What is COPQ?
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. As the first key measurable in any Six Sigma project, 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.
COPQ can be very expensive. Some companies report their COPQ in the range of 10%-30% of sales before improvement efforts take place. If your company has $10M in sales, this amounts to $100,000- $300,000 your organization probably can’t afford to throw away!
Learn to measure cost of poor quality. (COPQ)
In the case study for Strategically Fine Writing Instruments you'll see how to calculate COPQ and determine how the costs can be categorized. Go to the COPQ Case Study
Keep in mind that not all issues and resolutions should be the responsibility of the workers. Typically, problems are more systemic in nature. In other words, most of the issues your company faces are caused by process and system failures, rather than by operators. Management bears a responsibility to identify these systemic issues and determine methods for improvement.