The total cost of quality is the combined sum of the costs in these areas:
Scrap
Rework
Use of excess materials (i.e. Off-cuts)
Equipment breakdowns
Preventive maintenance
Yield below quote
Productivity below quote
Customer rejections
Returned goods and return freight
Warranty
Quality department (wages, equipment, & overheads)
Lab department (wages, equipment & overheads)
All mistake-proofing devices
All measurement devices and gages
Dock audits
Third party audits
Data collection systems
An effective layered process audit program will improve the overall quality of your organization, while reducing your company’s Total Cost of Quality.
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