If you don't measure it, you can't improve it!

What is the Hidden Factory?

And why should you care?


What if someone told you that within your business, whether it is a factory, an office or even a hospital, you have a separate little business that is a miniature, mirrored image of the full-sized operation. 

The only difference besides size is that everyone's job in this mini-operation is to make, find or fix bad products or services, all day, every day.  The equipment in the mini-facility is dedicated strictly to making bad products and reworking the rejects if possible.  The inventory...you guessed it.  It all becomes scrap. 

This scenario, harsh as it sounds, is a reality.  Even though no one goes to work in the morning with the intention of making junk, by understanding our cost of quality, we can quantify the number of equivalent work hours that are spent in this "hidden factory, hidden office," or "hidden [you fill in the blank]."
 
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What is the Hidden Factory costing your business?


Chances are you don't really know what the hidden factory is costing your business.  That is because, while some of the costs are obvious (for example, scrap and rework, inspection and training people to find and fix problems), lurking beneath the surface of those obvious costs are a whole lot of other expenses that we often don't think about and that can be difficult to measure.
Most organizations do have reports in place to measure and track quality costs.  However, existing reports usually track visible (traditional) quality factors.  But there is more to the full Cost of Quality than visible costs.  When a substandard quality event does occur, a complex series of costly events is triggered - the hidden costs.  Since the impact of hidden costs is not (usually) tracked, their impact may not even be understood.  
A formal COQ program includes a structured approach that:
  • Collects COQ data, both visible and hidden.
  • Groups the data into like categories so that it can be analyzed.
  • Prioritizes the areas that need attention.
  • Acts as the catalyst to initiate improvement efforts.
  • Tracks the progress of COQ improvement efforts over time.

Helpful Resources On Cost of Quality

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Cost of Quality Training for Your Team

With our online Cost of Quality training course, your team will learn how to measure, track and reduce quality costs.  

To celebrate Cost of Quality as the 50th course we have created, now through the end of August, you can purchase the course for just $59 per learner.
Introductory Offer - Cost of Quality Course is just $59!
Offer expires on August 31, 2016.

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