Cost Uncovered

by Richard Corderoy

Cost associated with Quality and Failure can be rapidly and sustainably reduced
Delivering a quality product or providing a quality service, even with a high degree of customer satisfaction, is not enough. All the costs of achieving these goals and avoiding the reputational impact of getting it wrong must be carefully managed and it is these costs that are a true measure of the quality effort.

cost uncovered

Most organisations do not measure the key drivers of CoQF

  • Product based organisations only measure 40% of the costs associated with quality and failure
  • Service based organisations only measure 22%
  • Many of the CoQF elements do not typically sit within the quality department
  • The true CoQF may be much higher than reported in many organisations

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By measuring and understanding the true CoQF for your business, you can focus your improvement activity in the areas causing most pain.

It is possible to make rapid and sustainable improvements to your Quality and Failure costs

1. Measure the total quality effort and drive down costs

  • In general the more elements an organisation measures the lower its CoQF
  • The targeted improvement activity requires pan organisational support – it is unlikely that the operations or quality team can drive it alone
  • Reducing the major failure types may require additional investment in prevention

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2. Build key elements of maturity across the organisation
In the long term reducing the Quality and Failure costs is closely related to improving the overall quality maturity of the organisation

Whilst the initial focus may be on those maturity elements that directly link to customer and suppliers – attention should also be focused on more enabling elements

From introducing measurement to supporting sustainable change – Oakland is experienced at helping firms navigate this journey

These findings are based on collaborative research by Oakland Consulting, The European Centre for Business Excellence and industry partners.
Contact us on +44 (0) 113 234 1944 or contactus@oaklandconsulting.com