Cost of Quality (COQ) is a method used to determine the costs associated with producing and maintaining quality products. COQ is the sum of the Cost of Good Quality (COGQ) and Cost of Poor Quality (COPQ). COGQ includes costs of prevention and appraisal activities like training, inspection and calibration. COPQ includes costs of internal failures like rework and external failures such as warranty claims and customer returns. Tracking COQ helps organizations understand the financial impact of quality-related activities and failures.

1. https://www.linkedin.com/in/balamuruganm21/ balamuruganm21@gmail.com
-5S Balamurugan
Cost Of Quality (COQ)

2. https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com
COQ - Cost Of Quality
 jukhd nghUl;fis cw;gj;jp nra;a> juj;ij cWjp nra;a> guhkhpf;f
kw;Wk; juk; Fiwe;j nghUl;fshy; epWtdj;jpw;F cz;lhFk; ,og;G
cs;spl;litfSf;F MFk; nkhj;j nrytpidNa Cost Of Quality vd;fpNwhk;.
 Cost of Quality is a method that allows organizations to determine the costs
associated with producing and maintaining quality products.
Cost of Quality
Cost of Good
Quality
Cost of Poor
Quality
COQ = Cost of Good Quality (COGQ) + Cost of Poor Quality(COPQ)

3. COGQ - Cost Of Good Quality
 juf;FiwghLfis jtph;f;f> ju epiyia Ma;T nra;a kw;Wk;
guhkhpg;gpw;F MFk; nryTfis Cost Of Good Quality vd;fpNwhk;.
 The cost associated with quality conformance, including any associated costs
with both appraisal and prevention.
 Example : Training, Instruments calibration, Planning, Maintenance, Audit,
Inspection, Supplier evaluation
Cost of Good
Quality
Prevention
Cost
Appraisal
Cost
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com

4. 1.Prevention Cost in COGQ
Prevention Costs - Activities to eliminate defects from ever occurring
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com
 ju FiwghLfs; cz;lhtij jtph;g;gjw;F> Njitahd eltbf;iffis
Nkw;nfhs;s MFk; nryTfisPrevention Cost vd;fpNwhk;.
 Prevention costs signify the costs incurred with the efforts taken to prevent the
occurrence of defects.
 Example : Trainings, Quality planning, Quality audits, Contract review,
Supplier evaluation, Market research, Process capability studies.

5. 2.Appraisal Cost in COGQ
 ju FiwghLfis fz;lwpa kw;Wk; ju epiyia kjpg;gpl Nkw;nfhs;sg;gLk;
eltbf;iffSf;F MFk; nryTfis Appraisal Cost vd;fpNwhk;.
 Appraisal costs represent the costs incurred with inspected tests and performed
checks to determine whether the particular requirements are met.
 Example : Instruments calibration, Laboratory testing, Incoming goods
inspection, In-process inspection, Supplier inspection, Final goods inspection.
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com
Appraisal Costs - Controls implemented by the organization

6. COPQ - Cost Of Poor Quality
 juf;FiwghLs;s nghUl;fis jahhpg;gjhy;> me;epWtdj;jpw;F cz;lhFk;
nrytpid Cost Of Poor Quality vd;fpNwhk;.
 The cost associated with providing poor quality products or services to the
customer. In other words, it is the total financial losses incurred by the
company due to performing incorrect things.
 Example : Scrap, Rework, Repair, Delay, Customer return, Warranty claims
Cost of Poor
Quality
Internal Failure
Cost
External
Failure Cost
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com

7. 1.Internal Failure Cost in COPQ
 jahhpf;fg;gl;l nghUl;fs; thbf;ifahsiu nrd;wiltjw;F Kd;ghf
fz;lwpag;gLk; FiwghLfs; kw;Wk; mjid rhpnra;a MFk; nryTfs;.
 The internal failure costs describe the costs incurred to rectify all the
nonconformities found before the product supply to the recipient.
 Example : Rework, Repair, Internal scrap, Re-testing, Costs of reprocessing,
Efforts spent on failure analysis, Raw material rejection, In-process rejection
Internal FailureCosts - Defects occurringand managing within the company
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com

8. 2.External Failure Cost in COPQ
 jahhpf;fg;gl;l nghUl;fs; thbf;ifahsiu nrd;wile;j gpwF ftdj;jpw;F
tUk; FiwghLfs; kw;Wk; mjid rhpnra;a MFk; nryTfs;.
 The external failure costs depict the costs incurred to correct all the
nonconformities found after the product supply to the recipient.
 Example : Warranty claims, Customer visits, Penalties, Replacements,
Investigations, Loss of goodwill, Damages due to poor packaging, penalties for
delays in deliveries
External Failure Costs - Defects that reach the customer
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com

9. COGQ Vs COPQ
Cost of Good Quality Cost of Poor Quality
Prevention Costs Appraisal Costs
Internal Failure
Costs
External Failure
Costs
• Planning
• Process Control
• Quality Audits
• Maintenance
• Supplier
Evaluation
• Training
• Design Review
• Risk Assessment
• FMEA
• Inspection
• Calibration
• Document
Review
• FAT
• Test Materials
• Test Products
• Scrap
• Rework
• Missing documents
• Retest
• Redesign
• Downtime
• Downgrading
• Variation
• Problem Solving
• Warranty Charges
• Complaints
• Returned
Materials
• Late delivery
penalties
• Rework after
installation
• Lost opportunities
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com

10. - 5S Balamurugan
BSc(CS).,MBA.,MA(PM&IR).,MSc(Psy).,PHRM.,
Lean Management Professional
https://www.linkedin.com/in/tqmbala/ balamuruganm21@gmail.com
For More Lean Related Materials…