Work out cost of quality ratio instantly with clear inputs, formula shown and shareable results.
The prevention-appraisal-failure model splits quality spend into money spent avoiding defects, money spent finding them and money lost because of them. A failure-to-good-quality ratio above 1 means the organisation is paying more for failures than for prevention and inspection combined — the classic signal to invest upstream.
Cost of quality
COQ = prevention + appraisal + failure cost
Balance ratio
Failure to good-quality ratio = failure cost / (prevention + appraisal)
Mature operations shift towards prevention: roughly 25-30% prevention, 30-35% appraisal and under 40% failure. Struggling operations show 5% prevention and 70% failure.
Yes, once processes are capable. Moving from 100% inspection to statistical process control and then to process capability evidence is the normal route, but only after capability is demonstrated.