iSixSigma

Cost of Quality

Six Sigma – iSixSigma Forums Old Forums General Cost of Quality

Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • #45872

    Majeski
    Participant

    Has anyone ever tried to link the cost of quality to customer cl.aims.
    I am trying to find out how I could estimate the cost of a customer claim?  Any suggestions would be very helpful.
     

    0
    #150753

    Haugen
    Participant

    Deborah – A little detail on what you mean by a customer claim would help, but basically, you need to figure out what a customer claim in your business triggers, and the cost of those events.  Usually a claim can take many forms, so sampling your customer claims over the past year, and detailing what costs were experienced by your business as a result will give you a picture of the hard costs.  VOC data – especially if you can contact the same customers who made the claims, will help you get estimates of the soft costs i.e. lost sales, etc.

    0
    #150755

    Majeski
    Participant

    Thank you for your reply.  I work for a mfg company that deals with the semiconductor business.  We have never tracked what costs are associated with receiving a customer complaint from our customers.  I would like to track the costs associated with receiving the claim and tracking the cost until it has been closed.  (people, material, etc.).  I am not sure if I have provided the right information.
     
     
     

    0
    #150758

    Haugen
    Participant

    Since that is a process that goes across functions, it is probably not documented, so you first want tod document (map) the flow of what happens from the receipt of the claim to closure.  then determine where you need measurements to document cost 9how much time is spent processing incoming claims, trouble-shooting returns, corresponding with cust, etc).  Or, you can do it at a higher level, and just look at all the areas that are touched by the claim, estimate the time & cost at each touch point based on a sample of claims, and use that.  Better estimate = more effort.

    0
    #151041

    dmess
    Participant

    Deborah,
    we capture in our systems the following cost of claims:credit/debit, freight, lost sales, offgrade, other hard costs, soft costs
    You have to be aware, however, that the accuracy of these costs depend on the people who record them, so they have to be educated how the costs are split into the categories.
    A process map (as Jim suggests) would be helpful to decide which categories apply to your process

    0
    #151044

    Owl
    Participant

    Deborah,
     For our organization once a customer claim is brought to our attention (whether internal or external customer) we have specific documents (DWO’s- Discrepant Work Orders) which are utilized to track that product of which the claim was made against, this allows us to determine how much $ are spent in the process of satisfying that customers claim ( if it was a discrepancy); we operate a MRO ( Manufacture, Repair, Overhaul facility).

    0
    #151045

    Deanb
    Participant

    In this age of computerized accounting systems I would start with your CFO and have them do a sort on all chargebacks/returns/claims the system has posted. This can be a start point for your hard cost tally. You might be suprised what categories your accounting system may already be documenting. COQ should always begin with your CFO and the existing accounting system. Keeping your CFO involved is the key to credibly estimating the soft costs as well.

    0
    #151056

    fevila
    Participant

    You also have to consider that any claim that is not solved promptly and satisfactorily for the customer might have impact on future business with the customer, and possibly negative or positive (if dealt with adequately) word of mouth. This impact is very difficult to measure, and goes on top of the cost of dealing and solving the complain.

    0
    #151057

    Deanb
    Participant

    A maxim from the marketing professions proclaims that it takes anywhere from 3 to 10 times the resources to win new customers than it takes to retain existing customers. Hence, I also suggest you involve your Chief Sales/Marketing Officer as they will have a good sense for what the nonconformances are costing their efforts to attract and retain customers. Both the CFO and the Marketing Mgt tend to be natural allies in the support of COQ efforts, so I would engage them fully in this effort.

    0
Viewing 9 posts - 1 through 9 (of 9 total)

The forum ‘General’ is closed to new topics and replies.