Using the popular categories of quality costs: prevention, appraisal, internal failure and external failure, the quality cost elements of a Supplier Quality Assurance program are defined.
Several methods of using these costs to measure both the effectiveness of a Supplier Quality Assurance program and the performance of suppliers are discussed.
These measurements include the relationship between investment and results, purchasing’s cost recovery performance, loss of productivity due to purchased defects, percent defective purchased dollars and True Price Index.
