What Is The True Cost Of Quality?

As we at PERFEQTA prepare to attend the ASQ World Conference on Quality & Improvement in Fort Worth, Texas next week, to exhibit and support one of our respected clients, the City of Tyler, Texas, quality and its true cost has been a hot topic of discussion around the office. The City of Tyler underwent a major effort to implement auditable quality standards; a methodology detailed in the book: Quality Standards for Highly Effective Government by Richard Mallory. We are delighted that they used PERFEQTA to translate theory into action and wanted to shed some light regarding the total cost of pursuing quality and how that effort is measured at different types of organizations.

Sixty-three years ago, Dr. Armand V. Feigenbaum outlined quality cost areas in a Harvard Business Review article1. In the article, Dr. Feigenbaum broke down these areas into two categories:

1. The cost of control (conformance)

• Prevention
• Appraisal

1. The cost of failure of control (nonconformance)

• Internal failure
• External failure

While all industries have quality initiatives that include tracking of these costs, we wanted to examine the areas of quality cost in the life-science industry, including laboratories and manufacturing facilities. These organizations have the added benefit (burden to some) regulation that mandates certain quality-related activities. But while you are going through every necessary step to ensure a safe, quality product, some don’t track the cost required to achieve these results. We ought to ask ourselves if we know the actual price of each of these factors that impact our cost of quality. Have you been doing that already?

Costs of Control

• Time to create, edit and validate Standard Operating Procedures (SOP)
• Technology systems to manage SOPs such as QMS software
• Costs to obtain and maintain various industry-specific certifications (CLIA, AABB)
• Costs to implement and review QC activities for products, supplies, and equipment, including labor and systems
• Costs to implement and manage statistical process controls
• Costs of various audits and any follow-up work based on corresponding findings
• Costs of consultants to evaluate your quality activities.

Costs of Failure of Control

• Rework
• Waste of products and supplies
• The potential loss of future orders
• Retraining of employees on the SOPs and work processes
• Time and materials to report non-conformance to regulatory and standard agencies
• Time and effort spent on reacting to the reported issues and on corrective action preventive action (CAPA).

For catastrophic failures, as in those that cause harm to a patient, blood recipient, donor, or the end user, including when the end user could be another device that makes up part of the system, the cost of failures can include:

• Fines
• Litigation
• Loss of certification = loss of legal operation of the business
• Loss of capital.

While quality has a real cost, it is essential that we don’t look at the quality control department as a cost center. Enhancing quality each step of the way from accepting raw material to manufacturing and distribution can be profitable when we balance the customer expectations, market positioning, and the price charged for the final product or service.

We have seen many of our clients use PERFEQTA to digitize their quality control processes and checkpoints covering an expanding area of their operations from equipment, products, reagents, and EHS to name a few. Those that go the extra step and have used the platform to connect the activities required to share the final product or service, usually have more consistent results and able to correct deviations quicker and before they become much costlier.

Comment below or contact me directly and let me hear your thoughts. quality and exploring ways to increase visibility into business processes and product quality are some of my most favorite topics to discuss. It is fulfilling to see how our clients have transformed their business when we engage them on projects to help them measure quality and deliver consistent quality product or service.