Interested in a free 25+ eBook on the 7 Wastes? Please DOWNLOAD HERE.
There is wisdom in the definition of Six Sigma, which is 3.4 defects per one million opportunities (DPMO), allowing for a 1.5 Sigma shift. But, some companies subscribe to sloganeering such as “Zero Defects”. The “Zero Defects” sloganeering is counterproductive, unhelpful, statistically impossible, and completely cost prohibitive.
Statistically, zero defects means a defect level of infinity sigma, which is not possible. What most people mean, is an attitude toward process improvement, but the sloganeering gets in the way.
Are All Defects The Same?
The “Zero Defects” movement has an implicit assumption that all defects are equal. This is not true. In fact, for most firms and products, defects must be identified and prioritized, and attacked and treated from most important to least important. For the defects at the bottom of that prioritized list, it might even make sense to move on and not eliminate or reduce those. The point here is an attitude toward perfection, but fully understanding that perfection is not possible. The attitude and efforts are valuable and the customer will feel and appreciate it. Shareholders will benefit, and the firm will be better for it.
Types of Costs
There are three types of costs that comprise the cost of quality: Appraisal, Preventative, and Failure costs.
 |
|
|---|---|
 |
 |
Appraisal Costs
The costs in this category includes any and all activities in identifying and assessing for errors or defects in products. For example, testing is an activity that falls in this category; a department that might fall in this category is the Quality Assurance department — this department’s burden would fall under the Appraisal Costs category.
Preventative Costs
The activities that fall under this cost category are training, and any and all activities the encourage prevention or discourages introduction of defects. Establishing processes, procedures, and systems prior to the product being built is typically found in this category. Money spent in this category is money well-spent!
Failure Costs
Failure costs can be both Internal and External. Internal Failure Costs can be money spent to fix defects caught within the firm. For a software firm, money spent on fixing bugs caught prior to shipping a product can fall in the internal failure costs category. For External Failure Costs, these are activities that involve refunds, complaints, call center functions (not outbound sales, but inbound complaints), concessions to the customer for poor service, and warrantees.
Zero Defects and Costs
I present below what I believe to be the relationship between costs and defects:
On the X-axis, we see the costs category (just use a dollar multiplier for the X tick marks). On the Y-axis, we see defects, by count. So, we see that as defects approach zero, costs increases exponentially and hovers asymptotically on the x-axis, and never reaches zero.
Footnote: The costs to a firm where there is no effort to identify and reduce errors or defects can also be exponential. For example, imagine a firm where there was no inspection, appraisal, or prevention of faulty, defective, or harmful medical devices or drugs. The external failure costs alone could bring the firm to bankruptcy. I recognize this fact, but wanted to make a point above regarding zero defects.
Why is the above Graph True?
As defects are identified and eliminated, there will be theoretically few defects. But, this means that identifying defects will require more effort and will become more and more difficult, thus increasing the costs of this activity, along with the subsequent costs to fix the defects identified: The costs to inspect and test increases as there are fewer and fewer defects.
Conclusion
Sloganeering doesn’t help, especially if the slogan makes no sense. “Zero Defects” as a mantra has a nice cumbaya ring to it, but doesn’t really help or motivate a crew to do better. Moreover, “Zero Defects” is statistically impossible as well as cost prohibitive.
Regarding defects: not all defects are equal. It is important to identify the defects that impact the customer, prioritize those, then respond in a prudent way in improving the product or process. Going after all defects is not prudent.
The key takeaway here is the following: strive to be better everyday; strive to make the customer happy. The Firm’s efforts to make the customer happy will be felt, a culture of improvement will be created, and the firm and shareholders will benefit from it.
