This is one of the organizations wide measures that frequently gets the attention of senior management.
If there is not a measurement system to track the Cost of Poor Quality within the Business we strongly recommend that it be instituted immediately.
Our experience is that most of these costs are understated
and frequently entire departments, whose only reason for existence is to address one of the components of the Cost of Poor Quality, are omitted.
A simple example is “returns” and “return shipping”. If everything were done correctly, there would be no returns and no return shipping. That entire organization support structure, office and warehouse space , etc., are all part of the Cost of Poor Quality.
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Revised: June 18, 2002.