Cost of Poor Quality Report
Overview
Below is a clear, business‑focused explanation of the Cost of Poor Quality Report in Dafater, written for managers, operations leaders, and quality teams.
Cost of Poor Quality Report
Module: Manufacturing
Report Type: Management Report
Based On: Job Card activities
1. What Business Information This Report Provides
The Cost of Poor Quality Report shows how much money the business is losing due to quality‑related problems during production.
It converts quality failures into financial impact, helping management clearly see:
- Costs caused by rework
- Losses due to scrap or rejected materials
- Additional labor and machine time spent correcting errors
- The overall financial burden of poor production quality
In simple terms, this report answers the question:
“How much is poor quality really costing our business?”
2. When and Why to Use This Report
When to Use
- During monthly or quarterly performance reviews
- When production costs are increasing unexpectedly
- After repeated quality complaints or internal rejections
- While reviewing manufacturing efficiency and margins
- Before launching process improvement or cost‑reduction initiatives
Why to Use
- To identify hidden costs that do not appear clearly in standard production reports
- To justify investments in training, quality control, or process improvements
- To hold teams accountable for quality outcomes
- To prioritize which products, operations, or work centers need improvement
3. Key Columns and What They Mean for Business
While column names may vary, the report typically includes:
Job Card / Production Reference
- Identifies the specific production activity where quality issues occurred
- Helps trace problems back to a specific operation or stage
Item or Product
- Shows which products are generating the highest quality‑related costs
- Useful for product‑level profitability analysis
Operation / Workstation
- Indicates where the quality issue occurred
- Helps pinpoint problem areas in the production process
Rework Cost
- Cost of labor, machine time, or materials used to fix defects
- High values indicate inefficient or error‑prone processes
Scrap or Rejection Cost
- Value of materials or products that could not be recovered
- Directly impacts material waste and gross margin
Total Cost of Poor Quality
- Combined financial impact of all quality failures
- The most important column for management review
4. Available Filters and Their Business Purpose
Date Range
- Analyze quality costs for a specific period
- Useful for trend comparison (month‑over‑month or year‑over‑year)
Product or Item
- Focus on high‑value or high‑volume products
- Helps identify products that erode profitability
Workstation / Operation
- Narrow down problem areas in the manufacturing process
- Supports targeted corrective actions
Production Order or Job Card
- Drill down into specific production runs
- Useful for root‑cause analysis
Company or Manufacturing Unit (if applicable)
- Compare quality performance across plants or business units
5. How to Interpret the Results for Business Decisions
High Rework Costs
- Indicates training gaps, unclear work instructions, or process instability
- Business action: Improve standard procedures or operator training
High Scrap Costs
- Suggests material handling issues, machine calibration problems, or design flaws
- Business action: Review material quality, machine maintenance, or product design
Concentration of Costs in Specific Products
- Shows which products are hurting margins
- Business action: Reprice products, redesign processes, or reconsider production strategy
Repeated Issues at the Same Operation
- Signals systemic process problems
- Business action: Redesign workflow or invest in better tooling or automation
6. Common Use Cases and Scenarios
Management Review Meetings
- Used to present quality performance in financial terms
- Supports data‑driven decision making
Continuous Improvement Programs
- Helps track the financial impact of quality initiatives over time
- Measures return on improvement efforts
Cost Reduction Planning
- Identifies where cost savings can be achieved by reducing defects
- Helps prioritize improvement projects
Audit and Compliance Reviews
- Demonstrates control over quality‑related costs
- Supports internal and external audits
Profitability Analysis
- Links quality performance directly to product and business profitability
- Helps leadership focus on sustainable growth
Summary
The Cost of Poor Quality Report in Dafater transforms quality problems into clear financial insights. It enables businesses to understand where money is being lost due to defects, rework, and scrap, and empowers leadership to take focused, corrective action that improves efficiency, reduces waste, and protects profit margins.
Report Information
- Module: Manufacturing
- Related DocType: Job Card
- Report Type: Script Report
- Standard: Yes