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Friday, January 18, 2008

Lean manufacturing and defects

Lean manufacturing is about eliminating non value added activities from the system. Defects are one of the most important waste categories identified in lean. Every defective product or a poor quality service costs the organization more than we think. It costs the organization money, time and other resources and importantly the reputation of the organization.

Actually it is interesting to study the steps involved in making and correcting a mistake. First the organization will make the defective product. This takes time and money. Then the organization identifies that there is a problem. This involves checking and related costs. Then we have to find the ways of correcting error. This again costs you in terms of money and time. Then we have to redo the product without errors. So we spend three times of resources in the process of making and correcting errors. But if the defective product reaches the customer the damage will be irreversible. Not only you are going to loose the customer who purchased the product, unsatisfied customers can stop other from coming to you. In the worst case you might have to face legal problems.

Most of the organizations work on the concept of AQL. They accept some degree of defects based on the lost size and the quality standard maintained. But as a lean thinker I do not like the concept of AQL. As lean manufacturing propose the quality should be inbuilt. Quality check is not the answer. Let’s say we are following a very high quality rating and we allow only 0.5% possibility of having a defect in a lot of 200. If we rephrase this, we can pass 1 defective piece of products to the customer for every 200 pieces we ship. Isn’t that scary? Although we ship them in bulk the user is not going to buy in bulk most of the times. If the customer buys 1 piece and if he found that to be defective they will never return to you.

In services and offices defects can not be easily identified. But you can easily get an idea by looking at the end customer. If they are not happy you are not providing a good service to them.

In the software development context, defective products are software which does not function as intended. In the systems which are vastly automated and integrated a defective piece of software can create unimaginably large losses to the user.

Application of lean concepts must ideally create a process where all the possibilities of having a defect are eliminated. Quality is inbuilt to the system hence there will not be any requirement to check the products specifically for the defects. Tools used in lean like JIT, KanBan and PokaYoke (mistake proofing) will make sure the system is not going to manufacture defective products.

Defects are identified as a result than a cause in lean manufacturing. Amount of defects is a good indicator which indicates the degree of imperfection in the system.

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