ISO9001 System Document Package (37) | Work Instruction for Nonconforming Product Review and Disposition

Document Description: This work instruction is a third-level supporting document for the "Nonconforming Product Control Procedure" (the 22nd document in the package). It aims to translate the principle requirements of Clause 8.7 "Control of Nonconforming Outputs" in ISO 9001:2015 into specific actions. The second-level procedure document answers questions such as "Who has the authority to determine nonconformity, who approves the disposition, and what records should be kept." This work instruction addresses the most practical on-site issues: how to hang red tags after discovering nonconforming products, how to manage the isolation area, under what circumstances the team can dispose of nonconformities on the same day, when an MRB review meeting must be held, what materials need to be prepared before the review meeting, what are the conditions for rework, repair, and sorting, how to obtain customer approval for concession acceptance, how to ensure scrapped items do not re-enter the system, and who signs off on the re-inspection after it is passed. It is applicable to all manufacturing enterprises (mechanical processing, electronic assembly, food and cosmetics, textile and apparel, building materials and hardware) and service enterprises that provide physical delivery. For pure service enterprises, replace "nonconforming product" with "nonconforming service output" (such as delivery delays, document errors, operational mistakes), and the review, disposition, and verification logic from Clauses 4.1 to 4.10 are entirely applicable. This document can be directly published and used as a third-level document by enterprises.

1. Purpose

To standardize the grading, identification, isolation, review organization, selection of disposition methods, rework, repair, and sorting operations, concession acceptance approval, downgrading, scrapping, and destruction, re-inspection verification, and closure requirements for nonconforming products (including nonconforming semi-finished products, finished products, purchased products, and service outputs) in our company. This document clarifies the operational conditions, authorities, and time limits for each step to ensure that nonconforming products are controlled and not misused or lost, and that nonconformity information becomes an effective input for cause analysis and continuous improvement.

2. Scope of Application

2.1 This work instruction applies to the review and disposition of nonconforming products and outputs discovered at all stages from incoming goods, processing, assembly, inspection, packaging, storage to post-delivery.

2.2 Covered objects include: purchased products (raw materials, purchased components, outsourced parts), intermediate and semi-finished products during production, final products, expired or damaged products in inventory, returned products from customers, nonconforming products found in customer property, and nonconforming service outputs during service provision.

2.3 The following scenarios should follow stricter external requirements, and in case of conflict, the external requirements shall prevail:

• When customer contracts, technical agreements, or industry standards specify the disposition methods and the approval path for concession acceptance;
• For products regulated by laws such as mandatory product certification, special equipment, medical devices, and food, rework, sorting, and concession acceptance are prohibited if the regulations forbid them;
• Nonconformities involving safety characteristics or key characteristics must not be released by team-level or department-level reviews and must be escalated to company-level MRB reviews.

2.4 This work instruction does not replace product standards, drawings, technical conditions, inspection specifications, or customer acceptance criteria. It only specifies the operational methods for nonconforming products under controlled conditions.

2.5 The company's nonconforming product disposition follows four bottom lines: No disposition without review, no movement without isolation, no release without re-inspection, no closure without record.

3. Responsibilities

3.1 Quality Department (Quality Inspection Team): Responsible for identifying and confirming nonconforming products, grading and judging, red tag labeling and isolation supervision; responsible for issuing and circulating the "Nonconforming Product Review and Disposition Form"; responsible for organizing department-level and company-level reviews; responsible for maintaining the "Nonconforming Product Register" and monthly statistical analysis; responsible for re-inspection verification and closure confirmation of disposition results; responsible for issuing overdue warnings for nonconforming products not yet disposed.

3.2 Production Department (Responsible Process/Team): Responsible for the initial judgment of nonconforming products, on-site isolation, red tag labeling, and quantity counting; responsible for implementing team-level rapid dispositions within authority; responsible for executing rework, repair, and sorting operations according to approved disposition decisions; responsible for the initial investigation of nonconformities in the process and on-site improvements.

