Defect Rate (DR)

Defect Rate shows the share of units that did not pass the defined acceptance criteria. It helps you spot process instability, supplier issues, and training gaps. Track it by product, line, shift, and supplier to see where defects cluster and where to act first.

Key concepts you need to set first

Before you calculate, lock in these rules so your numbers stay consistent across time and teams.

• Population: Define what you are measuring against. Examples: all units produced, all units inspected at a specific gate, or all units shipped to customers.
• Counting rule: Count a unit as defective if it has at least one defect that meets your severity threshold. A unit with multiple defects still counts once in this metric.
• Severity thresholds: Most teams use critical, major, and minor categories. Decide which severities make a unit defective for this calculation.
• Rework policy: Decide if you count pre-rework failures, post-rework acceptance, or both. Many teams track first pass results and final results as separate views.
• Time window and lotting: Use clear windows like daily, weekly, or by lot number. Rolling windows help smooth spikes while still showing trend direction.
• In-process vs post-delivery: In-process captures what your quality gates catch. Post-delivery picks up what escaped and reached the customer.

What Defect Rate is and what it is not

• Defect Rate counts units that fail at least one requirement. It answers: out of all units checked, what percent were defective.
• Defects Per Unit (DPU) counts total defects divided by units and can exceed 1 when units carry multiple defects.
• Defects Per Million Opportunities (DPMO) uses defect opportunities per unit. It is useful for Six Sigma studies and complex assemblies with many features.
• First Pass Yield (FPY) or Throughput Yield focuses on units that pass without rework. Pairing FPY with Defect Rate gives you a clearer picture of scrap, rework, and escapes.

Use each metric for its job. For day to day line management and external reporting, percent defective is simple and easy to compare. For deep process analysis, DPU and DPMO help you see density and opportunity complexity.

Why it matters

• Cost: Defects increase scrap, rework, overtime, and freight. Post-delivery defects raise warranty costs and hurt margins.
• Capacity: Time spent fixing bad units displaces throughput you could ship.
• Customer trust: A low escape rate reduces returns and complaints, which protects renewal and referral revenue.
• Compliance: Many industries must report quality levels to regulators and customers.

Practical ways to segment

Segmenting turns a single percentage into a map you can act on.

• By where it happened: plant, line, cell, station, process step
• By when: shift, lot, supplier lot date, tool change
• By what: product family, SKU, revision, configuration, material batch
• By who or which asset: operator team, machine ID, cavity, mold
• By supplier: vendor, part number, incoming inspection lot
• By customer: account, region, distribution channel for post-delivery defects

Data sources and preparation

• Sources: Manufacturing execution system, quality inspection logs, statistical process control system, ERP, warehouse management, customer returns and RMA system, service desk.
• Data you need: unique unit identifier or lot, inspection outcome or defect flag, defect severity, process step, timestamps, product and supplier attributes, shipped quantity for customer views.
• Data hygiene tips:

Targets and expectations

Targets depend on product complexity, regulatory requirements, and customer tolerance. High risk products often target near zero escapes. High mix, low volume environments may accept a slightly higher in-process rate with strong containment and quick rework. Set tiered targets: in-process gates, final outgoing quality, and customer-reported defects. Judge success on trend, stability, and escapes, not a single week.

Common pitfalls and how to avoid them

• Mixed denominators: Do not compare a line using units inspected with a line using units produced. Standardize the population.
• Counting multiple times: A unit that fails at two steps should still be one defective unit for this metric. Use DPU for multiple defects per unit.
• Hiding escapes: Only reporting in-process rates can mask customer returns. Track post-delivery defects separately and together.
• Rework confusion: Be explicit about first pass view versus final view. Publish both.
• Small sample noise: Low volumes produce jumpy percentages. Use control charts or longer windows and add counts next to the percentage.

How teams use this metric

• Daily operations: Leaders review yesterday's percent defective by line and product, then assign short investigations to the top drivers.
• Supplier management: Quality engineers track incoming percent defective by vendor and lot to trigger containment and corrective actions.
• New product introduction: During ramp, track defect rate by revision to confirm that changes are raising first pass yield and cutting rework.
• Customer health: Track post-delivery defect rate and warranty claims to quantify escapes and protect service levels.