Defects are the easiest Waste to spot. The trick to this Waste is spotting them before the product goes out your door, into the public eye. By the time you catch a Defect, the lost production cash is often the least of your worries. Loss to reputation, angry customers, and the cost of repairs all trump wasted productions costs. Often, the insult to injury is paying people to throw it away.
Layers of Expensive:
By the time you notice a Defect on a finished product, you’ve already put maximum resources into the product. Like Over-Inventory, that has the effect of freezing your cash into that product. Unlike Over-Inventory, you usually can’t just discount it to sell. You’ll need to put more money into repairs first.
Proactivity is the best defense. The earlier in the process you see a defect happening, whether through a bad part or sloppy process, the better. It becomes more expensive the farther in the process it goes.
Even an engaged manager can’t be on the production floor all the time. Defects happen everywhere, but whether they’re caught or missed depends on how many people are actively monitoring.
Your team needs to care about spotting Defects. They need to be engaged in the process improvement process. To be engaged, they need to know that they won’t be blamed or punished for Defects they point out, and they must want to help improve the company.
Talk to them about their ideas. Formal and scheduled are necessary, but also strive to create a rapport where you can chat informally, wherever you are, and they feel heard.
There’s no such thing as a non-competitive industry. If your product doesn’t meet customer expectations, your competition is an email away. It needs to be right.
Company brand and reputation takes a long time to build, but it can fall apart overnight. If the Defects pile up, even loyal customers will start to suspect that something is internally “off.”
If the Defect is safety related, you could have a recall on your hands. That’s when waste becomes exponential and downright dangerous. Audit how you inspect finished product before it leaves. Is it a visual inspection, or are you performing random checks? If you’re relying on people to check them, formalize that process. Make sure those responsible are trustworthy.
Defects can have crippling consequences. But often the very processes that we cut to save money, whether that’s redundant eyes on product or slightly lower-grade raw material, are the things that prevented them.
Before you cut a process, take a step back and ask why this process exists in the first place. It was made for a reason; trace it back to that reason. You may find that the extra spotter is there because defective widgets slipped through before.
Sometimes processes are around so long that their benefits get built in, forgotten, and become invisible. Then, when we get excited about process improvement, we cut them. Be vigilant to prevent cutting necessary processes.