Reducing the Cost of Poor Quality

by Michael Cieslinski
Panasonic Factory Solutions Company of America

ABSTRACT
A simple definition of the cost of poor quality (COPQ) is all the costs that would disappear if your manufacturing process was perfect. This includes all appraisal, prevention, and failure costs. Anyone running a company knows these costs exist, but what they may not realize is how much of their expenses are tied directly to COPQ. The industry average is around 20%
of sales with a range of 1% of sales in a six sigma organization up to 40% of sales at a three sigma organization [1], meaning for the average company there is large potential for improvement. By using the basic six sigma tools of Statistical Process Control (SPC) and Capability Processes, the average factory can reduce the cost of poor quality and increase their bottom line profits.

Read it in: www.panasonicfa.com/reducing_cost.pdf