CoPQ
Cost of Poor Quality
What a definition is not
A definition is SPEQ’s plain-language decode of how a term is used in practice, cited to the documents that define it. It is a practitioner reference, not legal or regulatory advice, it does not replace the definition in the source, and where a regulator’s wording differs the regulator’s wording governs.
The total cost a business incurs because of quality failures — internal failure (scrap, rework, investigations), external failure (recalls, complaints, lost trust), plus appraisal and prevention costs. Much of it is hidden below the line, like an iceberg.
The classic model splits quality costs four ways. Prevention — training, design, validation, supplier qualification — is spending that stops failure happening. Appraisal — testing, inspection, audits, monitoring — is spending that finds failure. Internal failure — scrap, rework, reprocessing, deviations and investigations, delayed release — is what failure costs before product leaves. External failure — recalls, complaints, field actions, regulatory action, lost contracts, reputational damage — is what it costs after. The first two are chosen; the last two are incurred.
The iceberg metaphor is apt because most organisations only measure what accounting already captures: scrap and rework. Below the line sit the costs that rarely reach a ledger — investigator and QA hours spent on deviations, delayed batch release and the working capital it ties up, expediting and overtime, requalification after a failure, management attention diverted from improvement, and the opportunity cost of capacity consumed making product twice.
The reason CoPQ matters strategically is that it converts quality from a cost centre into an investment argument. FDA’s Quality Management Maturity programme rests on the same logic at industry scale: unreliable manufacturing produces shortages and recalls, both of which are far more expensive than the prevention that would have avoided them. SPEQ’s CoPQ calculator estimates the visible and hidden components — an estimate to support a business case, not an accounting figure.
- —Four categories: prevention · appraisal · internal failure · external failure.
- —Prevention and appraisal are chosen spend; internal and external failure are incurred.
- —Most organisations measure only scrap and rework — the visible tip.
- —Hidden costs: investigation hours, delayed release, expediting, requalification, diverted management attention, lost capacity.
- —Shifting spend from failure toward prevention typically lowers total cost, not just failure cost.
- —The economic case behind FDA QMM: unreliable manufacturing drives shortages and recalls.
A quality-management and cost-accounting concept (the prevention-appraisal-failure model), not a regulatory requirement. It connects to ICH Q10 (continual improvement and management review) and underpins the economic rationale of the FDA CDER Quality Management Maturity programme.
Frequently asked questions
What does CoPQ stand for?
CoPQ stands for Cost of Poor Quality.
What is CoPQ?
The total cost a business incurs because of quality failures — internal failure (scrap, rework, investigations), external failure (recalls, complaints, lost trust), plus appraisal and prevention costs. Much of it is hidden below the line, like an iceberg.
Which regulations cover CoPQ?
A quality-management and cost-accounting concept (the prevention-appraisal-failure model), not a regulatory requirement. It connects to ICH Q10 (continual improvement and management review) and underpins the economic rationale of the FDA CDER Quality Management Maturity programme.