Quality cost deployment (QCD): a Lean-Inspired methodology for systematic reduction of total quality costs

Purpose – This paper aims to tackle a key challenge in Lean Six Sigma (LSS): the rigorous financial justification and prioritisation of improvement projects. It introduces Quality Cost Deployment (QCD), a novel methodology to enhance the LSS toolkit by systematically linking Cost of Quality (CoQ) data to specific operational root causes. QCD provides a structured, financially-driven framework to evaluate and select initiatives, ensuring resources target projects with the highest strategic return. Design/methodology/approach – The paper proposes a structured, five-step methodology that deploys five interconnected matrices to systematically map quality-related financial losses to their operational root causes, quantifies the financial impact of each cause and enables data-driven project selection. The methodology’s practical application and effectiveness are validated through an empirical case study within an electronics manufacturing firm. Findings – The case study validates QCD’s effectiveness for strategic project selection. It uncovered significant financial losses by tracing them to origins like inadequate training, which contributed to a €51, 000 annual loss. The analysis justified an improvement portfolio with a €35, 000 investment, projected to deliver a three-year Net Present Value of €160, 202, demonstrating a substantial return. Originality/value – This paper contributes a new framework to the LSS toolkit. It addresses the gap between strategic CoQ analysis and operational deployment. QCD provides a structured, matrix-driven methodology to systematically link financial losses to their operational root causes. This operationalises CoQ insights, offering managers a financially robust tool to strategically select improvement projects and allocate resources to initiatives with the highest return.