The point of measuring COPQ is to move money from the failure buckets into prevention. A dollar spent stopping solder bridges at the stencil usually saves several dollars in scrap, rework, retest, and returns. The decision rule is simple: compare the prevention investment against the expected reduction in failure cost. If the saving exceeds the spend within a reasonable payback, usually under a year, do it.
Appraisal is the tempting middle ground. Adding inspectors catches more defects before they ship, which lowers external failure but raises internal failure and appraisal cost. It does not reduce the total much. Inspection is a holding action while prevention fixes the cause. Treat a growing appraisal budget as a warning sign, not a solution.
A monthly COPQ report keeps the effort alive. One page is enough: the four category totals, the total as a percent of sales, a trend line for the last 12 months, and the top three failure drivers ranked by cost. The top-three list, sometimes called a Pareto list, tells the team where next month's prevention effort goes. Review it at the monthly operations meeting with finance in the room.
Standard Procedure
- 1Rank failure costs by cause and pick the largest driver.
- 2Estimate the prevention investment needed to remove or reduce that cause.
- 3Estimate the resulting reduction in internal and external failure cost and compare it with the investment.
- 4Build a one-page monthly report: four category totals, percent of sales, 12-month trend, top three drivers.
- 5Review the report monthly and assign the next prevention project from the top of the driver list.
Lesson Summary
- ✓Prevention spending pays back through lower failure cost; appraisal only moves failure cost from external to internal.
- ✓A one-page monthly report with category totals, percent of sales, trend, and top drivers keeps the work focused.