Cost of Poor Quality - the iceberg view.

Cost of poor quality (COPQ) = scrap + rework + warranty + inspection + lost goodwill. Most of it sits hidden below the waterline. Enter your defect and volume numbers to see the real annual cost.

Most manufacturers see only scrap + rework. Hidden costs (inspection, sorting, expedite, complaints, lost sales) are typically 3-5x larger. Quality is free; what costs money is unquality.

PAF (Prevention-Appraisal-Failure) model from ASQ. Most manufacturers see only the tip of the iceberg - scrap + rework. Hidden costs (inspection, sorting, expedite, lost sales) are typically 3-5x larger.

Visible costs (monthly)

Annual revenue ($)

Scrap cost / month ($)

Rework cost / month ($)

Warranty claims / month ($)

Customer returns / month ($)

Hidden costs (monthly)

Inspection + testing hours/week x rate

Sorting/containment cost ($)

Expedite/air freight due to quality ($)

Engineering time on quality issues ($)

Complaint handling cost ($)

Lost sales estimate / quarter ($)

When quality cost is everywhere but documented nowhere

SimpleGrid posts every quality event to the source - and to the cost it caused.

Defect found at QC = cost back to the operation. Rework labor = cost back to the job. Customer return = cost back to the original ship event. Crosby: "Quality is free; what costs money is unquality."

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Cost of Poor Quality - the iceberg view.

Visible costs (monthly)

Hidden costs (monthly)

SimpleGrid posts every quality event to the source - and to the cost it caused.

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