3.3 Technical Department (R&D/Process): Responsible for the technical judgment and cause analysis of nonconforming products; responsible for assessing the technical feasibility of rework, repair, sorting, concession acceptance, and downgrading; responsible for preparing rework and repair process documents and sorting operation plans; responsible for determining the upper limit of rework times and the impact on remaining life.

3.4 Purchasing Department: Responsible for external communication, claims, and return or replacement arrangements for nonconforming products from suppliers; responsible for conveying nonconforming information to suppliers and tracking their corrective actions.

3.5 Sales Department (Customer Interface): Responsible for customer communication and obtaining written opinions for concession acceptance, post-delivery nonconformities, and returned products; responsible for archiving and transferring customer approval documents.

3.6 Warehousing Department: Responsible for the physical setup, area labeling, and access control of the nonconforming product isolation area; responsible for ensuring the consistency between the inventory records and the physical items; responsible for processing return to inventory, scrapping transfer, or re-entry of qualified products based on approved disposition conclusions.

3.7 Nonconforming Product Review Group (MRB): Led by the head of the Quality Department, with representatives from Technical, Production, Purchasing, Sales, and Warehousing departments as members. Responsible for the review and disposition decision-making for company-level nonconforming products; responsible for tracking the execution of decisions. In the absence of the group leader, a proxy can be designated, but the person who proposed the disposition application cannot host the meeting.

3.8 Management Representative/Quality Manager: Responsible for approving downgrading, batch rework plans, and disposition decisions involving delivery; responsible for authorizing concession acceptance and scrapping applications.

3.9 General Manager: Responsible for approving disposition decisions involving significant customer interests, regulatory compliance, safety characteristics, and batch scrapping; responsible for bearing the ultimate responsibility for the consequences of nonconforming product disposition externally.

4. Work Procedures

4.1 Discovery, Grading, and Judgment Authority for Nonconformities

4.1.1 Any employee who discovers a suspected nonconforming product has the right and should immediately stop the flow of that batch, place it in the pending review area, and notify the inspector. They must not continue the flow by judging it as "not a big issue."

4.1.2 The inspector confirms the nonconformity based on inspection specifications, drawings, and technical conditions, and grades the nonconformity into four levels according to the defect consequences. The use of the term "nonconforming" alone is prohibited:

4.1.3 A and B level nonconformities must be reported to the Head of Quality Department within 2 hours of discovery, and A level nonconformities must also be reported to the Management Representative. C and D level nonconformities should be handled according to the normal process within the shift.

4.1.4 If the same defect reoccurs 3 or more times in the same process within 7 days, or if the cumulative number of the same defect in a month exceeds the set threshold (suggested 20 items), regardless of the individual level, it should be treated as B level and trigger a cause analysis.

4.2 Labeling, Isolation, and Inventory Management Operations

4.2.1 The labeling form is uniformly a red nonconforming tag (red card). The red card must include at least: product name and model, batch number, quantity, discovery process, discovery date, defect description, defect level, and the person who issued the card. The red card must be firmly attached to the product or the visible part of the packaging box, and each box must be labeled individually, not just the first box.

4.2.2 Isolation area setup requirements:

• The Quality Department and the Warehousing Department should designate an independent nonconforming product isolation area, marked with yellow and black warning lines, and labeled "Nonconforming Product Area / Do Not Use Without Approval";
• The isolation area should be lockable or physically separated, maintaining a visible distance from other material areas. If an independent area cannot be set up, a fenced or isolated net area should be used to form a closed space;
• Temporary pending items within the process should be placed in covered red turnover boxes or red material racks, clearly distinguished from qualified product turnover boxes;
• If there is an ERP/MES system, the inventory status field should be set to "Nonconforming Frozen" to prevent system release. The paper ledger and physical quantities should be verified daily.

4.2.3 Three steps for isolation operations: Count the quantity (consistency between physical items, work orders, and system, discrepancies must be clarified on-site), Hang the red card (each box and item), Register in the area (fill in the "Nonconforming Product Register" and sign by both parties).

