Using Cost of Quality to Improve Business Results

Case Study

- April 2006

Abstract: ´╗┐CRC Industries uses cost of quality as a key measure for improving business results. Since centering improvement efforts on cost of quality, the company has reduced failure dollars as a percentage of sales and saved hundreds of thousands of dollars. Cost of quality can also be linked to other improvements at CRC Industries, including shipping error reductions, customer service order entry error reductions, productivity increases, hazardous waste reduction, and profitability.

Keywords: Case study - Cost of quality - Failure dollars - Business results - Measurement - Quality tools - Root cause analysis

Access this article
You will need Adobe Reader to view this PDF document. Download the free Reader from Adobe
Please register to access this article

Featured advertisers

Interesting, but the cost of quality typically represents training costs, QA salaries and equipment etc. The reduction in "failure costs" (scrap, rework, DMR's, etc.) which if reduced should/will improve the bottom line are typically considered Non Quality Costs.
--Geoff F., 08-10-2015

Hello Prof. ML. Sidmou. Thank you for your comment. You can always find more case study articles on the ASQ site by using the Knowledge Center advanced search at You can use the "Case Study" check box in the lower right corner to limit results to case study articles.

--Noel Wilson, Knowledge Center editor, 12-18-2012

Very interesting. I am looking for similar cases about quality and project management.
QUALIMAT Laboratory
Cadi Ayyad university
Marrakech Morocco
--ML.SIDMOU, 12-18-2012

An interesting article! As a quality engineer who is the responsible person for quality in the plant, I have similar problems. Now I started with categorization of problems and causes by establishing a comprehensive database.
Thanks again for the article!
Best regards.
--Kristofer, 12-13-2012

Interesting article with complete flow helpful in spreading the message or setting context!
--Cyril, 12-13-2012

Very nice article. This is well documented & really helpful to improve our COPQ graphs.
--pramod kumar, 03-31-2012

This is an excellent article. Any department without such measurement should adapt it. Especially for those departments spend lot money to show good job, but not related to VOC and COQ.
--James, 02-21-2011

This article provides a comprehensive idea for using a cost of quality
--Mohamed Kumati, 02-16-2011

That is a great article that shows the improvement on cost of quality. But when we use this, will it get balanced for the future?
--Ganesh, 10-29-2010

This is a good example in easy to understand terms how a COQ program can improve business results over time. Note that CRC has a working quality system actively backed by executive management. This is key to success.
--Mark Swibes, 05-12-2010

Well done. Most interesting to me was the confirmation that the journey had to start with the Finance Dept. and the standardization of terms. I agree and was my same approach; BUT, extremely difficult to accomplish unless you have strong mgmt support, especially with finance group who I found very reluctunt to participate without CEO involvement. I empathize with the difficulty of agreeing on terms, i.e., what is a "return." Sounds basic, but is one of the most difficult hurdles.
--S Uitzetter, 01-06-2010

The article is well presented and provides a comprehensive description about utilizing cost of quality
--M. Nassereddin, 06-30-2009

--amel abdeen, 11-11-2008

Very interesting article. It shows that improvement that time, it's not a quick fix. Also, it's interesting to read that results substain over the years.
--Jocelyn Bouchard, 09-30-2008


(7) Member Reviews

Featured advertisers

ASQ is a global community of people passionate about quality, who use the tools, their ideas and expertise to make our world work better. ASQ: The Global Voice of Quality.