Quality management costs
How much does quality management actually cost and what do you stand to gain from it?
The costs and ultimate benefits of quality management depend on many factors. That’s exactly why arguing about whether quality management actually makes sense is unfortunately still very popular nowadays.
We can tell you from long-term practical experience that with well thought-out planning and targeted implementation, quality management is always worth the costs, which can be amortized quickly through the benefits you stand to gain from it.
Benefits of quality management
The specific benefits of introduced quality management for a company usually can’t just be quantified by this or that amount of money that has been saved but in practice, it does strongly depend on individual factors having to do with the company, the industry and the competitive situation.
Aside from pure cost savings, quality assurance might also aim specifically at the extension of shares in the market, the improvement of the company’s products or higher average customer satisfaction. Such objectives have no immediate savings potential but they serve to lower costs in the medium up to the long run, to increase sales figures and to strengthen the brand of the company.
Costs of quality management
Apart from the costs having to do with its introduction and with obtaining certificates, which vary greatly depending on the specific industry, the company size or external networking with suppliers and clients, quality management also causes ongoing costs which can be divided up into the following groups:
- Error prevention costs. This includes all types of costs that serve error prevention, like, e.g., quality training, supplier assessments and quality planning in general.
- Inspection costs. Inspection costs encompass cost ranges for staff and material within the framework of quality inspection, meaning, for example, test equipment (laboratory tests, ….), manufacturing inspections, etc.
- Internal error costs. The costs that stem from fixing detected faults are referred to as internal error costs. They include, for example, reworking defective products, disposal of substandard goods or required changes to the manufacturing process.
- External error costs. External error costs are made up by costs for errors that have been detected outside of the company, like, for example customers’ warranty claims, and recall actions and complaint management in general.
Reduction of quality management costs
In order to achieve specific benefits and cost savings ASAP, quality management costs (quality costs) ought to be optimized and regularly checked as well, of course. This can be done very efficiently through comprehensive analysis and planning before the actual introduction and implementation of the quality management system. Economic optimization might clearly require more efforts when it comes down to already existing quality management systems as processes which are already in place frequently need to be adapted or replaced. Specific reduction of quality costs is a very individual matter in practice but it is practically always aimed at lowering testing efforts and improving material and product qualities.
About PeRoBa®:
PeRoBa® Unternehmensberatung GmbH has specialised in management systems since 1991. The company has been headquartered in Baldham since 2011 and also maintains an office on Prinzregentenstraße in Munich. PeRoBa® advises, audits and assesses to support clients in introducing and implementing their management systems, and also offers audits, QM training, seminars and workshops. Since January 2016, the in-house, patented software iVision® – Smart Remote Audit Solution has been on the market.
Dr. Roland Scherb is the founder and Managing Director of PeRoBa® Unternehmensberatung GmbH, certified to DIN EN ISO 9001, ISO 14001 and ISO 27001 and based in Baldham. He is President of the Bundesverband der Auditoren e. V. (German Federal Association of Auditors), head of the ISO Certification Competence Forum at BVMW e. V. (German Association for Small and Medium-sized Businesses) and a member of the DIN working committee NQSZ NA 147-00-07 GA on the revision of DIN EN ISO 19011. He is also a book author as well as a trainer and lecturer at renowned educational institutions on management systems and the associated core methods.
How may we help you?
Arrange a free, no-obligation initial consultation via online appointment, or send us a message using our contact form. You are also welcome to call us.
In the free initial consultation, we first clarify your needs.