2. The Cost of Quality Loss
A quality problem rarely costs only the value of the defective part. In manufacturing, it can mean additional inspection, rework, scrap, production disruption, warranty claims, returns, complaint handling — and, once the problem reaches the customer, lost goodwill and future sales.
Research gives us some useful examples:
What actually counts as poor-quality cost? The American Society for Quality (ASQ) separates failure costs into those found before the customer receives the product and those discovered afterwards. Manufacturing examples include scrap and rework internally, with returns, warranty claims and other customer-related costs once defects escape. ASQ also reports that in its 2025 Cost of Quality research, only 31% of respondents felt they fully understood the impact of quality costs on their organisation's financial performance.
A defect can cost considerably more than the material scrapped. Manufacturing research published in the International Journal of Production Economics modelled quality costs in an aerosol-can manufacturing case. It included not only inspection and testing, but rework, scrap, warranty claims, loss of goodwill and lost sales when evaluating the real cost of non-conformance. https://www.sciencedirect.com/.../abs/pii/S0925527317301135
Scrap and rework are significant enough to benchmark internationally. APQC manufacturing benchmarking, referenced by ASQ, compares scrap and rework performance across more than 870 organisations worldwide. Both are treated as costs that add no value and contribute to the cost of poor quality.
MC3 Method™ provides a structured way to diagnose where communication is contributing to quality problems, select appropriate tools, apply them in the workplace and evaluate what changes.
Where is communication contributing to quality loss in your organisation and are you seeing the full cost?
Find out where to start. Download the free MC3 Audit Toolkit and examine communication across your own systems and processes:
MC3 Method™ | Practical tools. Measurable progress.
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