4.2.4 Nonconforming products must not be disassembled, used, mixed, lent out, or taken away as "samples" before the disposition conclusion is approved. For special needs such as sampling analysis, a sampling application must be filled out and approved by the Head of Quality Department, and the label and quantity of the remaining items must be updated simultaneously.

4.2.5 For nonconformities discovered after delivery, if physical isolation is not possible, the Sales Department should immediately notify the customer to pause use or seal the items on-site, and define the impact scope of the same batch, process, and materials according to the "Identification and Traceability Control Procedure" (the 18th document in the package).

4.3 Initiation of Reviews and Three-Level Review Mechanism

4.3.1 Nonconforming product reviews are divided into three levels based on the impact scope. The company should solidify the grading standards to avoid all issues being escalated to meetings or minor issues being handled by teams:

4.3.2 The Quality Department is responsible for initiating the review and must submit a "data package" to the participants simultaneously. The data package should at least include: the "Nonconforming Product Review and Disposition Form," inspection records and actual measurement data, defect photos or physical items, batch and impact scope description, preliminary cause judgment by the Technical Department, and suggested disposition methods with cost impact estimates. Reviews without complete data should not be held (in emergencies, oral reviews can be conducted first, with data to be completed within 24 hours).

4.3.3 The essence of the review is "four questions": What is the nature of the defect (occasional or systematic)? How extensive is the impact? What methods can be used to dispose of it? Is the risk acceptable after disposition? Reviews that cannot clearly answer these four questions are considered formalities and should not form a release decision.

4.4 Rules for Company-Level Review (MRB) Meetings

4.4.1 Meeting frequency: Regularly once a week (suggested Tuesday afternoon), and temporary meetings as needed. For A level nonconformities and customer complaints, a temporary meeting must be held within 24 hours of discovery.

4.4.2 Fixed five-step meeting agenda:

1. Confirmation of nonconforming facts (Quality Department reports data, batch, impact scope);
2. Preliminary cause analysis (Technical Department and responsible department report, distinguishing between occasional and systematic issues);
3. Discussion and selection of disposition methods (evaluate feasibility and risk against the criteria in Clause 4.5);
4. Formation of resolution (specify disposition method, responsible department, completion time, re-inspection requirements, and whether customer approval is needed);
5. Assignment of follow-up actions (whether corrective actions are needed, whether traceability and customer notification are required, whether inspection specifications or control plans need to be updated).

4.4.3 Meeting record requirements: Record the meeting time, location, chairperson, participants, topics, opinions from all parties (including objections), final resolution, responsible person, completion date, and next tracking time point. Participants must sign to confirm. The resolution and the "Nonconforming Product Review and Disposition Form" should be archived together.

4.4.4 Tracking of resolution execution: The Quality Department should establish a tracking list and report the completion status of the previous resolution at the beginning of the next meeting. If overdue, the responsible department must explain the reason and reset the completion date. If overdue twice consecutively, the issue should be reported to the Management Representative for handling.

4.4.5 If nonconforming products awaiting disposition accumulate for more than 30 days, the Quality Department should issue an overdue warning. If they remain undispensed for more than 60 days, the Management Representative should directly specify the disposition method and hold the responsible parties accountable.

4.5 Selection Criteria for Disposition Methods

4.5.1 There are six disposition methods, and the company should check and explain the reasons in the disposition form, not simply write "handled":

4.5.2 The suggested priority order for selecting disposition methods is: rework → repair → sorting → downgrading → concession → scrap. Concession should not be the first choice for "meeting delivery schedules." Any concession application proposed for schedule reasons must be accompanied by a written risk assessment from the Technical Department.

4.5.3 The following scenarios must not be disposed of as concession or downgrading: involving safety characteristics and regulatory mandatory requirements, products explicitly stated by customers as not accepting concessions, products previously complained about by customers for the same defect.

4.5.4 For customer property (such as processed parts, molds, and packaging materials provided by customers), the disposition method must be agreed upon by the customer in advance, and the costs and responsibilities should be borne by the responsible party and handled according to the contract.

