AID18832 Consistent product quality is the most proven predictor of any manufacturer’s success.


Consistent product quality is the most proven predictor of any manufacturer’s success. Competitors may imitate each other’s marketing, but superior quality stands alone as the truest statement of company’s values. That is why forward-thinking manufacturers are making quality cost management part of their DNA.
Engraining the fundamentals of quality cost management across every plant and production line creates guardrails that keep quality improvement on track. Moreover, it leads to improved product quality and increased yield rates, fostering customer goodwill. That is why manufacturers who have embraced quality cost management are driving higher customer demand and loyalty-and greater profits-than competitors spending millions of dollars to market mediocre quality products.
Knowing the cost of quality (COQ) is essential to earning and keeping a reputation for excellence, nurturing customer trust, and growing over time. Since it represents all the costs associated with stabilizing and continually improving product quality, from suppliers to customers, COQ is the single best metric for tracking how well manufacturing is delivering on the commitment to exceptional quality. It’s common to
see cost of quality account for 15% to 20% of a manufacturer’s sales, and between four to six times the size of net profits a given year.
Columbus, L. (2020, August 28). Getting Started With Quality Cost Management. Retrieved August 30, 2020, from
a. Using an industry example, explain the steps to calculate and report cost of quality (COQ)? Compare the calculated COQ with the COQs of some world class companies. (5 Marks)
b. Explain how the company can reduce its COQ? (5 Marks)
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