Cost of Non Compliance of Quality

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Photo by Greg Rosenke on Unsplash

 

How much money are you willing to spend for your product to be of good quality? The quality criteria increase according to the size of the risk in the use of the product. If there is a situation that may adversely affect the health of the user while using the product, the quality is planned and tested in more detail. This leads to an increase in the money spent on quality.

In contrast, sometimes quality compromises are made on projects to speed things up. Then we face the cost of non compliance of quality. We may experience a loss of prestige towards the customer, as well as spending additional effort, assigning additional human resources or additional material costs by reworking the works due to mistakes.

Scope and quality should not be confused. Increasing the scope of a product means adding more features to the product, but if that product is of poor quality, you will encounter big problems. Instead, a less functional but smooth-running product is more important in gaining stakeholder trust.

If the scope increases and the quality decreases, there is a problem. All the costs that will be spent to guarantee the product quality are defined as the cost of quality. On the other hand, if you do not accept the necessary cost to comply with quality, you will face the cost of non compliance.

The money spent on quality will be less than the cost of non compliance. The costs of quality include the costs of expenditures (such as training) and evaluation costs (such as testing, inspection) necessary to assure quality. The costs of non compliance can be given as examples such as having to redo the work or paying compensation to the customer.

We say, “The cost of quality will be lower than the cost of non compliance”. So, how do we determine the limit of quality? If we cannot draw a clear boundary, the cost of quality goes to infinity. The rule is this: In order to draw the limit of quality in a product, the benefit-cost ratio should be considered. As the quality criteria increase, the costs will increase. On the other hand, if the benefit to be obtained is less than the cost, the limit of quality is determined.

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