In a manufacturing environment, small lapses in quality can quickly snowball into big losses. That’s where metrics like First Time Quality (FTQ), Defect Rate, and Scrap Rate come into play. These three indicators help identify how well a process performs without the need for rework, how frequently defects occur, and how much material is wasted entirely. Monitoring them is critical for driving quality improvement, minimizing cost, and maintaining delivery timelines. 

OrcaLean’s FTQ, Defect & Scrap Rate Calculator makes it simple for your team to measure, monitor, and take data-driven action—without the burden of messy spreadsheets or manual errors.

What is FTQ in Manufacturing and Why Is It Important?

First Time Quality (FTQ) measures the percentage of products that are manufactured correctly the first time without the need for rework or repair. It is one of the most direct indicators of process efficiency and operator effectiveness.

Why FTQ Matters:

• Reflects real-time process health and consistency.
• Directly impacts throughput, labor efficiency, and delivery timelines.
• High FTQ = lower cost of poor quality (CoPQ).
• Helps CI teams spot upstream quality issues early.

Example: If 980 out of 1,000 units pass quality inspection the first time, your FTQ is:

FTQ = (980 / 1000) × 100 = 98%

That 2% failure might seem small—but if each rework costs $50, that’s $1,000 lost daily.

By improving FTQ even slightly, manufacturers can reduce rework, enhance customer satisfaction, and drive higher OEE (Overall Equipment Effectiveness) across operations.

Confused between first time quality and second time quality in manufacturing? Download our free presentation to understand what is second time quality and why it is essential to understand the difference between these similar sounding terms.

What Is the Defect Rate and How Do You Calculate It?

The defect rate is the proportion of units produced that contain one or more defects, regardless of whether those defects are fixable. It helps teams track how frequently quality issues arise in production and is key to identifying problem areas in the process.

Formula to Calculate Defect Rate:

Defect Rate (%) = (Number of Defective Units / Total Units Produced) × 100

Example: You produced 5,000 units. If 200 units had defects: Defect Rate = (200 / 5000) × 100 = 4%

Step-by-Step:

1. Count total units produced in a time frame.
2. Count how many had one or more defects.
3. Plug into the formula and calculate.

What It Tells You:

• A high defect rate signals recurring quality problems.
• Helps CI teams prioritize root cause investigations.
• Tracks the effectiveness of corrective actions over time.

A plant with a 1% defect rate is operating with far fewer disruptions and lower waste than one with 5%—even if both meet production targets.

Explore our blog to learn how to improve production quality in manufacturing and create a culture of continuous improvement.

How Do You Calculate Scrap Rate and What Does It Reveal?

The scrap rate represents the percentage of units or materials that are discarded and cannot be reworked or reused. It’s a direct measure of material loss—and a major contributor to wasted cost.

Formula to Calculate Scrap Rate:

Scrap Rate (%) = (Scrapped Units / Total Units Produced) × 100

Key Differences from Defect Rate:

• Defect rate includes anything needing rework or rejection.
• Scrap rate only includes unrecoverable losses.

Why It Matters:

• High scrap rates mean lost material, energy, and labor.
• Indicates poor upstream process control or material handling.
• Reducing scrap directly improves margins without increasing output.

Example:

• Out of 10,000 parts made, 300 are scrapped:
• Scrap Rate = (300 / 10,000) × 100 = 3%

Scrap costs are rarely just material—they include operator time, machine wear, and disposal fees. Even a 1% reduction in scrap can save tens of thousands annually.

Who Uses These Metrics on the Factory Floor?

These metrics aren’t just for top leadership—they guide decision-making across the entire factory team.

• Plant Managers - They use FTQ and scrap trends to monitor plant health, guide investment, and report progress to executive leadership. It helps them benchmark across shifts and product families and ensures the plant hits quality and delivery goals.
• Quality Engineers - They track defect types, root causes, and recurrence rates using these metrics. Defect rate analysis often triggers corrective actions and supplier quality escalations. FTQ also helps validate the effectiveness of recent quality initiatives.
• Lean Leaders / CI Managers - They rely on FTQ and scrap rate to measure the impact of improvement projects. These metrics help identify bottlenecks, waste, and rework loops, enabling them to design more effective Kaizen events or process trials.
• Supervisors and Front-Line Leads - Shift leaders use real-time FTQ and scrap rate data to escalate issues early, coach operators, and make on-the-spot decisions. These metrics become the foundation for effective Gemba walks and shift-based accountability.

