A Step-by-step Guide To Solving Out-Of-Spec Product In Food Businesses

When it comes to out-of-specification product, how many times have you seen your Production department fight it out with the Quality Assurance department (QA) in the blame game of who actually owns the problem? 

Whose problem is it? On one hand, you have QA stopping the line and quarantining the out-of-spec product and on the other, production begrudgingly starts increasing the product output to ensure orders are filled and delivered on time.

What happens to the quarantined product? It seemingly shifts to some quarantine or on hold storage area where it dies a slow death. Meanwhile the Sales team argue the point, ‘Why can’t I sell this product, I can see it in the inventory system?’.

Is this a common scenario in your business? How often has this problem been brought to the table yet remains unresolved? 

Management becomes involved when inventory inputs are not equalling the projected outputs or storage space becomes scarce or too expensive (whichever is first). As a result, the business begins to write-off product value and the argument of fault ownership plays out again and the merry-go-round continues.

It’s about lost time, product waste, money and employee engagement

Here is a step-by-step process to solving the common out-of-spec product blame game, that we have successfully implemented with our clients.

1. All out-of-spec products are quarantined and put on hold. Write-off costs are charged back to the production area budget.

2. The area or line Supervisor can sign-off up to $300 write-off costs, anything greater than $300 must be escalated to the Production Manager.

3. Initial report completed on the issue includes: date, time, line, product code/name, what went wrong and write-off costs as confirmed by Finance and assigned to the correct budget. This document is signed by both QA and Production acknowledging the issue at the time of quarantine.

4. Follow-up report includes: root cause analysis and corrective action plan with timelines and Manager sign-off once completed. The second part to this, is a section for QA on whether the product can still be sold, but through alternative channels and advise the Sales department.

5. Out-of-spec product write-off costs become part of the business Key Performance Indicators (KPI’s) with an aim of zero costs and can filter into any right first-time metrics.

The biggest motivator in this process is no single area of business wants to lose their budget to write-off costs, especially if they need to increase employee numbers, equipment investment or maintenance expenses. 

Our process encourages departments to work together to ensure minimal (if any) write-offs and supports a right first-time model to eliminate loss of money and time, or having to deal with QA stopping the line or quarantining products. 

The outcome from this out-of-spec product process creates a productive working environment with improved communication and employee engagement with ownership of their responsibilities. It also provides a sustainable solution to reduce or eliminate the issue from arising again.

Is this something you’ve experienced in your food business? How did you resolve the problem and has this prevented any further occurrences of internal conflict? I’d love to hear your thoughts in the comments below.