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Apple Expected 10% Bad iPhones from Foxconn?

by Mark Graban on May 6, 2013 · 2 comments

its just natural 150x150 Apple Expected 10% Bad iPhones from Foxconn? leanI’d read before that Apple’s supplier (Foxconn) was having trouble assembling iPhone 5s to Apple’s standards… but this article contains some shocking stats: “Apple Returns Millions of Defective iPhone 5 Smartphones.”

Millions… 5 to 8 million defective phones returned. Foxconn has only been able to achieve an 80% quality rating… suggesting 2 in 10 have some sort of problem. What were Apple’s expectations? Shockingly low.

The agreement between Apple and its outsourced manufacturer allegedly states that a 90 percent quality  rate is required (meaning only 1 out of 10 iPhones are  allowed  to be broken).

I’m pretty shocked that Apple expected (or allowed) a 10% defect rate.

The bad working conditions at Foxconn have been well documented (including this previous blog post of mine).

This goes to show there are multiple definitions of quality, including:

Fitness for use: Does the product, as designed, meet the customer’s needs?

Lack of defects: Not having physical problems or electrical problems

This is a VERY high defect rate for manufacturing. That’s hardly a six sigma quality level.

Having to take back the defective product add costs and hurts profit margins for Foxconn.

Last Monday, I blogged about a Canadian hospital CEO who stated they were hurting “8 to 10%” of the patients who walk through the door.


blog photo Apple Expected 10% Bad iPhones from Foxconn? leanAbout LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology. Mark is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as the new Executive Guide to Healthcare Kaizen. Mark is also the VP of Innovation and Improvement Services for KaiNexus.


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{ 2 comments… read them below or add one }

1 Robert Drescher May 6, 2013 at 2:47 pm

Hi Mark

A 10% defect rate must be why Apple products cost so much extra, it is fortunate for them they are so cutting edge, if they weren’t they would have been out of business years ago with such poor quality.

But I guess poor quality goes hand in hand with there just get it to market mindset. Quality production requires some time and effort to set up.

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2 Mark Graban
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May 6, 2013 at 3:11 pm

Yeah, it’s a good thing they can charge a premium for their products (an iPad mini is $100 than a Kindle Fire). Apple might be fooling themselves that the cost of poor quality is stuck on their suppliers, but it ultimately flows through to them.
Mark Graban recently posted..“Healthcare Kaizen” Public Workshop – June 25, Dallas / Fort WorthMy Profile

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