Cost of Quality

This time I thought of discussing about a concept about Cost of Quality in a product.

What is cost of Quality? The simple answer is to the cost involved in maintain or add quality to a product/service that you are providing to a customer. So how it’s important to an organization? Cost is directly involved with the profit. When cost goes down, profit will go up where revenue is constant.

Now let’s talk this topic in detail.

When discussing the Cost of Quality, there are 3 costing types involved.

1. Prevention cost
2. Appraisal cost
3. Failure cost

Prevention Costs

Cost involved in preventing failures is prevention cost. There are many tasks which are performed in order to capture failures soon in the life cycle. It can be any product development methods.

Let’s have list of tasks which will cost in prevention of occurring failures,

• Establishing a process
• Planning for quality
• Acquiring new tools and use them
• Trainings to improve competency
• Adopt best practices and leanings from past experience

Appraisal Costs

Cost involved in capturing bugs/issues in requirements, Code and the developed product before it goes to the production (end user).

Let’s have list of tasks which will cost in capturing of bugs/issues,

• Perform requirement reviews, code reviews, inspections
• Performing different validation types such as Unit, Integration, System testing, etc
• Fix identified bugs/issues

Failure Costs

Cost involved in all associated tasks after a defective product released to the production (end user).

Let’s have list of tasks which will cost in failure,

• Cost in correcting the product requirements if those didn’t meet first time
• Cost of maintain the product
• Having a help desk
• Paying penalties for defective products
• Law penalties due to Safety issues

Reference: CBOK 6.2