Quality costs

1. Prevention Costs
1.Customer / User Perception Surveys / Studies
2.Supplier qualification
3.Opinions on technical data on purchase orders
4.Validation of the operations process
5.Process Control / Statistical Control of the Operator
6.Administrative expenses
7.Quality performance reports
8.Quality System Audits

2. Evaluation/Appraisal Costs
1.Of inspections and tests of measuring equipment
2.Vendor Product Qualification
3.Workmanship verification
4.Quality audits of products or services
5.Commissioning inspections and tests
6.Laboratory support
7.Maintenance and calibration work
8.Field stock assessment and spare parts
9.Review of test and inspection data

3. Cost of Internal Fails

1.Product / service design error costs
2.Rework due to design changes
3.Rejection due to design changes
4.Disposal costs of rejected purchased material
5.Loss of uncontrolled material
6.Review of materials and corrective action costs
7.Troubleshooting or failure analysis costs
8.Research costs
9.Corrective action cost in operations
10.Rework and Repair Operations Costs
11.Re-inspection / Re-evaluation of costs
12.Cost of final product or degraded service

4. Cost of External Fails

1.Investigations of customer or user service complaints
2.Returned goods or services
3.Reconstruction / remanufacturing and recovery costs
4.Warranty claims
5.Sanctions
6.Lost sales
 Poor Workplace Organization Means Waste
Unneeded inventory: expenses and obsolescence due to design changes, limited shelf
life, etc.
Extra manpower
Extra time spent looking for parts
Unneeded in-process inventory and machine breakdowns
Unneeded equipment obstacles
Designing factory/office layouts more difficult

5S: Major Benefits

1.Improves safety / Reduces accidents

2.Reduces downtime
3.Enhances operational control of processes
4.Creates a healthier corporate climate
5.Improves product quality
6.Improves efficiency and productivity
7.Improves delivery times and assists in reducing costs
8.Creates a positive work environment
9.Improves customer perceptions

Key Characteristics in a 5S Environment

An easily understandable layout

An open view
A clean atmosphere
Active management