Cost of Quality vs Cost of Poor Quality (COPQ)

cost of poor quality

What’s the Cost of Poor Quality (COPQ)?

  • It’s the cost related to providing poor quality products or services. In easy words, we can say that it’s the total financial losses incurred by the company due to doing the wrong things.
  • COPQ is the cost that would disappear if in smooth operating conditions.
  • It’s a refinement of the conception of COQ.
  • COPQ is the hidden cost because most of the associations don’t have a proper methodology of the assessment of COPQ and hence they don’t know how much money they can earn by reducing

What’s an illustration of the cost of poor quality?

  • Repair
  • Rework
  • Scrap
  • Warranty failure
  • Wastes of Manufacturing

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What’s the Cost of Quality (COQ)?

  • COQ is the cost of achieving Quality Products or Services.
  • COQ = Costs of Achieving Good Quality COPQ
  • Most of the people think that advanced quality requires advanced costs, which is due to buying better materials or machines or by hiring further labor but this isn’t true in actuality.
  • It’s a methodology that allows an association to determine that its fund are used for exercise that prevent poor quality.

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What’s an illustration of the cost of good quality?

  • Training and motivational activity
  • Vendor evaluation, vendor development
  • ProcessCapability Study of machines
  • Calibration of measuring devices and equipment
  • Incoming material inspection
  • Stageinspection
  • Final inspection, etc.

What are the major fundamentals of the cost of poor quality?

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(A) Prevention Costs

  • Prevention is incurred to prevent or avoid problems related to products or services.
  • This is associated with the design, implementation, and maintenance of the QMS.
  • They’re planned and incurred before the actual operation, and they could include


  1. Planning
    • This is related to the creation of plans for quality, reliability, operations, production, and examination
  2. Training and development of the workforce
  3. Productor service requirements
    • The establishment of specifications for incoming materials, processes, and finished goods
  4. Assurance
    • The creation, and maintenance of the system that assures the defect-free output after each operation until the end.

( B) Appraisal Costs 

  • An appraisal is associated with measuring and monitoring exercise.
  • This is associated with the supplier’s and clients’ evaluation of purchased materials, processes, goods, and services to ensure that they conform to specifications.


  1. Verification
    • It’s related to checking of incoming material, process setup, and finished good affair as per agreed specifications
  2. Audits
    • The inspection is the confirmation that the quality system is functioning rightly
  3. Supplier assessment
    • This is related to the assessment and approval of suppliers.
  4. Test and examination of purchased materials
  5. Acceptance testing
  6. Examination
  7. Testing and examination of equipment, etc.

(C) Internal failure

  • Internal failure is related to the remedy of defects discovered before the product or service is delivered to the client.
  • This occurs when the results of work fail to meet the agreed specifications and are detected before they’re dispatched to the client.


  1. Rework
    • If a product or service isn’t made or supplied right the first time, also we try to correct it rather than scrap it. The costs related to doing this activity are called This includes additional labor hours/ machine hours for correct work and (wherever rectification requires material) sometimes additional material and process, too.
  2. Rejection or Scrap
    • Consider another case where a finished good or service hasn’t been made right the first time and also it isn’t reworkable or fixable. In such a case, we’ve no other choice apart from scrap it.
    • In simple language, the scrap is an imperfect product or material that can not be repaired, used, or sold
  3. Waste
    • The waste is the performance of unessential work or holding of stock as a result of errors, poor association, or communication.
  4. Failure analysis
    • Failureactivity is required to establish the causes of an internal failure.

( D) External failure 

  • External failure is incurred to remedy defects discovered by clients.
  • This occurs when products that fail to reach design quality standards aren’t detected until after transfer to the client.


  1. Warranty repairs and replacement
    • If the product fails during the warranty period, an attempt is made to repair it and make it functional. If the product isn’t fixable also we’ve to replace it with the one. It’s a loss of the association.
  2. Complaints
    • All work and costs associated with handling and servicing clients’ complaints.
    • Returns handling and investigation of rejected or recalled products, including transport charges.

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