What a Defect Costs, Decided by Where It Was Found

How to read this sheet

The headline is a ceiling and not a forecast. It prices the same faults found one stage sooner, and says nothing about whether an inspection placed there would find them - detection effectiveness is an empirical property of a method against a fault type, is very often below one half, and any figure invented for it here would turn an honest bound into a confident guess. Halve the number before taking it to a capital request, and measure the real rate on a trial. Row order is the model: the sheet reads the row above as the stage upstream, so a table entered out of sequence produces a wrong answer with no warning. Value at stage is the accumulated cost of a unit and must be in the same unit throughout, which is the trap when a chain moves from kilograms of yarn to metres of cloth to pieces - convert to one basis before entering, or the ladder compares quantities that are not the same thing. The value of a defect reaching the customer is entered as the unit value only, which understates it in every business where a claim carries administration, an audit, a discount on the next order or the loss of the account; those belong in that row and are yours to add. The ratio of inspection spend to failure spend is a description and not a score: inspection is a large part of the reason the failure cost is small, so a chain spending three times more finding than failing has not necessarily over-inspected - it may simply be working, and the way to find out is to reduce a check and measure what arrives downstream rather than to read this line as waste. Defects found are counted, not estimated, so the sheet knows nothing about what escaped every stage including the last - the true rate is always higher than a detection table can show, and a chain that looks clean because nobody inspects is the one case this cannot distinguish from a chain that is clean. Finally, moving inspection upstream has its own costs and consequences: earlier stages are often faster, wider and harder to inspect, and a fault that is invisible in greige and obvious after dyeing cannot be found earlier at any price.