Notonly does one method exist for collecting and reporting an entity's quality costs, but each company has its own accounting system which collects and reports costs differently.
COQ System is the method to distinguish between prevention, assessment ofinternal and external failure cost categories and evaluate the impact that changes will haveon one category over others.
By implementing a Agape COQ system as a measurement tool the company will be able to report and highlight quality issues in order to undertake meaningful quality improvement activities. A doller value is generated by using a fully functioning Agape COQ system to demonstrate the financial impact of quality activities.
Few organizations allocatea Doller value for Non-Conformances resulting in decreased profits. A dollar value not assigned for minor repair works, eventhough time and resources shall be allocated for these tasks unless it’s captured efficiently as a variation due to a design issues.
The failure costs can be classified as follows:
Internal Failure costs(waste): costs of rework and repair, reinspecting and testing, delays
External Failure Costs: Defect Liability period repairs, warranty claims, product recalls, legal issues, which aredownstream consequences.
Appraisal costs(monitoring): costs associated with measuring, evaluating or auditing services or products to conform with quality standards and performance requirements.
Prevention costs(Process improvement investments): Costs incurred in minimizing failure and appraisal costs throughout processes. For example, design reviews, quality planning, quality training etc.
Total COQ = sum of all failures costs + Appraisal costs + Prevention costs.
Saving money with the Agape COQ Program
Agape Engineers can assist your organization/project in introducingits COQ Program for your organization to track and measure quality issues helping you to take improvement actions, measuring the effectiveness of the implemented Agape COQ, system - Activity-Based Costing (ABC) - in consultation with your Management and Project teams.
Notonly does one method exist for collecting and reporting an entity's quality costs, but each company has its own accounting system which collects and reports costs differently.
COQ System is the method to distinguish between prevention, assessment ofinternal and external failure cost categories and evaluate the impact that changes will haveon one category over others.
By implementing a Agape COQ system as a measurement tool the company will be able to report and highlight quality issues in order to undertake meaningful quality improvement activities. A doller value is generated by using a fully functioning Agape COQ system to demonstrate the financial impact of quality activities.
Few organizations allocatea Doller value for Non-Conformances resulting in decreased profits. A dollar value not assigned for minor repair works, eventhough time and resources shall be allocated for these tasks unless it’s captured efficiently as a variation due to a design issues.
The failure costs can be classified as follows:
Total COQ = sum of all failures costs + Appraisal costs + Prevention costs.
Saving money with the Agape COQ Program
Agape Engineers can assist your organization/project in introducingits COQ Program for your organization to track and measure quality issues helping you to take improvement actions, measuring the effectiveness of the implemented Agape COQ, system - Activity-Based Costing (ABC) - in consultation with your Management and Project teams.