COURSE OVERVIEW:

The Cost of Quality (CoQ) is a powerful financial metric that translates quality performance into the language of senior management: money. This course teaches participants how to identify, measure, and report the hidden costs associated with poor quality, as well as the investments made in prevention and appraisal. By quantifying the financial impact of defects and inefficiencies, organizations can prioritize improvement projects that offer the highest return on investment and build a stronger business case for quality initiatives.

The scope of this training involves the application of the PAF (Prevention, Appraisal, Failure) model to a company’s financial data. Attendees will learn how to uncover the "hidden factory" costs, such as rework, warranty claims, and lost opportunity costs that often go unnoticed by traditional accounting systems. The curriculum focuses on the strategic balance between investing in prevention to reduce the much higher costs of internal and external failures, ultimately driving down the total cost of quality.

Coverage includes the categorization of quality costs, data collection methodologies, and the creation of Cost of Quality (CoQ) reports for executive review. Participants will explore how to set Cost of Quality (CoQ) targets, benchmark against industry standards, and use financial trends to evaluate the effectiveness of the Management System. At the end of this course, attendees will be able to demonstrate the direct link between quality improvement and organizational profitability, shifting the perception of quality from a "cost center" to a "profit generator."

COURSE OBJECTIVES:

After completion of this course, the participants will be able to:

• Define the concept of the Cost of Quality (CoQ).
• Explain the components of the PAF (Prevention, Appraisal, Failure) model.
• Identify hidden costs associated with the "Hidden Factory."
• Differentiate between Internal Failure and External Failure costs.
• Categorize activities into Prevention and Appraisal investments.
• Develop a data collection system for quality-related expenses.
• Calculate Cost of Quality (CoQ) as a percentage of sales or operating costs.
• Analyze Cost of Quality (CoQ) trends to identify systemic quality issues.
• Utilize Cost of Quality (CoQ) data to prioritize Six Sigma and Lean projects.
• Construct professional Cost of Quality (CoQ) reports for senior leadership.
• Establish Cost of Quality (CoQ) benchmarks and improvement targets.
• Demonstrate the financial ROI of specific quality improvements.

TARGET AUDIENCE:

Quality Managers, Financial Controllers, Operations Managers, Process Improvement Leads, and Senior Executives.

TRAINING COURSE METHODOLOGY:

A highly interactive combination of lectures, discussion sessions, and case studies will be employed to maximize the transfer of information, knowledge, and experience. The course will be intensive, practical, and highly interactive. The sessions will start by raising the most relevant questions and motivating everybody to find the right answers. The attendants will also be encouraged to raise more of their questions and to share in developing the right answers using their analysis and experience. There will also be some indoor experiential activities to enhance the learning experience. Course material will be provided in PowerPoint, with necessary animations, learning videos, and general discussions.

The course participants shall be evaluated before, during, and at the end of the course.

COURSE CERTIFICATE:

National Consultant Centre for Training LLC (NCC) will issue an Attendance Certificate to all participants completing a minimum of 80% of the total attendance time requirement.