As a full time auditor for the past six years for one of the large management system registrars, I start every interview, from production personnel to the CEO, with the question: “Given all of your job responsibilities at this company, what does the word ‘quality’ mean in your work?” Most answers center around the idea of satisfying the customer (both internal and external). To the supervisors/managers, I will then point out that they do not make anything. Most eventually come back to the idea that their job is to ensure the work is done to satisfy the customer. I will then start looking at the metrics that management uses—nearly every scorecard has a quality cost number assigned to the quality department!
In the past six years, I have annually reviewed over sixty-five management systems, and have always been interested in how the company manages the overall business. A few companies have utilized some variant of quality function deployment to derive their key performance indicators (KPI) and most use some sort of Excel spreadsheet to track monthly trends of those metrics. What I see missing in most cases is the use of some traditional form of cost of quality (COQ, also called: cost of poor quality, cost of current quality or quality costs) metric. The numbers are only tracking scrap and the cost of corrective action, which should be part of the internal and/or external failure portion of COQ.