Cost of Quality & Financial Impact Analysis

GlobalPack Industries • $840M Annual Revenue

CoQ % of Revenue

4.8%

+0.3% vs Q3

Prevention Cost

22%

Target: 35%

Appraisal Cost

31%

$12.5M Annual

Internal Failure

28%

$11.3M Annual

External Failure

19%

$7.7M Annual

Cost of Quality Trend by Category (8 Quarters)

Prevention Investment ROI Waterfall

Cost per Non-Conformance Event

Plant Cost of Quality Comparison & Benchmark Gap

Plant	Revenue ($M)	CoQ ($M)	CoQ %	Prevention %	External Fail %	Benchmark Gap
Atlanta	152	6.8	4.5%	24%	17%	+1.3%
Chicago	187	9.5	5.1%	19%	22%	+1.9%
Phoenix	134	5.6	4.2%	28%	15%	+1.0%
Seattle	121	5.2	4.3%	25%	18%	+1.1%
Toronto	143	6.4	4.5%	21%	20%	+1.3%
Mexico City	103	6.8	6.6%	16%	28%	+3.4%
Total / Avg	840	40.3	4.8%	22%	19%	+1.6%

Industry Median: 3.2% • Target: 3.5%

Chargeback & Customer Penalty Exposure

Revenue-Normalized CoQ Index

Internal vs External Failure Split

Internal: $11.3M • External: $7.7M

Appraisal Efficiency

Cost per Inspection $127

Test Coverage 87%

Catch Rate 73%

Industry Benchmark Gap

GlobalPack 4.8%

Industry Median 3.2%

Best-in-Class 2.1%

Gap to Target (3.5%)

+1.3%

$10.9M opportunity

CoQ Budget Overrun Alert

$3.2M

Q4 projected vs. budget

External failure costs trending 18% above forecast driven by e-commerce returns surge. SPC automation deployment delayed 6 weeks.

Prevention Initiative ROI Leaderboard

SPC Automation (Proposed) $2.1M avoided

Design FMEA Expansion $1.4M avoided

Supplier Quality Audits $0.9M avoided

Operator Training Program $0.7M avoided

GL Mapping Version: 2024.Q4 • Prevention (5100-5199), Appraisal (5200-5299), Internal Failure (5300-5399), External Failure (5400-5499)

Accrual Methodology: Warranty reserves use 24-month rolling claim rate; scrap valued at standard cost; rework includes direct labor + overhead burden; customer chargebacks recorded at invoice adjustment date.