Meaning
Production runs occasionally yield units that fall outside the parameters defined in the technical specification. Nonconforming output is any material, component or finished good that does not meet the requirements set forth in the contract or the engineering drawing. It is the raw material of the quality management system, representing the errors that must be identified, isolated and resolved.
This term covers everything from minor cosmetic flaws to major functional failures.
Material Status
Identifying a piece of work as non-conforming changes its legal and physical status within the factory. It can no longer be mixed with good inventory or shipped to the customer without a formal waiver. Under quality standards like ISO 9001, nonconforming output must be clearly labeled and moved to a secure area.
This prevents the accidental use of bad parts in a final assembly, which could lead to much larger failures.
Handling Procedure
Once a part is flagged, the quality team must decide whether to scrap it, rework it or accept it as-is through a concession. Managing nonconforming output requires a formal decision making process involving both engineering and procurement. If the flaw is minor and does not affect safety, the buyer might agree to take the goods at a discount.
If the flaw is critical, the parts must be destroyed to ensure they never enter the market.
Financial Loss
Every unit of rejected work represents a waste of raw material, labor and energy. Tracking the rate of nonconforming output is the most direct way to measure the efficiency of a manufacturing line. High rates of failure drive up the cost per unit and can lead to missed delivery dates and lost contracts.
Reducing this waste is the primary goal of lean manufacturing and six sigma programs.