What does the term "cost of poor quality" (COPQ) encompass?

The term "cost of poor quality" (COPQ) specifically refers to the costs incurred when a company fails to produce a quality product or service that meets customer expectations. This concept captures both the direct and indirect costs associated with poor quality, which can include the costs of rework, scrap, warranty claims, and lost sales due to customer dissatisfaction. By focusing on the financial impact of producing defective products or services, organizations can identify areas for improvement that will ultimately reduce waste, enhance customer satisfaction, and improve overall profitability.

The other aspects, such as supply chain management costs, marketing strategies, and employee training expenses, contribute to a company's operational and strategic expenditures but do not directly relate to the concept of COPQ. These costs do not reflect the penalties or expenses associated with failing to meet quality standards, thus highlighting why the correct understanding of COPQ is crucial for businesses aiming to achieve excellence in quality management.