Free PowerPoint on Cost of Quality in Home Building

December 5, 2014

So often the thought for increasing profit is to build more homes. When in fact, the easiest way to increase profit is to reduce the Cost of Poor Quality.

Cost of Quality (COQ) consists of:

Prevention Costs

Appraisal Costs

Failure Costs

Prevention and Appraisal Costs are the normal costs involved in a well-functioning business. However, Failure Costs are the Costs of Poor Quality! By reducing the Failure Costs, the profitability of each home is increased.  In most organizations the Failure Costs exceed the costs of Prevention and Appraisal.

At last month’s (Nov., 2014) annual meeting hosted by the Best Practices Research Alliance and IBACOS, there was a great presentation on COQ by Glenn Cottrell, VP and Director of Builder Solutions at IBACOS.  The presentation provided insights to the COQ profile for home builders, how those costs typically breakdown and how action can be taken.

Here is a link to the Alliance COQ presentation: 'How to steal $10K more in profit per house'

Glenn can be contacted at to learn more about the analysis behind his presentation.

To learn more about IBACOS and the Best Practices Research Alliance, visit and

What could you be saving on jobsite waste, construction oversight, cycle-time and warranty? 

The research, case studies and $ for these are provided in the presentation.

How do your Prevention, Appraisal and Failure cost profiles line up? 

What is your COQ?

Where and how can you save and increase your profits?

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Denis Leonard has a degree in construction engineering an M.B.A. and a Ph.D. in quality management. Denis is a Fellow of the American Society for Quality, a Certified Quality Manager, Auditor, and Six Sigma Black Belt. He has been an Examiner for the Baldrige National Quality Award Board of Examiners a Judge on the International Team Excellence Competition and a Lead Judge on the National Housing Quality Award. A former Professor of Quality at the University of Wisconsin, he has experience as a quality manager in the home building industry as well as construction engineer, site manager, and in training, auditing, and consulting with expertise in strategic and operational quality improvement initiatives. His work has achieved national quality, environmental, and safety management awards for clients. 

Denis is co-author of The Executive Guide to Understanding and Implementing the Baldrige Criteria: Improve Revenue and Create Organizational Excellence.