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Sample Cost of Quality Calculations

Calculating the cost of quality is a tricky task. This article offers example calculations and perspectives from other organizations attempting to quantify the value of quality within their businesses.

Type: Benchmarks and Metrics  Topics: Quality Control, Business Excellence, Quality, Measurement, Measurement, Quality Assessment, Quality Measurement  Processes: 1.1.3.2 Create baselines for current processes, 1.1 Define the business concept and long-term vision, 1.1.3 Perform internal analysis, 1.1.3.3 Analyze systems and technology, 1.3.4 Establish high-level measures, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 12.1.1.1 Establish performance measures, 12.1 Create and manage organizational performance strategy, 12.1.1 Create enterprise measurement systems model, 12.1.1.2 Establish performance monitoring frequency, 12.1.1.3 Set performance targets, 12.2.1 Conduct performance assessments, 12.0 Manage Knowledge, Improvement, and Change, 12.2 Benchmark performance, 4.1.9 Develop quality standards and procedures, 4.0 Deliver Products and Services, 4.1 Plan for and acquire necessary resources (Supply Chain Planning), 4.2.4.4 Monitor quality of product delivered, 4.2 Procure materials and services, 4.2.4 Appraise and develop suppliers, 4.4.4 Ensure quality of service, 4.4 Deliver service to customer  Industry: Aerospace, Computers, Construction, Electronics, Machinery, Machinery Equipment, Mining, Non-Profit, Research Organization, Semiconductors, Service (General) 
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Focus Quality Measures on Value-Added Activities and Core Strategic Objectives

Organizations can measure everything under the sun, but if those measures aren't focused on value-added activities and strategic objectives, the organization may not get the return on investment it desires.

Type: Best Practices and Business Drivers  Topics: Quality Control, Business Excellence, Quality, Strategic Planning, Organization and Management, Measurement, Measurement, Quality Assessment, Quality Measurement  Processes: 1.1.3.2 Create baselines for current processes, 1.1 Define the business concept and long-term vision, 1.1.3 Perform internal analysis, 1.1.3.3 Analyze systems and technology, 1.1.4.1 Align stakeholders around strategic vision, 1.1.4 Establish strategic vision, 1.2.4 Coordinate and align functional and process strategies, 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.3.4 Establish high-level measures, 1.3 Manage strategic initiatives, 12.1.1.1 Establish performance measures, 12.1 Create and manage organizational performance strategy, 12.1.1 Create enterprise measurement systems model, 12.1.1.2 Establish performance monitoring frequency, 12.1.1.3 Set performance targets, 12.2.1 Conduct performance assessments, 12.0 Manage Knowledge, Improvement, and Change, 12.2 Benchmark performance, 12.4.2.6 Establish metrics, 12.4 Manage change, 12.4.2 Design the change, 12.4.3.4 Monitor change, 12.4.3 Implement change, 12.4.4.1 Monitor improved process performance, 12.4.4 Sustain improvement  Industry: Computers, Construction, Electronics, Machinery, Machinery Equipment, Mining, Non-Profit, Research Organization, Semiconductors 
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APQC's Measurement Alignment Worksheet

For measurement to impact an organization's performance, measures must align with organizational strategy and be connected with actual work.

Type: Tools and Templates  Topics: Business Process Management (BPM), Business Excellence, Process, Measurement Frameworks, Measurement, Process Measures, Measurement  Processes: 1.3.4 Establish high-level measures, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 12.1.1 Create enterprise measurement systems model, 12.0 Manage Knowledge, Improvement, and Change, 12.1 Create and manage organizational performance strategy, 12.1.1.1 Establish performance measures, 12.1.1.3 Set performance targets 
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How to Measure Innovation

Measuring innovation can be a challenge, but leading organizations find a way to do it and to integrate findings back into the organization.

Type: Articles and White Papers  Topics: Product and Service Innovation, Innovation, Operational and Process Innovation  Processes: 1.3.4 Establish high-level measures, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change, 2.2.1 Design, build, and evaluate products and services, 2.0 Develop and Manage Products and Services, 2.2 Develop products and services  Industry: Computers, Consulting/Consultants, Durable Goods, Healthcare, Metals, Professional Services/Business Services 
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