Six Sigma Cost of Quality Example

This chart provided the cost of re-work (corrective activity) to the Money Transfer department
manager of a bank. Notice that 1st corrective activity costs total $37,387 and SWIFT 1st
corrective activity costs were $25,370. The department was able to cut re-work cost by 80%
to save more than $30,000. This report was created during a 6 week project.
 

The next 2 companion charts provide the annual dollar cost and hourly cost of "follow-up" work such as
error research, corrections, and resolution in a bank.  It was used to discover which processes incur the
highest poor quality costs and the root-cause of the follow-up work.

This banking operation reduced its poor quality costs by over $2 million resulting in a 13% operating budget
cost reduction. These Cost of Quality models were created in an 8 week  project that was conducted with the
company's 4 service centers.

The next 2 companion charts provide the monthly percent and cost of the resolution
status for  types of calls that an insurance company's call center handles. It is used
to understand and reduce the costs of calls that are not closed to customers' satisfaction.
The department improved "closed to customer satisfaction" by 16% and also reduced
activity costs by more than $250,000. It was created during a 12 week  project that was
conducted with the company's call center.

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