CFO Series: Quality is Free- But How do We Measure the Cost?

Overview

Customers demand quality. We expect quality in what we do and in what we consume. In 1985, Philip Crosby told us that quality is free. We will examine Crosby’s statement and look at the four aspects of the cost of quality - prevention, appraisal, internal failure, and external failure. What are the true costs associated with each of these elements? How can we determine how each aspect can be measured? We will test the adage that an ounce of prevention is worth a pound of cure to see if this 16:1 relationship holds true. Quality matters, and we need to know how to evaluate the true cost of quality and what the value is.

Highlights

The major topics that will be covered in this course include:

• What do we mean by quality?
• Why does quality pay off?
• Total quality management, including lean and six sigma.
• The four elements of the cost of quality.
• Practical prevention activities.
• The necessity of appraisal and why quality cannot be inspected into a process.
• Sources of internal failure and other sources you may not have considered.
• External failure and the hidden costs of 'shortcuts'.
• Creating an effective and actionable cost of quality report.

Prerequisites

None, preferred exposure to service, product and process quality issues.

Designed For

Corporate financial leaders, corporate financial managers, CEOs, CFOs, Controllers, accountants, Board members, advisors, and Consultants. CPAs in public practice and CPAs in industry. Business owners, entrepreneurs and professionals who are interested in understanding the true value of quality.

Objectives

After attending this presentation, you will be able to...

• Comprehend the process to determine the cost of quality within your organization.
• Recognize why quality matters and is so valuable.

Preparation

None