Two Weeks Resolving a Defect, or...

It’s a conundrum that faces everyone who operates a manufacturing or service business: Most are unaware of the dire consequences of a defect reaching a customer until a process server hands them a lawsuit. By then it’s too late. Regardless of the outcome, the people and businesses will be permanently scarred and damaged.

Most of the more than 700 companies I’ve worked with during the last 50 years have robust customer service and warranty processes that never address the question: What might be the dire consequences of a defect reaching one of our customers?

During the last two decades, I’ve expanded my quality management consulting work to include consulting and testifying in products liability and organizational negligence cases. In more than 40 lawsuits, I’ve gathered empirical evidence which concludes that our fundamental tenets of quality management are seriously flawed. Our charter has been to minimize process variability and reduce defects to an acceptable level. Both canards are folly.

One case involved a common space heater causing a fire that killed an entire family. A poorly designed power switch and thermostat allowed carbon to build up between contacts. Eventually, the carbon emitted sparks that set the house on fire. When the judge allowed me to audit the manufacturing facility, it was apparent that this was a known defect. In the life-testing room, there were even scars of previous fires embedded in the floor.

The company assumed the risk that this defect could manifest but wouldn’t reach critical levels during the life of the heater. I found that they weren’t following their own manufacturing procedures, and that they weren’t conducting routine testing required by their UL safety listing. Their UL files contained multiple design changes that cheapened the switch to the point of creating a potential hazard. The company is now out of business after a very expensive judgment from the lawsuit.

I have a 96-percent success rate in proving that these defendant companies weren’t following their own procedures. If they were ISO 9001-certified, they weren’t compliant with the standard. In electrical products, UL safety testing was often compromised because UL has been overwhelmed with organizations marginalizing their required testing, which has created an untenable backlog of customer changes.

These data have created a call to action for the quality profession. We must re-examine our goals and standards to create a new vision. That vision must include the mandate that no defect ever reaches a customer, and that risk is avoidable. That requires process variability to be driven to near-zero, as well as controls in place that prevent nonconformities from moving from one work center to another. Done well, this will prevent defects from reaching customers.

Risk is avoidable. We have created extensive bureaucracies around risk management, and our mission must be to identify all foreseeable risk. Foreseeable risk is a legal term defined as “a danger that a reasonable person should anticipate as the result of their actions.” Redirecting our activities to making foreseeable risk our prime directive will scrap the overhead of risk management that leads to controlling acceptable risk instead of eliminating it.

Virtually all of us have potential lawsuits lurking as the results of our actions. Most of us are unaware of how devastating being a defendant is and will be for the rest of our lives. Learning process excellence and risk avoidance are the new paths to business success and self-indemnification.

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