4.6 Requirements for Rework and Repair Operations

4.6.1 Rework and repair must have a process: The Technical Department should prepare a "Rework Work Instruction" for frequently occurring rework and repair items, specifying tools and fixtures, process parameters, operation sequence, precautions, re-inspection items, and criteria. One-time items can be described in the disposition form with text, and if more than 10 items, a work instruction must be compiled.

4.6.2 Personnel requirements: Rework and repair should be performed by trained and qualified personnel. For special processes such as welding, heat treatment, non-destructive testing, and electrical safety, valid qualifications are required. The process document version should be verified before the operation.

4.6.3 Process requirements for rework and repair:

• Count the quantity before the operation, maintain the label during the operation, and verify the quantity item by item after the operation;
• Record the removed parts and replacement parts separately, and the replacement parts must match the original specifications or be approved in writing by the Technical Department;
• Any changes must be traceable: if temporary process changes are involved, note them in the disposition form and handle them according to the "Change Management Procedure" (the 29th document in the package) as appropriate;
• The number of rework times for the same product should be cumulatively marked on the work order. If rework exceeds twice (or the upper limit specified by the Technical Department), the Technical Department should assess the remaining life and reliability to decide whether to downgrade or scrap.

4.6.4 Products that have been reworked or repaired must be resubmitted for inspection, and the inspection items must not be fewer than those before the nonconformity. Repaired products should be re-inspected according to the items determined by the Technical Department, and "repaired product" should be noted in the records.

4.6.5 Rework and repair should not be mixed with normal production lines in an "unfinished" state. A dedicated rework area should be established, and products can only return to the main line after inspection confirms they are qualified.

4.7 Requirements for Sorting (Selection) Operations

4.7.1 Before sorting, the Technical Department and the Quality Department should jointly develop a sorting plan, specifying: judgment criteria and limit samples, sorting method (full inspection or inspection by item), measuring tools and lighting conditions, labeling methods for conforming and nonconforming items, sampling re-verification ratio, and record-keeping requirements.

4.7.2 Sorting operation requirements:

• Sorting must be conducted in a controlled area, and nonconforming products should not be returned to the original process for operators to "sort themselves";
• Sorting personnel must be trained and understand the judgment criteria, and use known nonconforming and conforming samples for confirmation before starting work;
• For defects that cannot be judged by visual inspection alone (such as dimensions, electrical performance), measuring tools or instruments must be used;
• Conforming items selected must be re-labeled with green tags and packaged separately, and must not be mixed with batches that have not been sorted.

4.7.3 Re-verification of sorting results: The Quality Department should re-verify batches judged as conforming after sorting, with a re-verification ratio of at least 5% (and at least 10 items). If any items are missed, the entire batch must be resorted, and the missed items should be included in the responsibility traceability.

4.7.4 The labor hours, losses, and quantity reductions resulting from sorting should be included in the quality cost statistics. If the sorting labor hours for a single batch exceed the specified value, a corrective action for the source process must be triggered to prevent sorting from becoming a long-term "routine process."

4.8 Requirements for Concession Acceptance and Customer Communication

4.8.1 Concession acceptance application process: Responsible department proposes the application → Technical Department provides a technical feasibility assessment (defect nature, impact, remaining life, risk level) → Quality Department reviews → Sales Department submits to the customer for approval → Customer written agreement → Approval by Management Representative/General Manager → Apply concession acceptance label → Separate storage or shipment.

4.8.2 The content submitted to the customer for approval must include: product name and model, batch number and quantity, defect description and photos, defect level, reasons for concession acceptance (including impact on delivery schedule and cost), technical assessment conclusion, proposed compensation measures (such as extended warranty, price discount, usage condition restrictions), validity period or quantity limit.

4.8.3 Evidence of customer agreement: Written replies, email confirmations, signed concession acceptance application forms, and contract supplementary terms are all acceptable, but they must be traceable to specific individuals and dates. Oral agreements should be confirmed in writing by the Sales Department on the same day, noting the fact and time of the phone confirmation.

