What does a high cost of quality typically indicate?

A high cost of quality typically indicates ineffective process management. This concept is rooted in the understanding that the cost of quality encompasses not just the expenses related to preventing defects, but also the costs incurred from failures—both internal and external. When organizations experience high costs in these areas, it often points to issues such as poor process design, lack of training, insufficient quality control measures, or failure to use data effectively to identify areas needing improvement.

In contrast, high quality outputs, improvements in process stability, and low defect rates are desirable outcomes of effective quality management practices. These outcomes generally correlate with lower costs of quality because they indicate efficient and effective processes that minimize waste, defects, and the reputational risks associated with poor quality. Therefore, when quality costs are high, it suggests that the management of processes and quality control is not functioning as optimally as it should be.