The cost of low quality
For a company that has the possibility to buy a widget from more than one supplier or manufacturer, it is difficult to evaluate which supplier is providing the best value, based solely on their price. The invisible costs carry the most risk, and overall they have the largest impact on overall cost. So how could price be the deciding factor?
The fact is that risk and soaring costs go hand in hand. And while a company may work hard to improve process, lower risk and improve predictability to drive down internal costs, the causes of low quality may come from sources that are not under company’s control. Or apparently not, anyway. It is in fact quite common that supply side issues are constant disrupters, adding to costs of inspections,