4.8.4 Concession acceptance should not become a routine: The company should track the number of batches and the proportion of batches accepted for concession. If the proportion increases for three consecutive months, a special analysis and source improvement plan should be organized by the Management Representative.

4.9 Management of Downgrading, Scrapping, and Destruction

4.9.1 Downgrading: The Technical Department should issue a downgrading judgment, specifying the new grade, applicable standards, and usage restrictions (such as "for non-safety components only" or "domestic sales only"). The product and packaging must change the label, and the system ledger should update the status. Downgraded products must not be sold using the original model nameplate.

4.9.2 Scrap application: Proposed by the responsible department or the Quality Department, noting the product name, batch, quantity, reason for scrapping, original value, processing costs incurred, and responsibility attribution. After confirmation by the Quality Department and the Technical Department and approval by the Management Representative, the application should be executed. If the scrap amount for a single batch exceeds the company's specified limit (suggested 5000 yuan), it must be approved by the General Manager.

4.9.3 Destruction and prevention of re-entry:

• Scrapped items should be transferred to a designated scrap area by the Warehousing Department, physically separated from the isolation area and locked;
• Scrapped items with recycling, reuse value, or risk of counterfeiting (including nameplates, casings, chips, and printed packaging materials) must be destructively processed (cutting, flattening, crushing, grinding to remove labels) before being transferred to waste recycling parties;
• Destruction operations must be supervised and signed by Quality Department personnel, recording the destruction time, method, quantity, and supervisor;
• Scrapped items must not re-enter the market or the factory as "substandard," "end-of-line," or "disassembled parts." Violations will be pursued according to company regulations.

4.9.4 For scrapped products involving customer property, customer molds, or customer-provided materials, customer written approval must be obtained before scrapping, and the items should be disposed of or returned according to customer requirements.

4.10 Re-inspection, Verification, and Closure

4.10.1 Re-inspection requirements after various dispositions: Full re-inspection for reworked products; re-inspection according to items determined by the Technical Department for repaired products; sampling re-verification for sorted conforming batches according to Clause 4.7.3; inspection according to downgraded standards for downgraded products; inspection according to normal items for concession accepted batches (only relaxing the approved defect items).

4.10.2 Re-inspection conclusions should be executed by an inspector other than the original one (if possible), noting "re-inspection" and the original disposition form number in the records. If re-inspection fails, the product should not be reworked again without traceability and must be resubmitted for review.

4.10.3 Closure conditions (all four must be met simultaneously):

• Disposition operations are completed and the quantity is consistent;
• Re-inspection is passed and a conclusion is issued;
• All relevant records (disposition form, rework records, re-inspection records, customer approval documents) are complete;
• Corrective actions required have been issued and recorded in the tracking list. The Head of Quality Department should sign the closure date on the disposition form.

4.10.4 Traceability and customer notification for delivered products: For A level defects or systematic defects, define the impact scope of the same batch, process, and materials, and assess whether customer notification, recall, or on-site handling is needed. If no recall is decided, the assessment basis and approval signatures must be recorded.

4.11 Recording, Statistics, and Data Linkage of Nonconformity Information

4.11.1 The Quality Department should establish a "Nonconforming Product Register," recording each item: date, discovery stage, product and batch, quantity, defect description, defect level, disposition method, disposition form number, completion date, responsible person, loss amount, whether corrective actions are required. The register should be reconciled with actual items and system status at the end of each month.

4.11.2 Monthly statistical analysis content: Pareto distribution by defect category, distribution by discovery stage (incoming, process, finished, customer end), distribution by responsible department, composition ratio of disposition methods, rework rate, sorting labor hours, scrapping loss amount, proportion of concession accepted batches, list of repetitive defects.

4.11.3 Data linkage and trigger rules:

• If the same defect category enters the top three or exceeds the threshold in a month, a special corrective action should be triggered;
• If the proportion of nonconformities in the incoming stage increases, the Purchasing Department should be provided with supplier performance deduction criteria;
• Nonconformities discovered at the customer end (including returns and complaints) should be treated as the most severe level and traced back to the internal inspection stage for missed inspection causes;
• Statistical results should be used as input for management review (the 26th document in the package) and continuous improvement (the 28th document in the package).

