To calculate the Cost of Poor Quality, expressed in Sigma Level, DPMO and $$$$

COPQ Calculator

Cost of Poor Quality, otherwise known as COPQ, is a tool used often by Lean and Six Sigma specialists, when determining their problem statement for a quality improvement based project. The COPQ Calculator will quickly assist you in determining the size of the quality problem at hand. Once you know the size of the problem, you can determine if it is an issue worth working on to resolve, or if there is another process which needs your attention more.

“A problem well stated is a problem half solved”

Charles F. Kettering, American Engineer & Inventor (1876-1958)

The COPQ Calculator asks for four pieces of information:

Name of the Product or Service with the Quality Issue.

Current Scrap / Rework / Defect Rate (as a percentage of all work).

Cost per Unit.

Number of Units produced in a typical year.

Help screen options do exist to assist you with each of the numerical inputs.

The COPQ Calculator will provide a report (on screen and with an email option) with the following information:

Defects per Million Opportunities (DPMO) Rate: This is a metric often used to describe quality rates, by projecting the organisation’s defect rate out to a million units produced. That way, similar businesses can benchmark themselves, or other internal processes, and it also puts some emphasis on the defect rate, rather than a seemingly small percentage.

Sigma Level: A Six Sigma (6σ) process is where six ‘Standard Deviations’ of data fit between the target parameters (or Upper & Lower Specification Limits). Six Sigma (6σ) is globally recognised as a quality benchmark where no more than 3.4 defects occur for every million units produced. Therefore, a 6σ process is 99.9997% accurate (Right First Time). The COPQ Calculator will provide you with your process (short term) Sigma Level, as in most cases, the defect rate data is collected via samples. Should you wish to convert to a long term Sigma Level, the accepted statistically method is to simply subtract 1.5 points from your score.

Annualised Financial Losses: The COPQ Calculator will determine the annual financial loss of the poor quality element of your chosen process. You may choose to calculate the losses in profit, sales, production, labour or any other financial metric that makes sense for your specific product or service.

Essentially, the COPQ Calculator is a project chartering tool to determine the losses incurred by a process not hitting its targets, first time, every time, which is the first big step towards making sustained improvements.