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What are your business costs due to poor quality (CoPQ) and their
effect on your bottom line? For this discussion, CoPQ is any
costs (dollar amount) you can associate with the inability to
correctly perform a task the first time. Common contributors to
CoPQ are; rework, scrap, customer returns, waste, meetings,
shipping, travel. The list is lengthy and can cover a wide range
expenses a business incurs.
Every business probably has "CoPQ" expense accounts set-up in
their accounting structure but, categorizes them as standard or
expected expenses. In other words, "Just part of doing business,
plan for it". You or your company's management may or may not be
conscious of the potential savings available. The potential
savings can be assessed by simply initiating performance measures
on a few of these key expenses. Look at the obvious ones, scrap,
rework and customer returns for the last 6 months to a year. You
may have to work through the financial group to get reports
applicable to your situation.
Take action if there is an expense that looks out of the
ordinary, assign someone to track down the root cause.
Traditional organizations have the quality professionals perform
this task. One cause could be there is a single expense account
or general fund for all scrap, which should be broken down into
detailed accounts that allow specific tracking of expenses. If
you are not comfortable undertaking this investigation, inquire
who may be the correct person by contacting your manager or
quality professional.
The basic framework to track CoPQ expenses should be in place,
take a look at your situation and see. There could be an
opportunity for you to contribute to the continued financial
success of your business.
Writer's Resource Box:
Kent Jacobson, a.k.a. "Mr. Success" is a trusted authority in the
success field and provides valuable success information for free
through his website at: http://www.Shortcut2Success.com . You can
also read Kent's Success Blog to find more success secrets at:
http://www.Shortcut2Success.com/blog
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