Categories of Six Sigma Costs of Quality

The Cost of Quality within the Six Sigma Methodology has four categories.  They include Prevention, Field Failure, Chain Costs of Supply/Factory, and Testing/Inspection.

The first category of costs when it comes to quality is called Prevention. This category includes preventive maintenance, qualifying suppliers, audits, process controls, reliability and quality design, training, and programs/planning.
The second category is Field Failure. This category deals with sales that were lost, control costs that were damaged, degrading of reputation and goodwill, costs of liability, penalties, costs of patch, recall and retrofit, costs of warranty, goods that were returned, costs of allowance, compensation and refund, and customer complaints engagement.

Third on the list of categories of Costs of Quality is Chain Costs of Supply/Factory which includes quality costs that are indicative of change, design orders to correction change, sub-optimal merchandise discounting, costs that carry inventory by problems caused by inventory, sub-optimal merchandise screening and sorting out, scrap changing or rework setup, costs that are indicative of change and corrective actions of supplier, corrective actions and planning, problems analysis, replacements parts and materials, procurement by purchasing actions, parts and materials replacement value, scrap value, rework re-inspection, diagnostics, and rework.

The fourth category is about Testing/Inspection which includes calibration and testing of equipment, corrective actions, audits for field quality, audits of the internal quality, final testing, test development, and testers costs that are included with tests diagnostics, testing in-process, and inspections that are incoming.

As you can see, the four categories will play an essential role and big part on the actual Cost of Quality within a business, wherein through these factors, the company can gauge the financial status of a company and how well they can manage their daily operations.  This is because they can predict if there will be possible deficit or not. By using the Six Sigma Methodology in order to maintain the value of products and services the company offers, the Cost of Quality generation can be secured and retained for the good of the company, employers, and employee.  Once a company knows their own quality expense and where those leaks in the system are coming from, they can go about working to decrease that number.

The Cost of Quality will have a big role for the development and progress of each company operation on a day to day basis. The employer and his or her employees can secure the productivity of their company and the growth of its industry will be way beyond comparison with other industries.  To offer better products and services, it is necessary that the company reduce the cost, but not the actual quality itself.  Instead, the goal is to create the absolute best product with the least amount of resources.  This is how the Six Sigma Methodology works.  If a company can manage to maintain the quality of its products and services, they will always be successful.