"Zero Defects" is Step 7 of "Philip Crosby's 14 Step Quality Improvement Process" [1]. Although applicable to any type of enterprise, it has been primarily adopted within industry supply chains wherever large volumes of components are being purchased (common items such as nuts and bolts are good examples).
Zero Defects was a quality control program originated by the Denver Division of the Martin Marietta Corporation (now Lockheed Martin) on the Titan Missile program, which carried the Project Gemini astronauts into space in the middle to late 1960s. It was then incorporated into the Orlando Division, which built the mobile Pershing Missile System, deployed in Europe; the Sprint antiballistic missile, never deployed; and a number of air to ground missiles for the Vietnam War.
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The principles of the methodology are four-fold:
Every product or service has a requirement: a description of what the customer needs. When a particular product meets that requirement, it has achieved quality, provided that the requirement accurately describes what the enterprise and the customer actually need. This technical sense should not be confused with more common usages that indicate weight or goodness or precious materials or some absolute idealized standard. In common parlance, an inexpensive disposable pen is a lower-quality item than a gold-plated fountain pen. In the technical sense of Zero Defects, the inexpensive disposable pen is a quality product if it meets requirements: it writes, does not skip nor clog under normal use, and lasts the time specified.
The second principle is based on the observation that it is nearly always less troublesome, more certain and less expensive to prevent defects than to discover and correct them.
The third is based on the normative nature of requirements: if a requirement expresses what is genuinely needed, then any unit that does not meet requirements will not satisfy the need and is no good. If units that do not meet requirements actually do satisfy the need, then the requirement should be changed to reflect reality.
Further, the idea that mistakes are inevitable is rejected out of hand. Just as the CEO wouldn't accept 'mistakenly' not getting paid occasionally, his/her chauffer 'mistakenly' driving them to the wrong business, or their spouse 'mistakenly' sleeping with someone else ('Gee, honey, I thought that was you I was in bed with!'), so the company shouldn't take the attitude that they'll 'inevitably' fail to deliver what was promised from time to time. Aiming at an "acceptable" defect level encourages and causes defects.
The fourth principle is key to the methodology. Phil Crosby believes that every defect represents a cost, which is often hidden. These costs include inspection time, rework, wasted material and labor, lost revenue and the cost of customer dissatisfaction. When properly identified and accounted for, the magnitude of these costs can be made apparent, which has three advantages. First, it provides a cost-justification for steps to improve quality. The title of the book, "Quality is free," expresses the belief that improvements in quality will return savings more than equal to the costs. Second, it provides a way to measure progress, which is essential to maintaining management commitment and to rewarding employees. Third, by making the goal measurable, actions can be made concrete and decisions can be made on the basis of relative return.
While Zero Defects began in the aerospace and defense industry, started at Martin Marietta in the 1960s, thirty years later it was regenerated in the automotive world. During the 1990s, large companies in the automotive industry tried to cut costs by reducing their quality inspection processes and demanding that their suppliers dramatically improve the quality of their supplies. This eventually resulted in demands for the "Zero Defects" standard. It is implemented all over the world.
Criticism of "Zero Defects" frequently centers around allegations of extreme cost in meeting the standard. Proponents say that it is an entirely reachable ideal and that claims of extreme cost result from misapplication of the principles. Technical author David Salsburg claims that W. Edwards Deming was critical of this approach and terms it a fad.
Another criticism was that Zero Defects was a motivational program aimed at encouraging employees to do better. Crosby denied ever having said any such thing under any circumstances. He stated repeatedly that defects occur because of management actions and attitudes.