Benefitting your Business by applying Cost of Quality Principles

The conventional process uses an approach to ensure quality during the end product testing.

Processes have changed, and we have embarked on a new journey with quality being inbuilt in the process of manufacturing and delivering it at every point of time of the process. Thus ‘Quality’ becomes the key factor of industries.



There is a cost associated to every action that is performed. The value or the cost of each deliverable is based on the quality of the product or the process produced or embraced. Different costs involved include Prevention costs, Failure costs and Appraisal costs.



Some information around the Cost of Quality:

  • The cost of ensuring Quality and recovering from poor Quality 25 – 30% of sales revenue
  • Between 25 and 30% of conversion costs today are quality-related, mostly because more global plants serve major markets
  • Relates to avoiding errors, remaking products, materials wasted
  • Not accepted across – still debated – different views by different experts
  • The average pharmacos holds 180 days of finished goods inventory on hand, for example, with top performers at about 100 days. The consumer goods industry hold only 60 days’ inventory on an average
  • Quality-by-design and Design-to-cost could yield $20 to $30 billion industry-wide