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Defect Cost Tally Worksheet

A tally of defects by count alone can send you after the wrong problem. This worksheet records each defect type with a cost per defect, so you can see what actually costs money and take clean data to a Pareto review.

Download:

Defect type	Where found	Disposition	Qty	Cost per defect	Total cost
					$76
					$87
					$242
					$15
					$124

Total defects

Total defect cost

$544

Largest single cost line

$242

Average cost per defect

Largest line as share of total

44.5%

Sort the exported file by total cost, then build a Pareto chart. Frequency and cost often give different priorities: the most frequent defect is rarely the most expensive.

Cost of quality from your ERP data

Optional: see how scrap and rework transactions can feed a live cost-of-quality dashboard.

Optional. The tool and every export work without this. No spam.

How to use the tally

Add a row for each defect type and stage where it was found. Enter the quantity from your inspection records and a cost per defect that covers scrap value, rework labor, or return handling. The total cost column multiplies quantity by cost. The summary shows the average cost per defect and how much of the total the largest line represents. Export to Excel, sort by total cost, and draw a Pareto chart for your quality meeting.

Choosing a cost per defect

Keep it simple and defensible. For scrap, use material plus labor and machine cost spent up to the point of detection. For rework, use the labor and machine time of the repair plus reinspection. For return to vendor, include handling and freight, even if the supplier credits the part. Use the same method every period so trends mean something. Finance can usually give you a standard rate per hour for each work center.

Scrap: material plus cost added to that point
Rework: repair time, reinspection and any extra handling
Return to vendor: handling, freight and delay cost

Reading the result

Compare the ranking by quantity with the ranking by cost. In the example, burrs are the most frequent but cheap, while scratches and thread failures cost far more per piece. Pareto thinking says the top few failure modes cause most of the cost, so pick those for root cause work. Check where defects are found too: a defect caught at final costs more than the same defect caught at the first operation, which argues for earlier inspection.

Common mistakes

Lumping several causes under a vague type such as bad part makes the data useless. Using precise looking costs from guesses is another issue, state the basis in the notes. Do not drop small defects entirely, since high-volume cheap defects can add up. Finally, re-run the tally after corrective actions to confirm the cost really fell, instead of declaring victory when the action closes.

Frequently Asked Questions

What is a defect check sheet?

A check sheet is a structured form for counting defects by type as they occur. It is one of the basic quality tools. This worksheet extends it by attaching a cost per defect, so the data supports a Pareto analysis.

How do I build a Pareto chart from this?

Export to Excel, sort rows by total cost descending, add a cumulative percentage column and plot the costs as bars with the cumulative percentage as a line. The first few bars usually cover most of the cost.

Should I count defects or defective units?

Pick one and say which in your procedure. One unit can have several defects, so counts can exceed units. For cost, count what drives action, usually defective units for scrap and defects for rework time.

How often should I review the tally?

Weekly for production reviews and monthly for management, using the same defect categories each time. Keep a controlled list of defect types so inspectors do not invent new names.

If defect counts live in spreadsheets, Netray can help pull scrap and rework transactions from your ERP into a cost-of-quality view automatically.

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