Resource Library/Quality Leadership, Metrics and Management Review/Cost of Poor Quality Worksheet
Cost of Poor Quality Worksheet
Put a dollar figure on quality: prevention, appraisal, internal failure and external failure, month by month and as a share of sales, with the largest elements named and a one-page improvement case with its payback.
- Excel
- fillable PDF
- Worked example
- Your logo on it
- Aegis Insights
Page 1 of the PDF. Every resource includes a fully worked example.
The problem it solves
Management hears about quality in counts: NCRs, escapes, overdue actions. It decides in dollars. Most small shops report one dollar figure, scrap and rework, which leaves out inspection, NCR handling, corrective action time, sorting at the customer, premium freight and credits, and so understates the cost of poor quality by half or more. This worksheet collects quality costs month by month in the four standard categories, from the books where they exist and as marked estimates where they don't, shows the total and the failure share against sales over three and twelve months, names the largest elements, and turns one problem into an improvement case with a payback.
Who uses it
Quality directors and managers, with finance, and the general manager who approves spending on quality.
When
Enter the month's costs when finance closes the month; read the Summary each quarter; write an improvement case whenever a problem needs money to fix.
Free to use, change and copy, in your own organization or with your clients; add your own logo, keep the Aegis credit. Part of: Quality Performance Kit. Clause references: 9.1.3 (with 6.1, 7.1, 9.3.2, 10.3) (numbers only; use your own licensed copy of the standard).
A management aid, not certification or a registrar audit. Using it does not by itself show conformity to AS9100D or any other standard.
How to put it to work
Chapters of our free guides that use this tool.
- The kit and how its tools connectThe Quality Performance Kit Handbook, chapter 2
- The monthly quality performance cycleThe Quality Performance Kit Handbook, chapter 3
- Choosing what to measureThe Quality Performance Kit Handbook, chapter 5
- Reading performance: change or noiseThe Quality Performance Kit Handbook, chapter 8
- What poor quality costsThe Quality Performance Kit Handbook, chapter 10
- Reporting upThe Quality Performance Kit Handbook, chapter 13
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These tools help you run the work by hand. When you want the whole picture of your quality system from the records you already keep, that's what the AeroAssure Audit Defense Pack and the IA9100 Transition Gap Analysis do.