Does anyone have general best practice (rule of thumb) information on a typical quality budget in a company that designs and builds hardware within the defense industry (in terms of % of company revenue)? Saving Changes...
I am focused on the budget required to maintain a Quality Management System (QMS) at companies supporting the defense industry. Our quality staff are split into two categories, those supporting programs and direct charging those programs for that quality work and those charging overhead to maintaining our QMS (which is used by all programs and therefore overhead). I am interested in benchmarking the overhead budget. I am thinking that it would be in the range of 0.5 to 1% of total revenue. Anyone have some data points? Saving Changes...
The types of projects in the defense industry are so diverse that I doubt any general data points would be helpful. The quality organization itself is only one part of Total Cost of Quality.
Quality is often embedded in other organizations like Engineering, Tooling, Manufacturing etc. You would need to define what is under a central organization vs. distributed. A boot is not a tank nor a spy satellite, so standards of quality are very dissimilar. How much is built in-house vs. purchased equipment? Is the QMS mature or new. Is the hardware exclusively military or dual use? How modern is the production facility? These and many other questions can swing the numbers considerably.
As for organizational heuristics, it will be larger than your PM budget, but a fraction of your manufacturing budget. If I had to take a SWAG, I'd put it at about 5-20% of the manufacturing headcount, then scaled by the burdened labor rate to find the staffing cost by itself for direct charging. Indirect charging to maintain documents and such is probably less than 10% of the total budget for staffing all projects since that is typically part of a core organization rather than a side job for quality inspectors. br type="_moz" Saving Changes...
