• LC Brown

Cost of Poor Quality

The CredAbility logo symbolizes the tip of an iceberg. Because that is mostly all that you see.

Compliance officers and other functions in charge of anti-corruption sometimes find it difficult to gain the ear of top management. Especially in a country like Sweden, with historically relatively high transparency and low corruption.

Here's some food for thought. Did you know that there are currently around 470,000 'co-ordination numbers', a kind of initial personal identity number, issued in Sweden to persons without validated identity. The market for illegal workforce is at an all-time high, according to the tax authorities.

At the seminar on whistle-blowing held in Stockholm on the 7th February co-hosted by CredAbility, it was clearly pointed out that corruption and the use of illegal workers is associated with poor quality higher costs over time.

What is Cost of Poor Quality (COPQ)?

The concept is used in Six Sigma Lean Management, which is was first in touch with 16 years ago, in my role as six sigma-project manager.

COPQs are found in many places and are often not totally visible, or visible at all. Corrupted management systems is the converse means to COPQs, and involve (not limited to!):

Cost of lost business goodwill

Project-change costs

Cost of loss of face

Cost for missed opportunities and lost assets

Cost of lost management time

Cost of under-performance due to wrong choice of business partners

The list can be made long. And very specific. Would an illegal worker using a fake ID bought with bribes be prone to report mold or faulty construction? Do you even know if your sub-contractor is using illegal workers?

Do you want to adress the overall quality of performance in your business? Then you also need to consider preventing bribery and corruption as part of that endeavour. The issue is real. Also, or perhaps 'even', in Sweden.

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