Defects – any product or service characteristic that falls outside of the range of acceptance for the end user. In this series titled “The 8 Lean Wastes and Their Potentially Disastrous Effects”, we examine a case study for when companies or entire industries have allowed a specific type of waste to escalate to a disastrous effect. In this post, we review the waste of Defects to understand what causes it, how to see it, and how to eliminate it. Webster dictionary defines a defect as “an imperfection that impairs worth or utility”.
The 8 Wastes and Their Potentially Disastrous Effects:
In 2007 Mattel issued a worldwide recall of roughly 19 million toys primarily due to 2 issues:
- 18.2M toys were recalled due to a poor design on Mattel’s part by including small and powerful magnetic components that would be very harmful if swallowed
- Mattel had outsourced the manufacturing of it’s Sarge from the movie Cars toys to a Chinese contractor who was using lead-based paint in the toys’ production. The amount of lead found in the toys exceeded acceptable levels and triggered a recall of about 436,000 toys
The costs for this massive recall amounted to roughly $30M and a significant loss in credibility that took years for the company to rebuild. Mattel is definitely a major player in the toy industry. Experts believe that if this type of thing can get by their tight quality control measures, there’s a good chance that many if not most other toy manufacturers also include dangerous parts and lead-based material.
The response to this issues was to move as much manufacturing as possible back into their own facilities (in-sourcing) and implement more frequent quality checks on internal and external production processes.
An interesting fact in this case is that the owner of Lee Der, the Chinese contractor who was applying the lead-based paint to some of Mattel’s toys, committed suicide by hanging himself in the factory warehouse soon after this discovery was made.
For more details on this case study, check out the New York Times article at the following link:
Defect waste occurs everyday in factories around the world. As part of a robust Continuous Improvement initiative such as Lean Six Sigma, there needs to be a deliberate effort to eliminate or minimize defect waste. The focus of the Quality function in most companies is to do exactly this. However, most companies do not realize that quality control is a critical element of a Lean or Continuous improvement initiative; and thus treat these as two separate functions. In fact, quality loss, or yield loss, should be considered in any measure of productivity. It should be viewed as though a unit that isn’t produced correctly was not produced at all; and is thus a wasted opportunity to produce a good unit. One of the best metrics to use for measuring productivity is Operational Equipment Effectiveness (OEE), which considers yield loss a production efficiency loss.
The best way to apply OEE is using the Factory Operating System (fOS) at www.factoryoperatingsystem.com. This is a free web-based tool that makes improving yield and other efficiency losses much easier by simplifying tracking and automating the calculation and reporting functions of an OEE implementation. It also includes functions to drive bottom-up motivation around getting better everyday by sharing success stories and best-practices across your manufacturing network.
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