How to measure the cost of quality in line with ISO 9001 principles

In ISO 9001 Certification in Philippines If your company has an operational QMS (Quality Management System), whether they are authorized against the ISO 9001:2015 standard or not, you likely have several KPIs (key performance indicators) that follow how you are functioning concerning quality. While these may be specific to your sector or the organization you operate in, do your KPIs truly that will throw back the financial cost to the organization – when poor quality may fetch your company money – even beyond the dimensions of the KPIs already measured?

Cost of quality – Why?

The cost of quality can be said to be the statement of expenses and time arise by a business external of pre-defined process actions, which need to be under control to recover, improve or preserve the quality of a service or product. If you consider your organization, many objectives within your QMS will be very simple to define: a manufacturing company might measure “first pass yield” as a critical measure, while a call center might measure response customer satisfaction or time as one of its main measures. While these may be well-founded for your business, they also might not tell the complete story.

Product A might go in vain twice in 100, giving a first pass yield of 98%, and the rework is essential to the failing part might take 30 seconds to rework and attending for the retest. Product B might go in vain once in 100, giving a first pass yield of 99%, but the developed programming of an awaiting component might take six minutes before furnishing for a retest. Product C might pass manufacturing tests giving a first pass yield of 100%, but root cause and field failure analysis might cost lots of engineering and quality time to fix, and a bill of $10k. According to our main quality measures, Product B is functioning best, product A second best, and Product C worst – but we can see with the further investigation that the times and costs we have seen suggest that things might not be so simple.

What to capture for your measurement, and how?

According to ISO 9001 Services in Nigeria to calculate the true fetch of quality within your business, you need to truly understand your product’s lifecycle, from development and design to end-of-life disposal. You will then have to take the time to understand what is the budget to manufacture a product is, and what costs and times are allocated by your business to hold up these process steps.

When you understand this, you can start to search for the costs related with your product that are outside this defined scope. Some examples might be:

A product that fails in the field and needs costly engineering or reworks time, including costs. This cost may fall outside the existing quality measures, such as first-pass yield or any other in-house product inspections or audits performed.

Products that are more complicated or time-consuming to repair or rework than your original budget forecast. This could mean more expensive engineering time, or time spent by your quality team to try and improve product yield.

Products that may to go in vain more during various stages of the guarantee period. Again, your internal KPIs may not tell the story of the cost of replacing, repairing, or shipping replacement products at later stages of the lifecycle.

In ISO 9001 Consultant in Chennai Recycling costs, which can be done according to the ISO 14001 standard for environmental management. The article How ISO 14001 can improve recycling performance looked at recycling, but with ever-increasing legislative requirements ensuring manufacturers have to arrange for the return and ethical recycling of the product, it is clear that there is a financial cost attached to this.

What does the “cost of quality” tell your organization?

Measuring the “cost of quality” for any business is essential some very specific knowledge concerning the products, people, and processes associated with your business. The ISO 10014 quality management standard can guide you here, concerning both controlling associated costs and improving business.

Establish “cost of quality” as a calculated KPI, find the base cause, and drive improvement accordingly, and you will be well on your way to beginning a competitive advantage in your sector. This is also straight linked to how your business takes and views action concerning risk, as we saw in the previous article How to address opportunities and risks in ISO 9001. At last, understanding how to use root cause analysis to support corrective action in your QMS can be the method by which you to make sure that frequency is prevented in the future.

How to Apply for ISO 9001 Certification in Philippines?

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