4.11.4 The retention period for nonconforming product disposition records should be no less than 3 years; for products involving safety and regulations, no less than 5 years after production ceases or as required by regulations. If the customer requires or the contract specifies, follow their requirements.

4.12 Process (Text Version Flowchart)

Discover Nonconformity (anyone can stop the line)
        ↓
Inspector confirms facts → Grading judgment (A/B/C/D)
        ↓
Count quantity → Hang red card → Move to isolation area → Register ledger → System freeze
        ↓
Review grading ── D level/C level small quantity ──→ Team/Department rapid disposition (within the shift to 24 hours)
        ↓ A level/B level/batch/concession/downgrade/scrap/delivered/repetitive
Company-level MRB review (complete data package → four questions → resolution + tracking list, within 48 hours)
        ↓
Disposition execution ──→ Rework/Repair ──→ Re-inspection (full or specified items)
        ├──→ Sorting ──→ Re-verification of conforming items 5% + re-disposition of nonconforming items
        ├──→ Concession ──→ Technical assessment → Customer written agreement → Approval → Yellow label + separate ledger entry
        ├──→ Downgrade ──→ Change label + limit usage
        └──→ Scrap ──→ Approval → Destructive disposal → Supervision record → Ledger and physical item write-off
        ↓
Re-inspection passed → Quality Manager signs closure (all four conditions met)
        ↓
Ledger statistics → Pareto/repetitive defects → Corrective actions (the 27th document in the package) → Management review input

4.13 Form References

5. Related Records

5.1 Nonconforming Product Review and Disposition Form: Fields include form number, discovery date and stage, product name and model, batch number and quantity, defect description and photo number, defect level, impact scope, preliminary cause analysis, disposition method (one or multiple of six), responsible department and person, completion time limit, re-inspection items and conclusions, customer approval status, approver, closure date and person. Example row: QR-NCR-01-26091501/2026-09-15/Final inspection/Sample shell 500 pieces/Batch 260914-C/30 pieces/Excess burrs on mounting holes, 0.3mm edge flipping/C level/Risk of 500 pieces in the same batch/Tool wear not replaced in time/Rework to remove burrs/Production Department XX/Complete by 2026-09-16/Full re-inspection of hole diameter and assembly after burr removal/—/Quality Department Head XX/2026-09-16/XX.

5.2 Nonconforming Product Register: Fields include sequence number, date, discovery stage, product model, batch, quantity, defect description, level, disposition method, disposition form number, completion date, responsible person, loss amount (labor + materials), whether corrective actions are required, closure status. Example row: 2026-09-15/Final inspection/Sample shell/Batch 260914-C/30/Hole burrs/C/Rework/NCR-26091501/2026-09-16/Production Department XX/420 yuan/No/Already closed.

5.3 MRB Review Meeting Minutes: Fields include meeting date and time, location, chairperson, participants and departments, topics and nonconforming facts, opinions from all parties (including objections), disposition resolution, responsible person and completion date, tracking time point, signatures of participants. Example row: 2026-09-15 15:00/Meeting Room 2/Quality Department XX/Technical XX, Production XX, Purchasing XX, Sales XX/Batch burrs in sample shells, involving 3 batches totaling 1200 pieces/Production requests sorting to meet delivery schedule, Quality Department suggests replacing the tool and reworking the entire batch/Resolution: Rework the entire batch to remove burrs, reduce tool life to 80% and force replacement, Sales Department informs customer of 2-day delivery extension/Production Department XX complete by 9-17/9-22 first tracking item in the meeting/(signatures).

5.4 Rework and Repair Notification Form: Fields include form number, disposition form number, product and batch, quantity, defect description, rework/repair category, process document number and version, tools and fixtures, operation sequence and key parameters, replacement parts list, cumulative rework times, operator, operation date, re-inspection requirements, re-inspection conclusion, inspector's signature.

