What is cost of Quality - When should COQ be applied? - CiteHR
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COQ (Cost of quality)
Is a financial measure of the quality performance of an organisation.
It is essentially a measure of lack of quality & can also be termed as cost of bad quality.
Why is COQ required?
Understanding cost of quality helps organisations to develop quality conformance as a useful strategic business tool that improves their products, services & brand image.
This is vital in achieving the objectives of a successful organisation.
When should COQ be applied?
COQ is primarily used to understand, analyse & improve the quality performance.
It can be used by shop floor personnel as well as a management measure.
It can also be used as a standard measure to study an organisation’s performance vis-à-vis another similar organisation and can be used as a benchmarking indices.
How to check COQ?
read more What is Cost of Quality * TQM + Lean
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Dear Ashima,
Thanks for sharing important information on Cost of Quality (COQ). Along with COQ goes measurement of Cost of Poor Quality (COPQ). Measurement of both the costs should go hand in hand.
All HR interventions, be it employee training or any other, should be focused towards reduction of COPQ. Many times, HR professionals launch some HR intervention but are unable to give definitive reply on whether COPQ was reduced or not.
You have asked a question in your post "Why is COQ required?" This question needs to be rephrased as "Why Measurement of COQ is Required?"
Reply to this question is given as "Understanding cost of quality helps organisations to develop quality conformance as a useful strategic business tool that improves their products, services & brand image." Your reply also merits revision as measurement of COQ is purely a operational tool. Far from being a strategic tool, it cannot be even considered as tactical tool.
Your second question is "When Should COQ be Applied?". This question also merits revision as it is not application of COQ but measurement of COQ. Secondly, measurement COQ is part of and parcel of operational activity therefore, question of "when to measure" does not arise. Measurement must start after few months of the commencement of the operational activity. The reply to this question does not cover service organisation. It may be noted that measurement of COQ and COPQ applies to both, be it manufacturing or service organisations.
Anyway, for suggestions apart, thanks for bringing out this important subject for the discussion.
Dinesh Divekar
Prime Sponsor - Talentedge.com "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA. View Courses
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