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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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Mix of Benefits, Costs from "Green" Procurement

APQC's research indicates that nearly a quarter of organizations without green procurement policies intend to initiate them within the next two years.

Type: Benchmarks and Metrics  Topics: Supply Chain Planning, Supply Chain Management, Procurement, Sourcing  Processes: 4.0 Deliver Products and Services, 1.1.1.7 Identify ecological concerns, 1.1 Define the business concept and long-term vision, 1.1.1 Assess the external environment, 4.1 Plan for and acquire necessary resources (Supply Chain Planning), 4.1.1 Develop production and materials strategies, 4.1.9 Develop quality standards and procedures, 4.2 Procure materials and services 
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Green Procurement: Efficient Order Processing, Higher Costs for Appraising Suppliers

Recent years have seen a push for organizations to pay closer attention to the environmental impact of their practices.

Type: Benchmarks and Metrics  Topics: Supply Chain Planning, Supply Chain Management, Procurement  Processes: 4.0 Deliver Products and Services, 1.1.1.7 Identify ecological concerns, 1.1 Define the business concept and long-term vision, 1.1.1 Assess the external environment, 1.2.2.3 Develop sustainability strategy, 1.2 Develop business strategy, 1.2.2 Evaluate strategic options to achieve the objectives, 4.1 Plan for and acquire necessary resources (Supply Chain Planning), 4.1.1 Develop production and materials strategies, 4.1.9 Develop quality standards and procedures, 4.2 Procure materials and services 
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Green Procurement: Be Aware of Varying Costs

Recent years have seen a push for organizations to pay closer attention to the environmental impact of their practices.

Type: Benchmarks and Metrics  Topics: Supply Chain Planning, Supply Chain Management, Procurement  Processes: 4.0 Deliver Products and Services, 1.1.1.7 Identify ecological concerns, 1.1 Define the business concept and long-term vision, 1.1.1 Assess the external environment, 1.2.2.3 Develop sustainability strategy, 1.2 Develop business strategy, 1.2.2 Evaluate strategic options to achieve the objectives, 4.1 Plan for and acquire necessary resources (Supply Chain Planning), 4.1.1 Develop production and materials strategies, 4.1.9 Develop quality standards and procedures, 4.2 Procure materials and services 
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