• Customers dissatisfied with quality or on-time delivery performance
• Nonconforming supplier product found during internal production operations
• Excessive costs traceable to poor quality issues

These conditions are symptomatic of ineffective quality systems.  And ineffective quality systems cost plenty in terms of margin, reputation and future business.  Here are some benchmarks:

• Businesses which have achieved significant quality improvement earn 8% higher prices
• Businesses who achieve a superior quality position are 3X more profitable as those with inferior levels of quality
• Businesses who improved their quality gained 4% market share per year
• Each significant positive shift in process capability equates to a 10X improvement in profitability

Source:  The Vision of Six Sigma:  A Roadmap for Breakthrough, Mikel J. Harry, Ph.D., Sigma Publishing Company, Phoenix, 1994.

• "The negative effect on profits, resulting from product or service of less than acceptable quality or from ineffective quality management, is almost always dynamic.  Once started, it continues to mushroom until ultimately the company finds itself in serious financial difficulties due to the two-pronged impact of unheeded increase in quality costs coupled with a declining performance image."

Source:  Principles of Quality Costs, 3rd Edition, ASQ Quality Costs Committee, Jack Campanella, editor, ASQ Quality Press, Milwaukee, 1999.