charlie gragg ceo software engineering applications solutions, inc

Cost of Quality

Charlie GraggCEOSoftware Engineering Applications Solutions, Inc.

Agenda

Cost of Quality DefinitionsMeasuring COQUsing COQ

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Cost Of Quality Definitions

Cost of Good Quality The resources expended creating and

delivering a product or service free of defects not including any cost expended associated with re-conducting a process that resulted in a non-perfect product.

Cost Of Quality The total resources expended creating

and delivering a product or service free of defects.

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Good and TotalCost of Quality

Measuring COQ

Define Quality Activities Identify Activity Action TakersDetermine Activity Action Taker Cost

RatesDetermine Activity DurationCalculate Activity CostRecord Quality Activities Per PeriodCalculate COQ Per Period (Phase,

Iteration, etc.)

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Define Quality Activities

Five Major Areas Prevention Appraisal Internal Failure External Failure Facilities

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Prevention

Risk ManagementMeetingsDocumentationTrainingTestingChange ManagementReports

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Appraisal

ReviewsAssessmentsDHF DocumentationDHF Audits

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Internal Failure

Exception Reports InvestigationsCAPA’sDefect Correction

Requirements Design Code Smoke Verification (Regression) Validation (Regression)

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External Failure

Exception Reports InvestigationsCAPA’sDefect Correction On Market

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Facilities

RentUtilities

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Quality Activities

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Activity Examples

The following 11 Slides provide examples of Activity Data.

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Action Takers

Employee Category

Clerical

Exempt Grade 12

Indirect Labor

Exempt Grade 14

Exempt Grade 16

Section Manager

Department Manager

S/W Developers

Vice Pres

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Action Taker Cost Rates

Employee Category Code Salary/Hour

Clerical CL $20

Exempt Grade 12 E12 $30

Indirect Labor IL $40

Exempt Grade 14 E14 $50

Exempt Grade 16 E16 $60

Section Manager E18 $70

Department Manager E20 $80

S/W Developers DV $90

Vice Pres VP $100

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Average Activity CostDefect Correction – Smoke Test

DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Unit Test Execution 1 0.25 1-DV $22.50

Code Reviews 3 0.25 3-DV $67.50

Conduct Engineering Test 1 0.5 1-IL $13.00

SCR Update 1 0.25 1-E-12 $5.00

Total Activity Cost$208.00

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Activities Per Period

Internal Failure Costs EventsException Reports 1Investigations 2CAPA's 1Defect Correction (Pre-Market) 56Internal Failure Costs Sub-Total

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COQ Calculation

Internal Failure Costs Events Event Cost Events CostException Reports 1 136.00$ 136.00$ Investigations 2 1,005.00$ 2,010.00$ CAPA's 1 1,895.00$ 1,895.00$ Defect Correction (Pre-Market) 56 652.50$ 36,540.00$ Internal Failure Costs Sub-Total 40,581.00$

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Total Activity Cost $15.00

Requirement Defect Correction (Requirements)

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Total Activity Cost $105.00

Requirement Defect Correction (Design)

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Unit Test Execution 1 0.25 1-DV $22.50

Code Reviews 3 0.25 3-DV $67.50

Total Activity Cost $195.00

Requirement Defect Correction(Coding)

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Unit Test Execution 1 0.25 1-DV $22.50

Code Reviews 3 0.25 3-DV $67.50

Conduct Engineering Test 1 0.5 1-IL $13.00

SCR Update 1 0.25 1-E-12 $5.00

Total Activity Cost $208.00

Requirement Defect Correction(Smoke Testing)

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub-activity cost

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Unit Test Execution 1 0.25 1-DV $22.50

Code Reviews 3 0.25 3-DV $67.50

Conduct Engineering Test 1 0.5 1-IL $13.00

Conduct Verification Test 1 0.5 1-E-14 $15.00

SCR Update 1 0.25 1-E-12 $5.00

Total Activity Cost $223.00

Requirement Defect Correction(Verification)

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DescriptionQty of

Employeesinvolved

Time (hour)

Employee'sCategory

Sub- activity cost

Root Cause Analysis 1 4 1-DV $360.00

Requirements Analysis 1 0.5 1-E-14 $15.00

Code Creations 1 1 1-DV $90.00

Unit Test Execution 1 0.25 1-DV $22.50

Code Reviews 3 0.25 3-DV $67.50

Conduct Engineering Test 1 0.5 1-IL $13.00

Conduct Verification Test 1 0.5 1-E-14 $15.00

SCR Update 1 0.25 1-E-12 $5.00

Validation 1 0.5 1-E-14 $15.00

C&R 1 8 1-E-14 $240.00

Total Activity Cost $843.00

Requirement Defect Correction(On-Market)

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Requirement Defect Correction Costs

Defect Cost

$-$200.00$400.00$600.00$800.00

$1,000.00

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Using COQ

Measure Activity Costs Over Time Phase Iteration Project

Identify Likely Improvement AreasFacilitate Quality ImprovementsRealize Cost Reductions thru Process

Improvement

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Questions