Product defect

Last updated

A product defect is any characteristic of a product which hinders its usability for the purpose for which it was designed and manufactured.

Contents

Product defects arise most prominently in legal contexts regarding product safety, where the term is applied to "anything that renders the product not reasonably safe". [1] The field of law that addresses injuries caused by defective products is called product liability .

A wide range of circumstances can render a product defective. The product may have a design defect or design flaw, resulting from the product having been poorly designed or tested, so that the design itself yields a product that can not perform its desired function. Even if the design is correct, the product may have a manufacturing defect if it was incorrectly manufactured, for example if the wrong materials are used. A product may also be considered legally defective if it lacks appropriate instructions for its use, or appropriate warnings of dangers accompanying normal use or misuse of the product. [1]

Depending on the given jurisdiction, the failure of a consumer to read the available warnings may negate causation for purposes of a defective or inadequate warning claim in a product liability suit.

A product that is defective in some way that does not render it dangerous might still be sold, with a discounted price reflecting the defect. For example, where a clothing manufacturer's inspection discovers that a line of shirts have been made with slightly uneven sleeves, the manufacturer may choose to sell these shirts at a discount, often through an outlet store and with the label cut off to indicate that the quality is not intended to reflect on the brand. [2] For some products, rework is appropriate.

Product quality risk in supply chain

Product quality risk in supply chain focuses on the quality problems in the supply chain context rather in the manufacturing quality context. Tse and Tan (2009) [3] identified the concept of "Product Quality Risk in Supply Chain" (PQR) as:

Inherent quality problems (i.e. raw materials / ingredients / production / logistics / packaging) in any of the supply members trigger a domino effect that spread through a multi-tier supply network. For this reason, it is hard for a network member to keep track of who did what, and when, to the final quality of the products. The product that a focal firm sells to the consumer comprises components made by the focal firm and the suppliers. When the product breaks down due to defects in either the firm’s component or the supplier’s component, the firm has to bear the consequences.

In practice

Product quality risk is an inherent part of the supply chain risks, with a tendency to comprise some or all of the risk elements, such as operational risk, disruption risk and reputational risk. For example, when lead was found in Mattel's toys, it tarnished the company's reputation, and disrupted the supply of its products in the market.[ citation needed ]

In the literature, the concept of product quality risk has not been fully investigated. Although Zsidisin stated that quality risk includes the risk of producing unsafe products that can harm the consumer, [4] even when these defects are caused by another firm or inherited from a sub-contractor. However, neither PQR nor its domino effect in the supply chain have been thoroughly studied.

The product quality risk in global supply chain concept, though similar to "product harm crisis" (defined as defective or dangerous products) [5] and "moral hazard problem" (defined as the outcome of asymmetric information, imperfect observability in supplier's quality), [6] are not about the risk of product quality in a global supply chain context.

In construction

In construction, defects include aspects of the constructed works which are not in accordance with the scope of the project (the work which the contractor was asked to undertake) or, where the contractor has designed the work, the construction not compliant with any applicable law or with a design for the work offered by the contractor and accepted by the client or on the client's behalf. They may be "patent defects", observable in practice during or on completion of the construction process, or "latent defects", which are not visible or identifiable until a later date. [7]

Under common law, a defect which results from the contractor's breach of contract should be put right by the client, who then sues the contractor for the costs of doing so. The NEC Engineering and Construction contract, a standard form of contract widely used in the construction industry, allows the contractor to rectify a defect at their own expense in place of the common law position, and obliges the client to allow the contractor appropriate access to undertake the rectification work. [8] At the end of an agreed period, a defects certificate may be issued, which is intended either to certify that there are no patent defects, or to state any defects which remain outstanding. [9]

See also

Related Research Articles

Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. Although the word "product" has broad connotations, product liability as an area of law is traditionally limited to products in the form of tangible personal property.

<span class="mw-page-title-main">Supply chain management</span> Management of the flow of goods and services

In commerce, supply chain management (SCM) deals with a system of procurement, operations management, logistics and marketing channels, through which raw materials can be developed into finished products and delivered to their end customers. A more narrow definition of supply chain management is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally". This can include the movement and storage of raw materials, work-in-process inventory, finished goods, and end to end order fulfilment from the point of origin to the point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.

Six Sigma (6σ) is a set of techniques and tools for process improvement. It was introduced by American engineer Bill Smith while working at Motorola in 1986.

In sales, commerce and economics, a customer is the recipient of a good, service, product or an idea, obtained from a seller, vendor or supplier via a financial transaction or an exchange for money or some other valuable consideration.

<span class="mw-page-title-main">Distribution (marketing)</span> Making products available to customers

Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.

A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of value to an end customer. The concept comes from the field of business management and was first described by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.

The idea of [Porter's Value Chain] is based on the process view of organizations, the idea of seeing a manufacturing organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources – money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits.

Purchasing is the procurement process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations.

A duty to warn is a concept that arises in the law of torts in a number of circumstances, indicating that a party will be held liable for injuries caused to another, where the party had the opportunity to warn the other of a hazard and failed to do so.

A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products. It is a form of outsourcing. A contract manufacturer performing packaging operations is called copacker or a contract packager. Brand name companies focus on product innovation, design and sales, while the manufacturing takes place in independent factories.

Military supply-chain management is a cross-functional approach to procuring, producing and delivering products and services for military materiel applications. Military supply chain management includes sub-suppliers, suppliers, internal information and funds flow.

