Cost of Quality (Cost of Conformance and Non-Conformance)

Quality comes at a cost. There’s no denying that fact. But what exactly is the cost of quality?

Cost of Quality

Cost of Quality includes all the costs incurred over the life of the product (not just the project). Mathematically,

Cost of Quality = Cost of conformance + Cost of non-conformance

Cost of conformance

Cost of conformance is the cost of preventing failure. This is the money spent during the course of the project. There are two types of conformance costs,

Prevention costs

1. Training
2. Documentation
3. Equipment
4. Time to do it right

Appraisal costs

1. Testing
2. Destructive testing loss
3. Inspections

Cost of non-conformance

Cost of non-conformance is the cost incurred because of failures. This is the money spent during and after the project. There are two types of non-conformance costs,

Internal failure costs

1. Rework
2. Scrap

External failure costs

1. Liabilities
2. Warranty work
3. Lost business

Remember, to manage quality successfully, the cost of conformance should be less than cost of non-conformance.

Check more articles on Quality Management