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How do you define non-conformance in your manufacturing company?

Do you track only the finished goods or do you include WIP in your metric?

Answers

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I can interpret your question two ways: From a costing perspective, we have standards that we measure against in production, but variances sitting in WIP are marginally meaningful. When the production order is closed we can really evaluate what we did well or where we failed against the standard cost.

If your question is more around identifying accepted vs. failed product, we do this in the entire production process. Non-conforming product becomes waste. We measure waste as another performance metric.

Peggy Shimko
Title: Financial Analyst
Company: Agropur-US
(Financial Analyst, Agropur-US) |

Thanks Patrick. Your answer mirrored my thoughts as well. During a recent conversation with a VP of Finance, we discussed what constitutes non-conformance. I have over 12 years experience in Lean Manufacturing Organizations and we measured non-conformance outside of raw material coming in during the entire production process. I was surprised by this person's response and thought it would be a good topic for discussion.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

This is my take on your question....

Product excellence goes much further than finished goods and costs. Especially for products with very little tolerance or heavily regulated products (say food processing or cars), inferior quality parts/production will cost more than the product itself.

Just take cars as an example. Squeaks and rattles, a defective airbag or a defective ignition switch can cost more in recalls and brand damage in the long run.

Companies have made PRODUCT EXCELLENCE an obsession. And that translates to minimal production deviation tolerance and high quality levels.

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