The Cost of Poor Quality (COPQ) quantifies the negative outcomes due to waste, inefficiencies and defects in a process. Quality great Joseph Juran separated these costs into 3 categories:
- Prevention Costs: Including quality planning, training, preventive maintenance, housekeeping etc.
- Appraisal Costs: Including testing, inspection, audits, reviews and surveys, etc.
- Failure Costs:
- Internal Failures: Including scrap, rework, expediting, equipment downtime, injuries, etc.
- External Failures: Including product recalls, returned products, complaint handling, lost sales, etc. COPQ is often represented as a dollar amount (or as a percentage of sales) and is composed of the categories listed above. The goal of any organization is to reduce COPQ to zero.