Abstract
Higher education quality costs are escalating daily and the cost of poor quality is becoming excessive. The higher education department has indicated that inefficiencies within the higher education environment are affecting the performance and the return of investments. This research uses 2011 and 2012 records retrieved on Industrial Engineering department from the Management Information System unit of Tshwane University of Technology, Pretoria, South Africa. It focuses on how cost of poor quality can be categorized within higher education environment, and identifies methods which can be used to minimize these costs with the purpose of improving the performance and return of investments. The paper established the cost of poor quality for the department using the teaching input grant, teaching output grant, research output grant, and institutional factor grants, teaching input unit, students' full credit load and among other factors. The results of this research indicated that USD94,3166.24 and USD933,431.92 were lost for the year 2011 and 2012 respectively on just one department and affirmed that failure cost and preventative costs are the main costs associated with higher education inefficiencies and shortfalls. Thus, application of lean enterprise or lean six sigma tools is recommended to salvage the situation.