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A product defect is any characteristic of a product which hinders its
usability Usability can be described as the capacity of a system to provide a condition for its users to perform the tasks safely, effectively, and efficiently while enjoying the experience. In software engineering, usability is the degree to which a sof ...
for the purpose for which it was designed and
manufactured Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a ran ...
. Product defects arise most prominently in legal contexts regarding
product safety Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Prod ...
, where the term is applied to "anything that renders the product not reasonably safe".Patricia A. Robinson, ''Writing and Designing Manuals and Warnings'' (2009), p. 234. The field of law that addresses injuries caused by defective products is called ''
product liability 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 b ...
''. 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 ''Tested'' is a live album by punk rock band Bad Religion. It was recorded in the USA, Canada, Germany, Estonia, Denmark, Italy and Austria, in 1996, and released in 1997. It is Bad Religion's second live album. Instead of using crowd microphon ...
, 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. 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 Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.See "Time Value", "Discount", "Discount Yield", "Compound Interest", "Efficient ...
price reflecting the defect. For example, where a clothing manufacturer's
inspection An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity. ...
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 An outlet store, factory outlet or factory shop is a brick and mortar or online store in which manufacturers sell their stock directly to the public. Traditionally, a factory outlet was a store attached to a factory or warehouse, sometimes allowi ...
and with the
label A label (as distinct from signage) is a piece of paper, plastic film, cloth, metal, or other material affixed to a container or product, on which is written or printed information or symbols about the product or item. Information printed ...
cut off to indicate that the quality is not intended to reflect on the
brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
. 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) identified the concept of “Product Quality Risk in Supply Chain” 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

Thus, product quality risk is an inherent part of the supply chain risks. In other words, it tends 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 their toys, it tarnished
Mattel Mattel, Inc. ( ) is an American multinational toy manufacturing and entertainment company founded in January 1945 and headquartered in El Segundo, California. The company has presence in 35 countries and territories and sells products in mor ...
’s reputation, and disrupted the supply of its products in the market. In the literature, the concept of product quality risk has not been fully investigated. Although Zsidisim (2003) stated that quality risk includes the risk of producing unsafe products that can harm the consumer, even when these defects are caused by another firm or inherited from a sub-contractor. However, neither PQR nor its
domino effect A domino effect or chain reaction is the cumulative effect generated when a particular event triggers a chain of similar events. This term is best known as a mechanical effect and is used as an analogy to a falling row of dominoes. It typically ...
in the
supply chain In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
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) (Dawar & Pillutla, 2000) and “moral hazard problem” (defined as the outcome of
asymmetric information In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can ...
, imperfect observability in supplier's quality) (Hwang et al., 2006),Hwang, I.,
S. Radhakrishnan Sarvepalli Radhakrishnan (; 5 September 1888 – 17 April 1975), natively Radhakrishnayya, was an Indian philosopher and statesman. He served as the 2nd President of India from 1962 to 1967. He also 1st Vice President of India from 1952 ...
and L. N. Su, 2006. Vendor Certification and Appraisal: Implications for Supplier Quality. Management Science, 52(10): 1472-1482.
are not about the risk of product quality in a global supply chain context.


See also

*
Product recall A product recall is a request from a manufacturer to return a product after the discovery of safety issues or product defects that might endanger the consumer or put the maker/seller at risk of legal action. The recall is an effort to limit rui ...


References

{{Authority control Quality management Business law Product liability