Cost of Quality | Project Success

The cost to fix a defect increases as it gets closer to the Customer.

🤝 During Requirements: It costs very little to check, prototype and review requirements before we program them.

🤝 During Solution and Design: It costs relatively little to review and change a design.

🤝 During Development: It costs a bit more in time and effort to redo an item if it gets this far and there’s a defect. We may need to re-look at the requirements and design too, and re-code the solution.

🤝 During Testing: If we catch a defect during Testing, we may have to redo it in Development, or even go through the process from requirements again.

❌ But once a defect gets to a customer, we have the added cost of bad customer reviews, impacts to our brand or reputation, PLUS the time taken to review the customer complaints and address them, PLUS the waste of something we created that may have to be completely redone.

➡️ What else would you add to the Cost of Quality?

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The Cost of Quality

There are three main things we’ll be looking at relating to the cost of quality.

What is the Cost of Quality? It’s the cumulative cost required to bring poor quality service or products (what we’re delivering as part of our project) up to the standards that are defined by the project.

Cost of Quality asks: “What does it cost if things go wrong or to prevent things from going wrong?”

The three things that we’re looking at for the cost of quality are:

Prevention costs
Appraisal costs, and;
Failure costs.

Let’s look at them in a little bit more detail.

Prevention costs

These are related to the prevention of poor quality, in the products, deliverables or services of the specific project, or the products that we’re delivering. We’re wanting to stop an error before it happens. Now, how much does it cost for us to stop an error before it happens? Do we need to put something in place to stop it? Do we need to change the way that we’re delivering? Do we need to add more money in some way? It’s how we preventing those things from happening.

Appraisal cost is the next one, and this is the cost related to evaluating, to measuring, auditing and testing the products, testing the deliverables and the services of the specific product that we’re delivering. So we’re checking to see if errors are being made and then correcting those before they reach the final state. That definitely involves a cost, because we’ve got people having to go out and check systems or processes or products as they go along. Quality assurance or testing is a big part of your project in many cases, and obviously there’s a cost involved in that as well.

Failure costs is the last one, and this is the cost of when an error actually happens. So we haven’t been able to prevent it – we haven’t found it by appraising or inspection, and instead things have failed. What is the actual cost of when things go wrong? These are the costs related to non-conformance of the products, deliverables or services to the needs or expectations of the stakeholders. This ends up in unhappy stakeholders because they’ve received a faulty product or an error in the product that we’re delivering.

And those are the three costs of quality that you’ll find.

– David McLachlan

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