In this article I have
explained the cost of poor quality. Tangible and
Intangible are two types of cost of poor quality (COPQ). The cost
of rework, inspection, scrap, warranty and rejection refers to the tangible
cost. Decrease in sales, late delivery, annoyed customer, excess inventory
handling cost, engineering changes cost refers to the intangible cost.
We can reduce or eliminate the cost of poor quality (COPQ) by making changes in man,
machine, method, management, or the environment. We
need to improve in one or many of these categories to eliminate or reduce the cost of
poor quality (COPQ). This cost of fixing
or replacement is called the Cost of Poor Quality (COPQ). Tangible
costs are easy to measure and Intangible costs are difficult
to measure. Cost of Poor Quality (COPQ) decreases with the six
sigma level. It is inversely proportional to the six sigma level. The cost
of rework or replacement or waste goes down with the increase in six
sigma level. The number of defects at various levels is measured by
various six sigma levels. When errors are more it leads to more waste
or rework resulting in more cost of poor quality (COPQ). Level 3 or 4
companies spend 25% to 40% of their revenues on
fixing defects or replacing defective goods.
DMAIC model is used for reducing the cost of poor
quality by eliminating or reducing variation in the existing processes.
DMAIC refers to:
Define=>Measure=>Analyze=>Improve=>Control
DMADV model is used for reducing the cost of poor
quality by eliminating or reducing the variation in new processes. DMADV refers
to:
Define=>Measure=>Analyze=>Design=>Verify
By using these models
of Six Sigma Methodology we can eliminate or reduce the cost of
poor quality and, save millions of dollars. It is just like winning a Jackpot.
I will like to end this aticle by saying that
by eliminating or reducing the cost of poor quality on one hand our business
organization saves money and, on the other hand we can make our environment
better by reducing various kinds of pollution. This will help us to make our
environment green and might save us from the global warming.
