Toolkit 2: The Cost of Nonquality

Work Sheet 1: The Cost of Nonquality Tool, by Cost Area, Cost Item, Month, and Quarter
Cost area Cost item Unit Owner Jan

Production runs, batches Number Production

Still good product kg QA

Not first time Rework kg QA

right Degraded product kg QA
Scrapped product kg QA
Product: no decision (on hold) kg QA

Faults detected by producer Number QA

Customer complaints Number QA
Consumer complaints Number QA
Still good product kg QA
Rework kg QA
Degraded product kg QA
Scrapped product kg QA
Product: no decision (on hold) kg QA
Return shipments Number Operations
Cost of return shipments (transport, plus handling) $ Operations
Replacement shipments Number Operations
Complaints Product in replacement shipments kg Operations
Shipping cost, replacement (excluding product cost) $ Operations
Credit notes Number Operations
Value of credit notes $ Operations
Rebates and penalties Number Operations
Value of rebates and penalties $ Operations
Additional audits Number QA
QA travel costs in the last year, customer complaints $ Finance
QA travel time in the last year, customer complaints Hours QA
Sales-related travel costs in the last year, customer complaints $ Finance
Sales travel time in the last year, customer complaints Hours Sales
Other mitigation costs $ Sales

Severe issues Number QA

Still good product kg QA
Rework kg QA
Degraded product kg QA
Scrapped product kg QA
Product: no decision (on hold) kg QA
Return shipments Number Operations
Cost of return shipments (transport, plus handling) $ Operations
Replacement shipments Number Operations
 Product in replacement shipments kg Operations
Shipping cost, replacement (excluding product cost) $ Operations
Credit notes Number Operations
Value of credit notes $ Operations
Severe issues
Rebates and penalties Number Operations
Value of rebates and penalties $ Operations
Additional audits Number QA
Rescheduled production runs Number Production
Added production costs because of suboptimal planning $ Production
Compensation paid to customer as margin compensation $ Sales
Loss of turnover (until year-end), customers leaving $ Sales
Cost of external experts (laboratories and so on) $ QA
QA travel costs in the last year, customer severe issues $ Finance
QA travel time in the last year, customer severe issues Hours QA
Sales-related travel costs in the last year, customer severe issues $ Finance
Sales travel time in the last year, customer severe issues Hours Sales
Other mitigation costs $ Sales

Recalls Number QA
Still good product kg QA
Rework kg QA
Degraded product kg QA
Scrapped product kg QA
Product: no decision (on hold) kg QA
Return shipments Number Operations
Cost of return shipments (transport, plus handling) $ Operations
Replacement shipments Number Operations
Product in replacement shipments kg Operations
Shipping cost, replacement (excluding product cost) $ Operations
Credit notes Number Operations
Value of credit notes $ Operations
Rebates and penalties Number Operations
Value of rebates and penalties $ Operations
Recalls Additional audits Number QA
Rescheduled production runs Number Production
Additional production costs because of suboptimal planning $ Production
Compensation paid to customer as margin compensation $ Sales
Loss of turnover (until year-end), customers leaving $ Sales
Cost of external experts (laboratories and so on) $ QA
QA travel costs, customer recalls $ Finance
QA travel time, customer recalls Hours QA
Sales-related travel costs, customer recalls $ Finance
Sales travel time, customer recalls Hours Sales
Other mitigation costs $ Sales
Additional advertising costs because of public recall $ Sales
 Margin loss due to (temporary) stop sale of product(s) $ Sales
Margin loss due to (temporary) production pause (due to the authorities) $ Sales
Margin loss due to customers leaving $ Sales
Margin loss due to market access restrictions in other countries $ Sales
Note: QA = quality assurance.
Month, and Quarter
Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Dec Q1 Q2 Q3 Q4 Total