The real price of poor quality
Rejection is the visible cost. The invisible ones — expediting, inspection, distrust — are usually triple.
When manufacturers calculate quality costs, they count scrap and rework. Real cost of poor quality is a pyramid, and scrap is only its visible tip.
Below it: the second inspection added because the first can't be trusted. The premium freight to replace a rejected lot. The engineer flying to a customer with a corrective action report. The negotiating position destroyed at annual price discussions because your defect PPM is the first slide the customer shows.
Deeper still: the orders you never won. Procurement teams talk to each other, and a reputation for quality problems closes doors silently — no rejection report, no complaint, just an RFQ list you're not on.
First pass yield is the metric that captures the truth. Not final quality — anyone can inspect their way to shippable product. FPY asks: how much came out right the first time? Every point of FPY improvement is simultaneously a cost reduction, a capacity increase, and a sales argument. Few numbers work that hard.
Performance Journal
Written by the RELY360 architects — from live engagements across Indian manufacturing.
The Question