iSixSigma

Cost of Quality (COQ)

Definition of Cost of Quality (COQ):

The cost associated with the quality of a work product.

As defined by Crosby (“Quality Is Free”), COQ has two main components: cost of conformance and cost of non-conformance.

Cost of quality is the amount of money a business loses because its product or service was not done right in the first place. From fixing a warped piece on the assembly line to having to deal with a lawsuit because of a malfunctioning machine or a badly performed service, businesses lose money every day due to poor quality. For most businesses, this can run from 15 to 30 percent of their total costs.

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