
The Instantaneous Cost and Failure from Breakdowns is Huge. When a failure incident occurs, there is a consequential loss of profits and amassing of costs. The cost of failure includes lost profit, the cost of repair, fixed and variable operating costs wasted during the downtime, and a myriad of consequential costs that surge through the business. They are all paid for by the organisation and seen as poor financial performance. The costs of failure cannot be escaped and are counted in fortunes of lost profit per year. Total defect and failure true costs are not normally recognised by managers, yet they can send businesses bankrupt. In the instance of a failure, all its costs and losses are automatically incurred on the business. These costs can only be prevented by not having the failure in the first place. This article explains the ‘Instantaneous Cost of Failure’ (ICOF) and introduces a proactive technique, ‘Defect and Failure True Costing’, that helps companies recognise and prevent this tremendous waste of money.
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