search terms for this article:
zero defects, zero defect theory, zero defect process, toyota zero defects, zero defects theory, appraisal and zero defect, zero defects 7 waste, process to create zero defects, zero defects in manufacturing or service process, Zero defect system, theory of zero defect \lean\, Zero Defect Quality inspection, zero-defect process control, zero defects process, zero defect approach, zero-defect attitude, zero defect movement, zero defect procedures, zero defect METHOD, zero defect lean production, zero defect in six sigma, what is zero defects in production, zero defect for lean, Zero defect approach method, Zero defect health care quality programs, zero defect processes, zero tolerance to defects, zero quality complaint, zero defects toyota production system, zero defects pull process, zero defects methodology by six sigma, deming zero defects, zero defects in manufacturing or service processes, zero defects impossible, zero defects demming, zero defect zero waste, zero defect theory *doc, zero defects in toyota, zero defect product, what is zero defect production by e deming, what is zero -defects, WHAT IS QUALITY COST AT ZERO DEFECT, is it possible to achieve zero defects in manufacturing or service processes?, is it possible to achieve zero defects in manufacturing, installation of toyota zero defects, identifying zero defect, how would you use Six methods to reduce defects in health care settings, how to obtain zero defects, how to achieve zero defect in the process, eetindia com zero defect approach, defects of lean management, defect prevention devices, articles related to zero defect theory, article on zero defects policy, achieve zero defects in manufacturing or service processes, 6 sigma vs zero defects, 6 sigma & zero defect, is it possible to achieve zero defects in manufacturing?, is zero defect is possible how, is zero defects possible?, نظرية الزيرو ديفيكت, toyota has produced zero defects, toyota and zero defect concept, toyota 0 defect, taguichi 7waste in lean manufacturig, six sigma zero defect quality, six sigma and zero defects, reduce defects with lean, process of zero defects, Pete abila backcountry, pete abila, lean six sigma zero defects, lean manufacturing\s zero defect policy, lean manufacturing zero defects, lean defect, 10-100-1000 cost to eliminate defectsRelated Articles:
 |
 |
 |
||
This post was written by Pete Abilla | ||||
How To Be A Human 
Six Sigma Workbook For Dummies — The Raffle 
The Apple iPhone Supply Chain 
Jeff Bezos and Root Cause Analysis 
The Toyota A3 Report 
A Mindless Worker is a Happy Worker 
Ask Mary Poppendieck Anything! 
A Lean Case Interview 
Batch-and-Queue or Single-Piece Flow 
Multi-Tasking Leads to Lower Productivity 
queueing theory: part 1 
Zero Defects is Wrong Approach 
Overmanaged and Underled 
Pull Systems, Push Systems: The Paper Airplane Game 
Queueing, Disneyland, and FastPass 
Operational Excellence is not a Substitute for Effective Leadership or a Good Strategy 
Law of Instinct 
Ask Gretchen Rubin: The Happiness Interview 
Taiichi Ohno: Teach Others to Think for Themselves 
Zipcar Customer Experience: Variability, Utilization, and Queueing 
Too Many Cooks in the Kitchen 
Colin Powell on Leadership 
Visual Management and Self-Reliance 
Process Control and Luck 
Poka Yoke Example: Prevent Error Through Embarrassment and Humiliation 
queueing theory: part 2+ 
Queueing Theory: Part 3 
Emergency Room (ER) Wait Times 
Quality and Continuous Improvement; 
{ 8 comments… read them below or add one }
I had the pleasure of working at a company that tried to enforce a ‘zero tolerance’ stance on software and editorial defects.
I certainly will never institute such a policy at my current employer for our developers. To work towards approaching zero (regardless of whether that number is 10, 100, 1000 or whatever is right for the resources you have at hand and the value it delivers to the business) is a much better approach in practice.
It wont surprise you that my previous employer is no longer operating…
I blogged the following recently on this topic (http://tinyurl.com/2df4tl):
Fundamentally, it needs to be appreciated that there is a difference between reducing defects and eliminating them. The cost of trying to support zero defects goes up exponentially as you get closer to zero. Deming used the red bead experiment to highlight that if a process has a failure rate built into it from the beginning, worker competence is not the issue. It really is all about management.
Rob
I think there’s a difference between “zero tolerance” and a goal of “zero defects.” Zero tolerance is a dumb policy if you’re going to be overly punitive and point fingers (or fire people) every time a mistake is made. We’re human. The Toyota Production System recognizes this.
The goal of zero defects can be achieved through Error Proofing devices or methods. The most clever error proofing methods are inexpensive — think things like a template bar that prevents a too-tall vehicle from driving into a parking garage when it wouldn’t have fit. Error Proofing methods are more cost effective than traditional defect prevention methods, such as inspection or telling employees to “be careful or you’re fired.”
@Mark,
Poka-Yoke is absoutely the way to go for newly-created processes, or as an solution for already-created processes but are producing defects. For mature firms, however, there exists processes, methods, tribal knowledge, and culture, that need help. Yes, prevent errors through mistake-proofing; for processes that have already been engineered but are producing defective products — that was really the point of this article.
