It Stands for Quality. For some companies, the cost
to deliver a quality product can account for as much as
40 percent of the sales price. For a company whose
annual revenues are $100 million, and whose operating
income is $10 million, the cost of quality is approximately
25 percent of revenue, or $25 million. If that
company could reduce its cost of achieving quality by 20
percent, it could increase its operating income by $5 million
— or 50 percent of current operating income. No
wonder former Motorola CEO Bob Galvin was once
quoted as saying that leaders must take quality to a personal
level in order to create lasting improvements