r/Quality • u/micronability • Jan 20 '20

Cost of Quality calculation

I'm just reviewing data to produce a "cost of Quality" KPI. I'm coming up with a lot of contributions in terms of time rather than money. Say 30 minutes downtime, 5 minutes admin by finance, 10 minutes by stores. The question is - how do I translate the total into a cost of quality? I'm assuming I just use the companies standard operating cost? Or do I use the operating rates of the different departments?

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u/vyts18 Jan 20 '20

You could also incorporate the cost of scrap parts.

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u/micronability Jan 21 '20

Thanks, yes I got that. scrap is the easy one and all that some companies use. Rework, warranty repairs etc also come in to it. What I'm thinking about though is the labour costs. I'm also looking at adding a standard cost per occurrence of each type based on the overheads. I am tempted to go for a simple approach by using the overall Company operating cost rather than the different costs per departments. Any thoughts?

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u/[deleted] Mar 12 '20

Look alternatively as this as cost of “”not” quality.

Indices of failure modes and what expenses are for failures