Cost of Quality Eludes Some Firms, Poll Finds

Most medium-sized manufacturers consider quality a top company priority, but nearly 70% don’t know how much their investments in quality cost, a survey said.

A national survey sponsored by the accounting and consulting firm Grant Thornton showed that 83% of all medium-sized manufacturers consider quality a high priority.

However, Allan Brown of Grant Thornton’s Philadelphia office said that only 31% of the manufacturers have calculated the value of their investments in technology, training and other steps taken to improve quality.

The survey of manufacturers with sales of $10 million to $500 million had a margin of error of plus or minus 6%.

“Measuring and lowering the cost of quality is a critical goal for any manufacturing company that’s serious about competing in the 1990s,” said Brown, the chairman of Thornton’s manufacturing industry group in Philadelphia. “If you don’t know what your quality improvement efforts costs, how can you tell if they are providing an adequate return on investment?”

Brown said the survey consisted of a random sample of 250 top executives of medium-sized companies who were interviewed by telephone in December, 1990.

Of the companies that calculated their cost of quality, the average cost was 9% of sales, the survey said.