Reject Rate / Rework Rate
S%The percentage of units that fail quality requirements and must be reworked or discarded.
Also known as: Defect Rate (Six Sigma), Scrap Rate (manufacturing), Fallout Rate, Nonconformance Rate
Quality issues come in two forms: rejects that are scrapped (discarded entirely) and rejects that are reworked (sent back through earlier steps). Both reduce effective capacity, but rework has a bigger impact because it consumes capacity at multiple steps.
Scraps reduce the effective process rate by the scrap percentage. Reworks reduce the capacity of every step the reworked unit must pass through again.
Formula
For scraps: Effective rate = r × (1 − S%)
For FPY: First Pass Yield = 1 − Reject Rate
Example — Scraps
Process rate is 10/hour, scrap rate is 25%. Effective rate = 10 × 0.75 = 7.5/hour. Effective process time = 6 / 0.75 = 8 minutes.
Example — Rework
Process 2 (capacity 10/hour) rejects 2.5 units/hour back to Process 1 for rework. Process 2’s effective capacity drops to 7.5/hour. Process 1 now handles its normal throughput plus 2.5 rework units, potentially creating a new bottleneck where there wasn’t one before.
Why It Matters
Even small rework rates have outsized impact on flow times and capacity. A 10% rework rate doesn’t just cost 10%, it can cascade across multiple steps, creating new bottlenecks, extending system process time, and significantly increasing cost per unit. Measuring and reducing reject rates at the bottleneck is especially critical.