<span class="mw-page-title-main">Build to order</span> Production approach

Build to Order is a production approach where products are not built until a confirmed order for products is received. Thus, the end consumer determines the time and number of produced products. The ordered product is customized, meeting the design requirements of an individual, organization or business. Such production orders can be generated manually, or through inventory/production management programs. BTO is the oldest style of order fulfillment and is the most appropriate approach used for highly customized or low volume products. Industries with expensive inventory use this production approach. Moreover, "Made to order" products are common in the food service industry, such as at restaurants.

Quality engineering is the discipline of engineering concerned with the principles and practice of product and service quality assurance and control. In software development, it is the management, development, operation and maintenance of IT systems and enterprise architectures with a high quality standard.

<span class="mw-page-title-main">Vendor</span> Supplier of goods or services

In a supply chain, a vendor, supplier, provider or a seller, is an enterprise that contributes goods or services. Generally, a supply chain vendor manufactures inventory/stock items and sells them to the next link in the chain. Today, these terms refer to a supplier of any goods or service.

Irish law on product liability was for most of its history based solely on negligence. With the Liability for Defective Products Act, 1991 it has now also the benefit of a statutory, strict liability regime.

<span class="mw-page-title-main">Consumer Protection Act 1987</span> United Kingdom legislation

The Consumer Protection Act 1987 is an Act of the Parliament of the United Kingdom which made important changes to the consumer law of the United Kingdom. Part 1 implemented European Community (EC) Directive 85/374/EEC, the product liability directive, by introducing a regime of strict liability for damage arising from defective products. Part 2 created government powers to regulate the safety of consumer products through Statutory Instruments. Part 3 defined a criminal offence of giving a misleading price indication.

The Liability for Defective Products Act 1991 is an Act of the Oireachtas that augmented Irish law on product liability formerly based solely on negligence. It introduced a strict liability regime for defective products, implementing Council of the European Union Directive 85/374/EEC.

<span class="mw-page-title-main">Supply chain risk management</span> Preventing failures in logistics

Supply chain risk management (SCRM) is "the implementation of strategies to manage both everyday and exceptional risks along the supply chain based on continuous risk assessment with the objective of reducing vulnerability and ensuring continuity".

Supply-chain sustainability is the impact a company’s supply chain can make in promoting human rights, fair labor practices, environmental progress and anti-corruption policies. There is a growing need for integrating sustainable choices into supply-chain management. An increasing concern for sustainability is transforming how companies approach business. Whether motivated by their customers, corporate values or business opportunity, traditional priorities such as quality, efficiency and cost regularly compete for attention with concerns such as working conditions and environmental impact. A sustainable supply chain seizes value chain opportunities and offers significant competitive advantages for early adopters and process innovators.

The Strategic Forum for Construction is a United Kingdom construction industry organisation established in 2001 as the principal point of liaison between UK government and the major construction membership organisations. It also enables different representatives of the UK industry to discuss strategic issues facing construction and to develop joint strategies for industry improvement.

Retainage is a portion of the agreed upon contract price deliberately withheld until the work is complete to assure that contractor or subcontractor will satisfy its obligations and complete a construction project. A retention is money withheld by one party in a contract to act as security against incomplete or defective works. They have their origin in the British construction industry Railway Mania of the 1840s but are now common across the industry, featuring in the majority of construction contracts. A typical retention rate is 5% of which half is released at completion and half at the end of the defects liability period. There has been criticism of the practice for leading to uncertainty on payment dates, increasing tensions between parties and putting monies at risk in cases of insolvency. There have been several proposals to replace the practice with alternative systems.

References

  1. 1 2 Robinson, Patricia A. (2009). Writing and Designing Manuals and Warnings. p. 234.
  2. ↑ Shell, Ellen Ruppel (2009). Cheap: The High Cost of Discount Culture. p. 104. ISBN   9781101135471. You will recall the original factory outlet concept was defined by slightly defective but perfectly usable goods sold directly to consumers straight from the factory store. Today this is a rarity.
  3. ↑ Tse, Ying Kei; Tan, Kim Hua (2011). "Managing product quality risk in a multi-tier global supply chain". International Journal of Production Research. 49: 139–158. doi:10.1080/00207543.2010.508942. S2CID   110472062.
  4. ↑ Zsidisin, George A. (2003). "Managerial Perceptions of Supply Risk". The Journal of Supply Chain Management. 39: 14–26. doi:10.1111/j.1745-493X.2003.tb00146.x.
  5. ↑ Dawar, Niraj; Pillutla, Madan M. (2000). "Impact of Product-Harm Crises on Brand Equity: The Moderating Role of Consumer Expectations". Journal of Marketing Research. 37 (2): 215–226. doi:10.1509/jmkr.37.2.215.18729. S2CID   167532080.
  6. ↑ Hwang, Iny; Radhakrishnan, Sarvepalli (2006). "Vendor Certification and Appraisal: Implications for Supplier Quality". Management Science. 52 (10): 1472–1482. doi:10.1287/mnsc.1060.0557.
  7. ↑ Simmons & Simmons LLP, Guide to construction defects, published 10 October 2017, accessed 29 April 2023.
  8. ↑ Evans, S., When is a defect not a Defect under NEC3?, accessed 8 May 2023.
  9. ↑ Designing Buildings Wiki, Defects certificate, last updated 30 September 2020, accessed 8 May 2023.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.