Quantify the true financial impact of defects by combining internal failure, external failure, appraisal and prevention costs — so leadership can see quality losses in pounds, not percentages.
Enter your values on the left, then press Calculate.
Annual revenue of £8.5m with £153k in quality costs. Enter the lab and see what poor quality is really costing as a percentage of turnover.
Use the calculator above to combine internal failure, external failure, appraisal and prevention costs into a single Cost of Poor Quality figure. COPQ converts defects, scrap, rework, warranty and inspection effort into pounds — the language leadership actually responds to when prioritising quality investment.
Cost of Poor Quality (COPQ) is the total cost an organisation incurs because its processes do not produce right-first-time. It groups all quality-related cost into four buckets — internal failure (scrap, rework), external failure (warranty, returns, recalls), appraisal (inspection, audit) and prevention (training, mistake-proofing).
COPQ = Internal Failure + External Failure + Appraisal + Prevention. The calculator sums the four buckets and expresses the total in pounds and as a percentage of revenue. Typical organisations sit between 15% and 25% of revenue — most of which is invisible because it is buried in indirect cost centres.
A £20m manufacturer reports scrap and rework of £600k, warranty and returns of £400k, inspection labour of £350k, and prevention spend of £150k. COPQ = £1.5m, or 7.5% of revenue — and the bulk sits in internal and external failure, both avoidable.
Shifting £200k of failure cost into prevention (training, poka-yoke, supplier development) typically cuts failure costs by £400-600k within twelve months. The COPQ figure makes that business case visible in pounds, not in defect counts.
COPQ exposes the true cost of poor quality across the four cost categories. Once leadership sees the pound figure, quality moves from a departmental KPI to a board-level priority.
Use COPQ when building a business case for Six Sigma, prioritising improvement portfolios, justifying prevention spend, or benchmarking quality cost against peers.
COPQ is the headline financial metric of any Six Sigma programme. Every DMAIC project should be sized against COPQ reduction to ensure the work is worth the effort.
Pareto the four cost buckets, then drill into the largest. Most quality programmes shift spend from appraisal and failure into prevention — and watch failure cost fall by two-to-three times the additional prevention spend within a year.
Pair COPQ with DPMO, Pareto and project-level financial benefit tracking. The resources below help convert the headline number into a structured improvement portfolio.
The total cost an organisation incurs because its processes do not produce right-first-time. Includes scrap, rework, warranty, returns, inspection and prevention spend.
Internal failure (scrap, rework), external failure (warranty, returns, recalls), appraisal (inspection, audit) and prevention (training, mistake-proofing). Failure costs dominate; prevention costs prevent them.
Most organisations sit between 15% and 25% of revenue. Mature Six Sigma organisations target under 5%. The right benchmark is your own COPQ improvement year-on-year.
Shift spend from appraisal and failure into prevention. Every £1 invested in prevention typically reduces failure cost by £3-£10 within twelve months in mature programmes.
Cost of Quality includes both COPQ (failure and appraisal) and good quality cost (prevention). COPQ specifically focuses on the avoidable cost — what could be eliminated by getting it right first time.
Want to build a full business case using COPQ as part of a structured project? The Green Belt covers this in full.
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