Quality engineering

Cost of quality

Quality costs money when it is planned, and much more when it is missing. The cost of quality model makes both visible.

01The four categories

  • Prevention: quality planning, FMEA, training, supplier development, process capability work.
  • Appraisal: inspection, testing, audits, calibration.
  • Internal failure: scrap, rework, re-inspection, downtime, before delivery.
  • External failure: returns, warranty, field repair, recalls, penalties, lost customers.

Prevention and appraisal are costs of conformance; failures are costs of nonconformance.

02Typical profiles

Reactive organisations spend little on prevention and a lot on failures. As prevention increases, failure costs usually fall faster than prevention costs rise. The illustration shows three typical profiles.

Cost of quality profile

Relative cost index for prevention, appraisal and failure in three typical supplier situations.

Illustrative data

Failure costs usually fall faster than prevention costs rise.

03Measuring it

Start with what is available: scrap and rework reports, warranty costs, inspection hours, sorting costs at the customer, freight for replacements. Even rough numbers make priorities obvious. Use the cost of quality calculator.

04Supplier quality and cost

A defect found at the supplier costs a fraction of one found at the customer's assembly line or in the field. Independent inspection and supplier development are prevention and early appraisal investments.

Published 2026-11-08 · QUALITAS TR technical team

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