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Four Steps of a COQ System Poster

[To download this presentation, visit:<br>https://www.oeconsulting.com.sg/training-presentations]<br><br>The Four Steps of a COQ System poster is a powerful tool for managing cost and improving quality. The Cost of Quality (COQ) methodology provides a practical approach to quantifying the financial impact of the Cost Of Non-Conformance (CONC) and the Cost Of Conformance (COC) which can be used in conjunction with other process improvement initiatives such as Lean, Six Sigma and TQM.

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Four Steps of a COQ System Poster

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  1. Four Steps of a COQ System 1. IDENTIFY COQ ITEMS 4. REDUCE COQ Cost of Quality (COQ) is the total cost of ensuring product and service quality. Total COQ is the sum total of the Cost of Non-Conformance (CONC) and the Cost of Conformance (COC). Identify quality cost items that contribute to COQ. Focus the program initially on the Cost of Non-Conformance (CONC) items. Improve quality and reduce the COQ of the prioritized items. 4.1 Assign process owners or quality improvement teams to address the prioritized COQ items 1.1 Develop a COQ checklist 1.2 Evaluate identified COQ items 4.2 Communicate COQ performance by using various methods such as COQ scorecard, meetings, newsletters, emails, etc. § Can it be calculated? § Can it be reduced or eliminated? 1.3 Source for available COQ data such as established accounts and basic accounting records 4.3 Make improvements by using systematic methods such as the PDCA cycle and the “QC” tools Reduce COQ Identify COQ Items 1.4 Match accounts with COQ 4.4 Standardize the corrective actions § For example, ‘downtime’ as a CONC item can be matched with the ‘repair and maintenance’ item in accounts 4.5 Expand the COQ program to include the Cost of Conformance (COC) items 4.6 Institute a prevention system through continuous improvement of processes, products and services FOUR STEPS OF A COQ SYSTEM § Precise matching is not expected; just be consistent in your approach Analyze COQ Data 3. ANALYZE COQ DATA 2. COLLECT & REPORT COQ DATA Collect & Report COQ Data Analyze the data carefully and thoroughly and identify opportunities for improvement. Collect COQ data and provide monthly status report to the COQ committee for information and evaluation. 3.1 Analyze the COQ data 2.1 Calculate or cost the COQ items, using methods such as Whole Account, Unit Pricing, Whole Person and/or Labor/Resource Claiming 3.2 Prioritize the COQ items for improvement § Use trend analysis when past and present data is available 2.2. Ensure that data collected is easy-to-read and ready-to-use by developing forms to allow for the input of all information for the identified COQ items § Use variance analysis when there are goals or targets set for performance PREPARING FOR A COQ PROGRAM § Form a COQ committee 3.3 Set targets for improvement § Appoint a COQ sponsor 2.3. Provide monthly status report of the collected data to the COQ committee for information and evaluation § Identify a COQ program manager § Define scope of COQ program § Provide COQ education and training § Commit necessary resources © Operational Excellence Consulting. All rights reserved.

  2. Four Steps of a COQ System 1. IDENTIFY COQ ITEMS 4. REDUCE COQ Cost of Quality (COQ) is the total cost of ensuring product and service quality. Total COQ is the sum total of the Cost of Non-Conformance (CONC) and the Cost of Conformance (COC). Identify quality cost items that contribute to COQ. Focus the program initially on the Cost of Non-Conformance (CONC) items. Improve quality and reduce the COQ of the prioritized items. 4.1 Assign process owners or quality improvement teams to address the prioritized COQ items 1.1 Develop a COQ checklist 1.2 Evaluate identified COQ items 4.2 Communicate COQ performance by using various methods such as COQ scorecard, meetings, newsletters, emails, etc. § Can it be calculated? § Can it be reduced or eliminated? 1.3 Source for available COQ data such as established accounts and basic accounting records 4.3 Make improvements by using systematic methods such as the PDCA cycle and the “QC” tools Reduce COQ Identify COQ Items 1.4 Match accounts with COQ 4.4 Standardize the corrective actions § For example, ‘downtime’ as a CONC item can be matched with the ‘repair and maintenance’ item in accounts 4.5 Expand the COQ program to include the Cost of Conformance (COC) items 4.6 Institute a prevention system through continuous improvement of processes, products and services FOUR STEPS OF A COQ SYSTEM § Precise matching is not expected; just be consistent in your approach Analyze COQ Data 3. ANALYZE COQ DATA 2. COLLECT & REPORT COQ DATA Collect & Report COQ Data Analyze the data carefully and thoroughly and identify opportunities for improvement. Collect COQ data and provide monthly status report to the COQ committee for information and evaluation. 3.1 Analyze the COQ data 2.1 Calculate or cost the COQ items, using methods such as Whole Account, Unit Pricing, Whole Person and/or Labor/Resource Claiming 3.2 Prioritize the COQ items for improvement § Use trend analysis when past and present data is available 2.2. Ensure that data collected is easy-to-read and ready-to-use by developing forms to allow for the input of all information for the identified COQ items § Use variance analysis when there are goals or targets set for performance PREPARING FOR A COQ PROGRAM § Form a COQ committee 3.3 Set targets for improvement § Appoint a COQ sponsor 2.3. Provide monthly status report of the collected data to the COQ committee for information and evaluation § Identify a COQ program manager § Define scope of COQ program § Provide COQ education and training § Commit necessary resources © Operational Excellence Consulting. All rights reserved.

  3. Cost of Quality (COQ) COST OF QUALITY (COQ) Cost of Non-Conformance (CONC) Cost of Conformance (COC) Internal Failure Cost Prevention Cost External Failure Cost Appraisal Cost © Operational Excellence Consulting. All rights reserved.

  4. Cost of Quality (COQ) COST OF QUALITY (COQ) Cost of Non-Conformance (CONC) Cost of Conformance (COC) Internal Failure Cost Prevention Cost External Failure Cost Appraisal Cost © Operational Excellence Consulting. All rights reserved.

  5. Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg 5 © Operational Excellence Consulting. All rights reserved.

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