Hey, glad you could make it! For the past 2 weeks we have been talking about the Cost of Quality. As we saw in last weeks example it only takes a few mistakes and the costs can be substantial.  That is why it’s important to understand the Costs of Quality and the impact it can have on the business. Today we are going to talk about the Cost of Good Quality, what are some things that can be done to re-invest back into the business to increase level of quality and reduce the Costs of Poor Quality.

So, what is the Cost of Good Quality? ASQ defines the Costs of Good Quality are costs incurred to determine the degree of conformance to quality requirements and to keep failure and appraisal costs to a minimum. LNS Research has a similar definition, these are costs companies incur to ensure they are producing quality products. The Cost of Good Quality does not reflect a 1:1 relation with the Cost of Poor Quality. Keep in mind, just because you invest $1 on Good Quality does not necessarily mean you will reduce your Costs of Poor Quality by $1!

The Appraisal Costs are costs that are attributed to the oversight of work activities associated with Quality. They include things like internal quality audits, or external vendor quality audits, verification of incoming inputs, equipment calibration and inspections, etc. These costs are used to prevent failures on the manufacturing floor, to prevent material shortages during production runs, to ensure that you are getting quality product from your vendor partners, and ultimately enabling you to consistently release quality product to your customer. It should provide confidence that you have the inputs necessary to produce a product that meets or exceeds the commitment of quality that the company has set forth.

Preventative Costs are costs that are attributed to the mitigation or prevention of Quality failures from occurring. They include things like education and training groups, on boarding costs, equipment and facility maintenance programs, health and safety protocols, and even employee culture! To produce a quality product consistently, efficiently, and at speed requires the efforts and work of all involved to achieve this goal. Having a Culture of Quality is akin to having an inspector in your processes for every employee on the line. It enables you to entrust your staff will work collectively towards the common goals and hold each other accountable to the level of quality that the team has committed to. Like the old saying goes “An ounce of prevention is worth a pound of cure”!

We hope you have enjoyed our Cost of Quality series as much as we have had putting it together! 2020 has been a wild year for everyone, including the team at Evora. We were able to accomplish a lot of things in 2020 as a team and we are all excited for what 2021 has in store for us! We are going to take a break over the holidays with the blog, but we will be back in the New Year with more exciting conversation around the production of Cannabis!

From all of us at Evora, we hope you all have a safe and happy holiday time with you and your loved ones, and we look forward to seeing you all in 2021! Cheers!