1 What is the cost of poor quality?

The cost of poor quality (COPQ) is the total amount of money that is wasted or lost due to defects, errors, rework, scrap, warranty claims, customer complaints, and other quality issues that arise from poor supplier performance. COPQ can be divided into two categories: internal and external. Internal COPQ refers to the costs that are incurred within your organization, such as inspection, testing, correction, and prevention activities. External COPQ refers to the costs that are incurred outside your organization, such as customer returns, refunds, penalties, lawsuits, and reputation damage.

4 How do you benchmark COPQ?

To benchmark COPQ, you need to compare your COPQ results with those of your competitors, industry standards, or best practices. This will help you understand how well you are performing in terms of supplier quality management and where you have room for improvement. You can use various sources of data and information to benchmark COPQ, such as industry reports, surveys, publications, associations, consultants, or peer networks. However, you should also consider the differences and nuances of your business context and goals when benchmarking COPQ, as not all COPQ metrics are applicable or relevant to your situation.

5 How do you reduce COPQ?

In order to reduce COPQ, a systematic and continuous supplier quality management process must be implemented. This process should involve planning, executing, monitoring, and improving supplier quality activities. To achieve this, it is necessary to define and communicate supplier quality requirements and expectations to suppliers. Furthermore, suppliers should be selected based on their quality capabilities and track records. Regular audits and assessments should be conducted to verify their compliance and performance. Additionally, clear and measurable supplier quality indicators and goals should be established and monitored regularly using data and feedback. Collaboration with suppliers is also essential in order to identify and resolve quality issues as well as implement corrective and preventive actions. Finally, recognition and reward of suppliers for their quality achievements should be encouraged in order to promote continuous improvement.

6 How do you report COPQ?

To report COPQ, you should utilize clear and concise formats and methods that effectively communicate the relevant information and insights to your stakeholders. Charts and graphs can be used to visualize trends, patterns, and comparisons over time, across suppliers, or by categories. Dashboards and scorecards can summarize the COPQ results, indicators, and goals while highlighting any gaps or opportunities for improvement. Reports and presentations can explain the COPQ analysis, findings, and recommendations as well as provide evidence and examples to back up arguments. Stories and testimonials can also illustrate the impact of reducing COPQ and display success stories or best practices.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?