5.5 Sorting (Selection) Operation Record: Fields include date, product and batch, sorting reason, sorting plan number, judgment criteria and limit sample number, measuring tool number, input quantity, conforming quantity, nonconforming quantity, re-verification ratio and results, signatures of operator and inspector, labor hour statistics. Example row: 2026-09-15/Sample shell 260914-C/Mixed with burr pieces/S-2609-05/Visual + tactile full inspection, no edge flipping/Limit sample SP-018/Gauge SP-002/500 pieces/472 pieces/28 pieces/Re-verified 24 pieces, no missed items/XX/XX/12 labor hours.

5.6 Concession Acceptance Application Form: Fields include application number, application date, customer name, product and batch, quantity, defect description and level, technical feasibility assessment conclusion and risk level, reasons for concession (including impact on delivery schedule), proposed compensation measures, customer opinion (contact person, confirmation method, date, written document number), approver, concession label number, validity period and quantity limit, shipment record. Example row: CR-26091501/2026-09-15/Customer/Sample shell 260913-A/1000 pieces/Mild color difference in coating/B level (appearance only)/Technical assessment: does not affect assembly or protective performance, no impact on remaining life/3-day risk to delivery schedule/2% price discount/Customer email confirmation (2026-09-15, XXX)/Management Representative XX/CR-LABEL-017/Limited to 1000 pieces, use within 30 days/Already shipped DN-260916-02.

5.7 Downgrade Usage Judgment Form: Fields include judgment form number, product and batch, quantity, original level and downgraded level, downgrade reason, change in applicable standards, usage restrictions (location/market/customer), label change record, inspection basis, Technical Department judgment person, approver, ledger change record.

5.8 Scrap Application and Destruction Supervision Record: Fields include application number, product and batch, quantity, reason for scrapping, original value and incurred costs, responsibility attribution, disposition method (destructive disposal method), applicant and department, Technical Department opinion, approver, destruction date and location, destruction method, supervisor's signature, waste recycling party name and transfer voucher number, ledger write-off date.

5.9 Nonconforming Product Monthly Statistical Report: Fields include statistical month, total nonconforming quantity and loss amount, Pareto distribution by defect category (top five), distribution by discovery stage, distribution by responsible department, composition ratio of disposition methods, rework rate, sorting labor hours, scrapping loss, proportion of concession accepted batches, list of repetitive defects, list of corrective actions triggered this month, improvement focus for next month.

6. Related Documents

6.1 Nonconforming Product Control Procedure (the 22nd document in the package)

6.2 Nonconformity and Corrective Action Procedure (the 27th document in the package)

6.3 Identification and Traceability Control Procedure (the 18th document in the package)

6.4 Product Release Control Procedure (the 21st document in the package)

6.5 Incoming Quality Control Work Instruction (the 34th document in the package)

6.6 Process Inspection Work Instruction (the 35th document in the package)

6.7 Final Inspection Work Instruction (the 36th document in the package)

6.8 Change Management Procedure (the 29th document in the package)

6.9 Record Control Procedure (the 4th document in the package)

6.10 Product Protection Control Procedure (the 20th document in the package); Customer Satisfaction Monitoring and Measurement Procedure (the 23rd document in the package)

6.11 Product drawings, technical conditions, technical agreements, and customer acceptance criteria; GB/T 19001—2016/ISO 9001:2015 Quality Management System Requirements

Usage Instructions

1. How to Modify According to Actual Enterprise Conditions

1. Localize Grading Thresholds: The defect grading examples in Clause 4.1.2 should be rewritten based on product characteristics. For mechanical processing enterprises, "key dimension out of tolerance" and "general dimension out of tolerance" should be specified to specific project numbers. For electronic enterprises, electrical safety, EMC, and functional failures should be listed as A level. For food and cosmetics enterprises, microbial, physicochemical, and label regulatory compliance should be listed as A level, and note that regulations may prohibit rework and sorting. The thresholds (repeated 3 times, monthly 20 items, batch 5%, single batch scrapping 5000 yuan) are suggested values. Enterprises should adjust based on their batch scale, with the principle that daily fluctuations below the threshold are handled by departments, and those above the threshold must be escalated to meetings.

