Quality and delivery terms, explained

The gap between the gross margin a job was priced at and the margin it actually makes by the end. In a business that quotes, delivers and installs, most of it happens after the job is won: rework, return visits, supplier errors, client changes absorbed instead of priced, and delivered work that never gets invoiced.

It is easy to blame pricing. More often the job was priced correctly and the margin leaked at the handovers between quote, design, purchasing, dispatch and install.

A trip back to a site to finish or correct work that should have been completed the first time, typically for missing items, wrong parts or damage. Each one costs transport, labour and goodwill, and none of it is in the original price.

Counting return visits per 100 deliveries is one of the simplest ways to see whether jobs are leaving complete.

The share of deliveries or jobs that arrive on the promised date with everything that was ordered. A delivery that is on time but missing one item counts as a failure, which is why OTIF is usually lower than people expect.

It is only useful with the reasons behind it: a falling OTIF tells you something is wrong, the reasons tell you where to look.

The total cost to a business of things not being done right the first time. It covers the cost of producing something that has to be redone, the cost of fixing or replacing it, the cost of remedial visits or returns, and the internal time spent chasing and reworking rather than producing. It is usually much larger than businesses expect, because most of it never appears as a single line in the accounts.

Putting a £ figure on it is normally the first step, because it turns "quality feels expensive" into a number that can be ranked against other spending and tracked as it falls.

A practical way to sort quality costs: prevention (work done to stop errors happening), appraisal (checking and inspection), internal failure (errors caught inside the business (rework, scrap, extra labour) and external failure (errors that reached a customer) remedial visits, replacements, credits, lost goodwill).

Failure costs are usually far larger than prevention and appraisal costs. Moving spend from the last two buckets to the first is how quality gets cheaper rather than more expensive.

Work that has to be done again because the first attempt was wrong, incomplete or unusable. Rework is different from scrap: the product or service can be corrected, so the cost shows up as extra labour, extra material and lost capacity rather than as a write-off.

Rework is often invisible in reporting because it is absorbed by the same people who were going to do other work. That is why it is worth counting separately.

The proportion of work that is completed correctly without any rework, correction or re-do. It is usually expressed as a percentage. A business with a 90% right-first-time rate is reworking roughly one job in ten, even though nothing on the balance sheet labels it that way.

It is one of the clearest single measures of whether a process is under control, and it is easy to explain to a team.

A structured way of finding out why a problem really happened, rather than stopping at the point where it was noticed. The distinction matters: the place a fault is discovered is often not the place it was created. Root cause analysis keeps asking "why" until it reaches something that can actually be changed so the problem cannot recur.

Without it, corrective action tends to fix the symptom, usually by asking people to "be more careful", and the error comes back.

A simple root cause technique: state the problem, ask why it happened, then ask why that answer is true, and repeat around five times until you reach a cause you can fix. It is basic and works well on the shop floor or in a meeting room without any tools.

Its value is in stopping the first plausible answer from being accepted as the real one.

A structured eight-step method for solving a recurring problem and making sure it stays solved: form a team, describe the problem, contain the damage immediately, find the root cause, choose and verify a permanent fix, implement it, prevent recurrence, and recognise the team. It was developed for manufacturing and is widely used where a defect has reached a customer.

Its discipline is the point. Containing first stops the bleeding, and the final steps stop the fix being abandoned once attention moves on.

A change made to stop a problem happening again. It differs from containment (which stops the problem spreading now) and from correction (which fixes this particular instance). A genuine corrective action changes the process, paperwork, layout or system so the error cannot be made, or cannot get through unnoticed.

If a corrective action is "remind the team to be careful", it is not a corrective action. It is a wish.

A change made to stop a problem happening in the first place, before it has occurred. It comes from looking at what could go wrong (a new product, a new supplier, a change in shift pattern) rather than reacting to something that already went wrong.

Preventive action is cheaper than corrective action, but it is also easier to skip, because nothing has broken yet.

The combined term for the two above, used as a heading in most quality management systems and in ISO 9001. A CAPA log is the record of problems found, what was done about them and whether it worked.

A CAPA log is only as useful as its closure discipline: entries that stay open for months usually mean the fix was never real.

Anything that does not meet a stated requirement: a product, a part, a delivery, a document or a process. A non-conformance is not automatically a disaster; it is the formal name for "this is not what it should be", which is why recording them accurately is the raw material of improvement.

Under-reporting non-conformances is very common and very costly: the numbers look healthy while the same errors are absorbed.

The immediate action taken to stop a problem spreading or reaching more customers, taken before the root cause is properly understood. Sorting stock, checking work in progress, pausing despatches or adding an inspection step are all containment. It is deliberately temporary and deliberately fast.

Containment buys the time needed to find the real cause without continuing to ship the fault.

An internationally recognised standard for a quality management system. It sets out what a business must have in place (how it plans, controls and improves its processes) rather than dictating what those processes should be. Certification is granted by an independent certification body after an audit, not by the consultant who helped prepare you.

The distinction matters commercially: a consultancy that prepares you for certification cannot issue the certificate, because that would remove the independence the certificate depends on.

The documented way a business manages quality: its processes, responsibilities, records and the checks that prove the work is being done properly. A good system is one the team actually uses. A bad one exists mainly to satisfy an auditor and is opened twice a year.

If a QMS is not being used day to day, it is producing paperwork rather than quality, and it will eventually fail an audit anyway.

A scheduled, planned check of the business’s own processes and records, carried out by someone competent to do it, to confirm the system is being followed and is still fit for purpose. It is a requirement of ISO 9001 and a useful management tool in its own right.

Done well, internal audits find problems while they are still cheap. Done badly, they become a formality that only proves the paperwork exists.

A comparison between where a business currently is and where it needs to be. Most often, the difference between current practice and what ISO 9001 requires. The output is a list of what is missing or inadequate, ranked by importance, which becomes the plan.

It is usually the first piece of work in a certification project, because it prevents effort being spent on things that already exist.

The work of making sure bought-in parts, materials and services arrive fit for use, and that a supplier who gets something wrong corrects it and does not repeat it. It covers what you specify, how you receive and check goods, what happens when something is wrong, and how the two businesses agree the fix.

Most supplier problems are not purely the supplier’s fault: they start in an unclear hand-off, where each side assumed the other was checking something.

An experienced quality professional who works with a business part time, typically a few days a month, rather than as a full-time employee. They take responsibility for quality performance, corrective actions, supplier issues and audits, and keep that work moving between visits.

It suits a business that has outgrown doing quality work informally but cannot yet justify a full-time quality manager.