering reminder of the costs associated with ignoring quality from an enterprise perspective when they consider the costs of poor quality (such as scrap, rework, returns, external failures, and so forth).

These measurements are therefore essential to presenting your business case, but they shouldn’t take precedence over other factors in the total cost of quality calculation.

This article will explain the cost of poor quality and explain how to make your data more accurate in relation to this cost.

Table of Contents
Defining the Cost of Poor Quality (COPQ)
The Cost of Poor Quality (COPQ) refers to the costs that are generated as a result of producing defective material. The direct costs are easy to identify, such as labor, rework, disposal, material and recall costs. However, the indirect costs can also significantly impact your company’s profitability. These costs include: