Quality-related costs are the costs that are incurred by a company for planning and assuring the quality of a product or service, based on predefined quality requirements. These costs cover a wide range of expenses relating to the tasks of quality assurance. In the
Quality Management
(QM) application component there are the following quality-related costs:
Appraisal costs
These costs are associated with inspection processing activities (for example, labor, material and equipment costs for inspections).
Nonconformity costs
Nonconformity costs cover internal or external nonconformities that are associated with a product or service (for example, defect costs, rework costs or warranty expenses). You record costs of this type when you process quality notifications.
In the QM component, you can only record the actual appraisal and nonconformity costs. Functions for managing planned costs are currently not supported. Other types of quality-related costs, such as prevention costs, can also be recorded in other SAP application components. For example, you can record the expenses for training the quality inspectors in the Human Resources (HR) component.
The recording of quality-related costs is essential for a successful quality management program. In many companies and service organizations, the quality-related costs can represent a sizable share of the organization's expenditure. By recording its quality-related costs effectively, a company can control these costs and improve quality. This results in increased productivity and competitiveness, while improving customer satisfaction.