LumenProcess Manager

Free tool · Six Sigma

Cost of Quality

Put what poor quality costs into one number management understands. List the costs of an operation by the PAF model of Feigenbaum (prevention, appraisal, internal failure, external failure), each as hours, a count or an amount for its own period, and see the cost of quality a month and a year, the cost of poor quality as a share of revenue and per order, the split, the largest items and what a cut in failure would save once the extra prevention is paid for.

1 · Your operation

The default hourly rate is used for every line in hours without a rate of its own. It is only a starting value: use your loaded labour cost (wage, employer's contributions, supervision) from your own figures.

2 · The costs, by PAF category

Each line is one cost: hours × hourly rate, a count × the cost of one event, or a fixed amount, for the period it comes in. Everything is brought to a month (a week is 52/12 of a month, a quarter a third, a year a twelfth) and a year.

No costs yet. Add a line under a category, bring in what this browser already holds, or .

Bring in reads the last 30 days of the Waste Log on this browser as internal failure, and the compensation given in Guest Complaints as external failure, one line each. It only reads them, and 30 days count as one month.

3 · Scenario

Net saving per year = failure cut × (internal + external failure) × 12 − extra prevention × 12.

The guide · Edition 7 · Page 69

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Process Manager

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