Poka-Yoke can also be applied to existing processes, and not just in manufacturing. You can apply poka-yoke to business processes, as well.
Peter’s graph is precisely why the founders of the Toyota Production System emphasized built-in quality (jidoka). Arguably more important than error-proofing (pokayoke), built-in quality is the antidote to the futility of “quality by inspection”.
In the Lean community, I personally don’t feel the proper emphasis being given to built-in quality, and I’m not sure why.
The Taguchi Loss Function demonstrates that quality cannot be inspected in, but it can be controlled through robust design. Likewise, proper equipment design can catch quality defects and stop the process before they are passed on to the customer (or the next process).
Mark is absolutely right that you can error-proof any business process, but I’m more interested in why companies don’t emphasize DFx in process design like they do for product design.
Building quality into business processes is about the fundamentals — robust design and visual management (what makes any generic business process stop when quality is unacceptable).
Your post completely ignores the fact that if you could achieve Zero Defects the process would be not only faster, but immensely cheaper!
Also, in your cost graph you do not account (at all) for the cost of leaving the defects in the product. That cost would be much higher when the number of defects is higher (assuming the same distribution between trivial/critical defects)
Here’s my full argument as to why aiming for Zero Defects is not only good, it’s the only way to survive long term: http://bit.ly/15lkle
This is not true. this has been achieved by ignoring the customer complaint and forcing Toyota’s bad products on to the customers.
Toyota Etios common Problems faced by owner of Toyota Etios model-V.
I would once again like to mention my problems as follows-
1) Engine Vibration at Idle/ Neutral position.
When the vehicle ignition is switched “ON” the vehicle shakes heavily and produces noise.
Secondly when the vehicle is “START” and the gear is Neutral/ idling condition – vehicle produces lot of vibration.This vibration is irritating and distracts attention for every moment spent in the Etios.The vibrations are so intense that the vibrations are felt in the driver and passenger seats, steering, side arm rest, roof top, tail ( boot space) of my etios.
2) Road Noise inside the cabin.
When the vehicle is moving on the road, great amount of sound from the tyre reaches the inside cabin of the car, which is very irritating while driving.This noise is heard even with window glass closed and AC switched ON.
3) Engine Noise inside the cabin.
The vehicle produces a lot of noise while accelerating. It sounds as if lot of lot of load has been put on the engine even with light load in the car (with 2 passengers inside the cabin). This noise is very distracting while driving.
4 ) Absence of Weather gaskets on all four Doors.
The absence of gasket makes it convenient for insects, cockroaches, ants, spiders and lizards to get inside the vehicle as soon as the door is opened. The interior area of the cabin trapped between the frame and door is always dirty even though the vehicle is cleaned from outside.
5) Jerks while driving
Less weight of the car makes it bouncy on road.The suspension is poor and the impact of the holes on road comes directly to the passsngers inside the car cabin. The ride is rough. The comfort part is missing from the vehicle.
6) Battery
The battery drains out completely in less than a weeks time of non usage of the vehicle. It has happened with me three times.
7) Paint
The pain quality is poor as it chips out and cracks out.
8.) Air conditioner
The Air Conditioner, when it is switched off produces bad smell inside the cabin.
9) Brakes
The brakes are ineffective and takes time to fully act on pedal press.
10) Transmission – Reverse Gear
On application of reverse gear the gears make jarring noise. This is very annoying. The transmission is very poorly designed which takes lot of effort to shift gears. One feels like fighting with every gear change.
11) Horn sounds more inside than outside
This is because of poor acoustic insulation in Etios that the sound of horn is heard more inside the passenger cabin than outside.
12) Pick up
The pickup is very low at any gear and even the new vehicle seems to be tired and exhausted.
13) Mileage
The actual mileage of ETIOS in city conditions is not more than 10 kilometer per litre in city conditions. The company claims it to be more than 17.5 kilometers per litre.
14) Interior
The interior plastic quality is very raw and gives a very cheap feeling. The interior plastic shade is also very irritating. The seats are also of very poor quality. The interior plastic has started making absurd noise because of excessive vibrations in the vehicle.
15) Stepney – Non Alloy wheel
The stepney- spare wheel supplied along with toyota etios model v is non alloy wheel where as all the other tyres are alloy wheels.
16) Remote unit for remote locking There is only one remote control unit supplied along with the vehicle.