INTRODUCTION
Simply, just what it sounds like it is. Cost of Poor Quality is how much money a nonconforming condition costs your organization… The “How Much Does it Hurt” metric. And quite the valuable metric it is. It shows you, your team, and management the pain caused by the nonconforming condition or defect. Importantly, it shows how much pain.
COPQ is measured to obtain a baseline measure of where you are today in terms of costs. However, you can also use this measurement to sell improvement projects to management. COPQ shows your management why it is critical that you begin your project now.
Cost of Poor Quality allows you to get an estimate of these wastes, and speak the language of management. Often times, these wastes get reported in terms of inventory turns, defect rates, test yields, number of failures, etc. None of these metrics help management prioritize the true financial impact of these wastes. By converting them into dollars, these wastes provide everyone with a better understanding of how big these problems are.