Prevention costs are one of the four elements of cost of quality. When implement and tracking a cost of quality system within a company, management typically focuses on internal and external failure costs. Management studies the costs due to defects and not the cost to prevent the defects. Costs of prevention focuses on the actions taken to prevent the creation of defects. Companies that pursue operation excellence track these costs
and purposely alllocate money to this element. These companies spend more on prevention methods than the other quality cost elements. Here are examples of these costs:
This includes the broad array of activities which collectively create the overall quality plan and the numerous specialized plans. It includes also the preparation of procedures needed to communicate these plans to all concerned.
This inlcudes design review, reliability engineering, risk assessment, FMEA, Design of Experiements and other quality-related activities associated with the launching of new design.
Process capability studies, inspection planning, and other activities associated with the manufacturing and service processes.
In-process inspection and test to determine the status of the process (rather than for product acceptance). This includes SPC, Anova Studies and guardbanding.
Evaluating the execution of activities in the overall quality plan. Read more on Quality Audits here.
Supplier quality evaluation:
Evaluating supplier quality activities prior to supplier selection,
and auditing the activities during the contract
Preparing and conducting
quality-related training programs. Conducting training on company procedures, specification and inspection activities.
After reading this on prevention costs, see this for other Quality Costs.