Want to explore the qualities of a good quality manager in factory? Read our detailed blog.

Why Should Plant Managers and CI Leaders Track These Metrics?

Tracking FTQ, defect rate, and scrap rate helps leaders move from reactive firefighting to proactive improvement. Here’s how each role benefits:

• Role in KPI dashboards and daily management - These metrics are foundational KPIs for any factory. They inform daily production huddles, shift reports, and escalation routines—giving leaders a live snapshot of quality performance across shifts and lines.
• How they help prioritize process improvements - By highlighting which lines or products have the highest quality loss, these metrics help CI leaders focus their problem-solving efforts where they’ll have the most impact—whether that’s a faulty fixture, an undertrained operator, or a material issue.
• Relevance to lean, Six Sigma, and ISO standards - Lean and Six Sigma require data-based decision-making. ISO 9001 mandates continual improvement through measurable objectives. FTQ, defect rate, and scrap rate provide the exact evidence needed to meet these standards—and drive improvement that’s recognized globally.

What Are the Common Mistakes in Tracking FTQ, Defect, and Scrap?

Many plants struggle with data reliability when it comes to quality metrics. Common pitfalls include:

• Manual calculations in spreadsheets: Leads to formula errors, missing entries, and inconsistencies in calculation logic—especially across shifts or plants.
• Lack of real-time tracking: Delays action. By the time reports are reviewed, the issue has already affected hundreds of parts or an entire batch.
• Confusing defect vs. rework vs. scrap: Teams often misclassify these, inflating or deflating metrics—leading to incorrect root cause analysis or improvement focus.

The solution? A real-time manufacturing dashboard like Solvonext ensures consistent tracking, automatic calculation, and immediate alerts—giving you reliable data to act on instantly.

How Can a Simple Calculator Help Improve Accuracy and Actionability?

Instead of relying on guesswork or spreadsheets, a dedicated calculator delivers fast, accurate, and actionable insights. Here’s how it helps:

• Eliminate Excel errors: No more broken formulas or misentered values—just clean, logic-locked calculations.
• Instant visibility into quality loss: Spot trends and respond before issues escalate into customer complaints.
• Supports faster root cause analysis and escalation: When paired with real-time logs, teams can connect quality losses to specific operators, materials, or machines.
• Use during shift huddles, Gemba walks, audits: Show real-time FTQ and scrap data to align teams and show auditors your proactive approach.

Use OrcaLean’s FREE Manufacturing Calculator to track FTQ, defect rate, and scrap rate without the manual burden—just plug in your numbers and get clarity in seconds.

What Are Good Benchmarks for FTQ, Defect Rate, and Scrap Rate?

Benchmarks vary by industry, product complexity, and process maturity. But some general reference points can help:

FTQ Benchmarks:

• Automotive: 98–99%+
• Electronics: 95–98%
• Precision machining: >97%

Defect Rate Benchmarks:

• World-class manufacturing: <1%
• Industry average: 3–5%

Scrap Rate Benchmarks:

• Lean operations: <1%
• Average operations: 2–3%
• Above 5% = warning sign

But beware: chasing generic benchmarks without context can mislead your improvement efforts. What matters more is your trendline. Are you improving month over month? Benchmarks help you set direction—but improvement must be tied to internal goals, customer requirements, and cost targets.

Ready to Take Control of Your Factory's Quality? Try the FTQ, Defect & Scrap Calculator

Tracking FTQ, defect rate, and scrap rate isn’t just about reporting—it’s about action. These metrics reveal the hidden costs, recurring issues, and improvement opportunities that impact your bottom line every day.

With OrcaLean’s FREE FTQ, Defect & Scrap Rate Calculator, you can ditch spreadsheet errors, simplify data entry, and gain fast, clear insights into your factory’s true performance.

It’s perfect for daily Gemba walks, weekly quality reviews, or monthly reporting. Whether you're managing one line or multiple sites, this tool helps your team stay aligned and make better decisions—faster.

Use the Calculator Now.