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Scrap Reduction What is Cost of Quality ? Cost of quality is the amount of money a business loses because its product or service was not done right in the first place. From fixing a warped piece on the assembly line to having to deal with a lawsuit because of a malfunctioning machine or a badly performed service, businesses lose money every day due to poor quality. For most businesses, this can run from 15 to 30 percent of their total costs. 6 sigma 3.4 defects per million <10% of sales (World class) 5 sigma 233 parts per million 10-15% of sales 4 sigma 6,210 parts per million 15-20% of sales (Industry average) 3 sigma 66,807 parts per million 20-30% of sales 2 sigma 308,537 parts per million 30-40% of sales (Noncompetitive) Why do we need to reduce scrap?
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