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What Is The Cost Of Quality Brought About By Training?

Posted on 28st February, 2012 by Mark Pilkington

When talking about training and the need for training, we must ask: “What is the cost of quality?” As defined by A.V. Feigenbaum (1), there are three segments to address for controlling the cost of quality:

Failures, Appraisal Cost and Prevention Cost. As can be surmised, Failures are the results of defective products, Appraisal Costs are the cost of inspection, audits, tests, and Prevention Costs are the efforts to prevent the problems from occurring in the initial manufacturing process.

Although there are more quality elements which can and should be discussed, the length of this blog limits our total discussion on this topic, but I do want to highlight prevention cost, as this cost is related to the investment in training. By increasing the training programs that employees attend and certifications they receive, this in turn, helps to prevent the initial failures, reducing field failures and thereby reducing the cost of quality. The ability or costs of finding a defect during assembly vs. finding a defect in the field can be a factor as high as one thousand to one.

Find defect at:

  • Assembly Factor = 1
  • Inspection Factor = 10
  • Test Factor = 100
  • Field Service Factor = 1000

Assigning cost numbers, as an example, to the improvement of yields provides the following scenario:

  • Given 95% yields implies 5% of units are defective
  • If quantity of products is 5000 units, @ 95% yields = 250 bad units equates to 50,000 ppm and if 50% are found in the field, this equates to 125 defects at $125,000 and if found at test, 125 defects at $12,500.

The typical knowledge and skill base training programs cost less than $2500, including materials, which is an investment in the people and the company’s profits, as previously mentioned, with improvements in quality and yields, reduction in inventory and increase turns in inventory.

This emphasizes the point of keeping defect and defective products from being shipped into the field to customer for “what would cost pennies to find and fix in house will cost thousands of dollars to fix in the field and this does not even include customer perception, which is a priceless item”.

1. A.V. Feigenbaum in Total Quality Control, Engineering and Management, Chapter 5 Quality Cost

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