What is the cost of porr quality in your company?
it could be 25% of sales, are you prepared tp ignore this?
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- Douglas Lawrie1317390237
Hung, Hi
You are almost exactly right, hwoever you can approximate what lost business costs but may not be able to exaclty calculate. Lost buiness has a cost to it, lost reputation is less easy to quantify in monetary price. Lost business costs what ever part of your sales plan or sales budget does not materialize as a result of lossing a customer's account to another company. It may take a lot of effort and assocaited cost to win this business back.
Dougie
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HI Douglas, majority of company are much paying attention to this factor. Without the managemnet tool in quality will cause the losing company's profit. This is explain why all company try to build up the management system with tool to monitor. Such tools as TQM, Six Sigma...are applied. However, some company should accpept the hight percentage in cost of poor quality at fisrt stage of operation. In order to maximize the profit and reduce cost, BOM should make the detail business plan with the clear target & production norm in each area &unit. But the most important thing is keeping the supervising tool in system consistency.
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COPQ is an interested topic.
However almost your comment look like not deeply answer.
COPQ has been used in industry > 50 years. And as J.Juran said " In most companies COPQ runs at about 20%-40% of sale " in 1951, it's still not change until now, why ? Because reducing COPQ is a Strategy for Profitability of the boss, that mean his sub-ordinate have to capture COPQ as much as possible. Hence, set et COPQ 25% off the bottom line is an acceptable figure in a lot of company, also in Vietnam. As my experiences, if you obtained COPQ less than 20% even you work in world-class, sure that you are poor COPQ capture.
COPQ included Internal failure costs & External failure costs. But Appraisal costs & Prevention costs are not COPQ, there are COQ ( Cost Of Quality ).-
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I think quality in vietnam is less than US or developed countries , because vietnam is still lack of manything, but that fit for vietnamese and live enviroment . So you don't care about it and accept sometime help you reduce COPQ
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