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Six Sigma Training : Direct Cost of Poor Quality Iceberg

Posted in Lean Six Sigma

Direct and Indirect Cost of Poor Quality
Problems in the company will gradually mounting like an iceberg if it does not get serious treatment. Problem after problem will freeze into a single large company problem. The real problem could be easily identified and can take action quickly, but the iceberg contains more problems that are not visible and have a high finance.

As shown in the picture. Ice Mountain is a huge stumbling block, turned out to save the ice did not seem even bigger problems.

Real problems, for example.
Scraps: do not reject the remaining waste product in accordance with the specifications, by naked eye can be calculated economic value. Not only that raw materials that do not qualify for the production or defects due to poor handling will be turned into scrap to be discarded.

Reworks: error procedure, setting errors and error inspection engine will be forced to rework processes that do not fit standard product (rework), but in certain product rework cannot be done. If no rework means the product is categorized as scrap.

Warranty: warranty is an effort towards customer service excellence, but if it fails within the warranty period that has been provided then the loss will be borne by the manufacturer company. Will significantly increase the cost burden of the company.