Lesley Wright on the cost of defects

Lesley Wright

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In an earlier article, I considered the definition of quality in lean terms as "doing the right thing right first time, every time, at a price the customer can afford - this means a process without any defects".

One form of waste identified in lean process improvement is the waste of "defects": using resources to produce errors.

Some consider a process without any defects impossible and might be satisfied with setting a goal of 95 per cent. This sounds quite an achievement until you consider the impact on the customer. And in real terms, achieving 99.9 per cent in quality would mean:

• 30,000 letters lost by Royal Mail every day;

• 5,000 unnecessary hospital operations every year in England;

• 5,000 cheques processed to wrong banks every hour;

• five aeroplane crashes every day in the UK;

• one hour without electricity per month.

British Airways tops the league table for the number of bags missing, at 23 per 1,000 passengers. It is impossible to calculate the cost in terms of customer anger when the impact of lost baggage has left you without suitable clothing for a business meeting.

For each customer, such a loss is a defect and, to add insult to injury, the cost is borne by them. But how many people realise this? As airlines generate income from ticket sales, locating the lost bag and returning it is built in to the ticket price. How many tickets are issued with the warning, "cost of finding lost luggage £10"?

Defects in healthcare also cost money: in staff time, patients having to wait and managing risks. Do we count the cost? What is the cost of cancelling an admission because of lack of beds, booking additional clinical appointments because results were unavailable, or providing insufficient information to book a test? Count the cost of the time spent on booking admissions and appointments, filing patients' notes, calls to staff requesting additional patient details, and time on the phone managing the process. Consider the impact for patients: taking time off work, the self-employed losing a day's pay and the worry of incurring infections.

Staff costs are the single greatest concern on any manager's budget statement. As managers we need to consider what percentage of our staff costs are given to managing defects.

For example, how many are in our processes, how do we measure them, how do we cost them?

What would the line on the budget statement read? Cost of defects = £100,000? Would this focus our minds?

Defects carry significant risk to patients and their safety needs to be paramount.

Processes should be designed to help staff understand what is "defect free", with clear specifications and clearly understood methods of addressing defects in a culture that supports problem solving and in which staff feel empowered to stop the process if necessary.

As taxpayers we want value for money, as patients we want a defect-free process.