The Cost of Poor Quality Equals the Cost of Life!

The cost of poor quality refers to the financial and non-financial consequences that arise from producing products or services that do not meet the required standards or customer expectations. These costs can be significant and affect various aspects of an organization. Here are some key areas where the cost of poor quality can be observed:

Internal Failure Costs: costs that incurred within the organization and can be a result of poor process controls, inadequate training, or faulty equipment. They include the cost of rework, scrap, and retesting, as well as the cost of investigating and resolving the issues. One can assume how internal failure impacted in healthcare service delivery as the business is with life. Then testing at small scale would be beneficial.

External Failure Costs: These costs occur when defects are identified by the customer after the product or service has been delivered. They include warranty claims, product returns, customer complaints, and potential legal liabilities. External failure costs can damage a company's reputation, lead to customer dissatisfaction, and result in the loss of trust by clients. Always consider accountability.

However, Can we truly expect quality without any cost? The unequivocal answer is a resounding no. While we may be able to attain a certain level of quality at a minimal expense, the notion of obtaining it without any cost whatsoever is simply unrealistic.

Allow me to highlight the costs associated with ensuring good quality, which are actually lower compared to the costs incurred due to poor quality.

Appraisal Costs: costs are associated with activities aimed at evaluating and inspecting products or services to ensure they meet the required quality standards. They include the cost of quality control personnel, inspection equipment, testing, and audits.

Prevention Costs: costs incurred to prevent defects from occurring in the first place. They include the cost of quality planning, training programs, process documentation, quality improvement initiatives, and implementing quality management systems. Prevention costs are proactive investments aimed at improving processes and reducing the likelihood of defects and save lives. Assume how much the cost of life is!

The cost of poor quality can be substantial and have a negative impact on a company's profitability, customer satisfaction, and trust. Organizations that consistently produce poor-quality products or services may face increased rework, product recalls, legal actions, and loss of customer trust. On the other hand, companies that prioritize and invest in quality management can reduce the cost of poor quality by preventing defects, improving customer satisfaction, and enhancing their overall competitiveness in the market.

Invest on Quality then!