2. Adapt Organization and Authority: In enterprises with fewer than 50 people, the three-level review mechanism is often compressed to two levels (inspector authority within the shift + company-level review), but the rule "the review chairperson cannot be the same person who proposed the disposition application" must be retained. This is a key point for authority balance. For enterprises without an independent Technical Department, a technical judgment responsible person should be designated (can be the Production Department head, but the judgment for concession and downgrading must be reviewed by the Quality Manager). For multi-site enterprises, the composition and resolution authority of each site's MRB should be clearly defined, and batches affecting multiple sites should be reviewed by the headquarters.

3. Adapt Isolation Area and System Locking: For enterprises with limited space, the isolation area can be smaller, but it must be "locked or enclosed + yellow warning line + independent label." If there is an ERP/MES system, the status must be frozen. Without a system, a paper ledger should be used to ensure quantity traceability, with daily verification. The most common failure in audits is not the lack of isolation but "ledger entries exist, but physical items have been taken for production."

4. Link with Existing Documents: This work instruction and the "Nonconforming Product Control Procedure" (the 22nd document in the package) have a hierarchical relationship. Responsibilities and principles already defined in the procedure document do not need to be copied, only the reference number is needed. If the enterprise already has "MRB Management Measures," "Rework and Repair Management Regulations," or "Scrap Management Regulations," their content can be incorporated into this work instruction as appendices to avoid different requirements for the same action in four documents. The nonconformity disposition requirements in the three inspection work instructions (the 34th to 36th documents in the package) should be consistent: the descriptions of "hanging red cards, opening disposition forms, re-inspection, and closure" in the three documents must be identical.

5. Forms Can Be Directly Applied: The form numbers in Clause 4.13 and the field lists in Section 5 constitute the minimum set of record templates for this package. When the enterprise goes live, it can start with the "Nonconforming Product Review and Disposition Form" and the "Nonconforming Product Register," and gradually activate other forms as the process progresses to avoid resistance from using a dozen forms at once.

2. Audit Focus Points

• Whether the physical items on-site match the ledger and system status; whether the isolation area is truly enclosed, and whether there are nonconforming items mixed with conforming items or "temporarily stored."
• Whether red cards are hung on each box and item, and whether the content is fully filled out (missing batch, quantity, defect description, and issuer are common nonconformities).
• Whether there are review records for nonconforming items, whether the participants cover necessary departments such as Technical and Production, and whether there are disposition forms signed by only one person from the Quality Department.
• Whether concession acceptance has customer written approval, technical assessment conclusions, labels, and validity periods, and whether it is separately recorded.
• Whether rework and repair have process documents, re-inspection records, and whether rework times are traceable, and whether there is evidence of reworked items being mixed into normal batches.
• Whether sorting is conducted in a controlled area, whether there is a sorting plan and limit samples, and whether there are re-verification sampling records.
• Whether scrapping has approval, destructive disposal, and supervision records, and whether the scrap area is freely accessible (this is a key evidence for preventing re-entry in audits).
• Whether repetitive nonconformities have triggered corrective actions and verified as effective, and whether there is a pattern of "picking the same defect every year without improving the source."
• Whether the assessment evidence for defining the impact scope and customer notification is retained when nonconformities are discovered in delivered products.
• Whether the monthly statistics of nonconformity information are genuine, whether they enter the management review input, and whether there is a response to deteriorating indicators.

3. Common Errors

1. Isolation Without Review: Nonconforming items are placed in the isolation area with red cards but not reviewed, and are uniformly "handled" before the audit, with disposition form dates concentrated in the week before the audit, making the records clearly unrealistic.
2. Grading as a Formality: All nonconformities are labeled as "general," and A level safety defects are treated as C level and released by the inspector within the shift, potentially leading to major quality incidents if they escape.
3. Review Meetings as Status Updates: In MRB meetings, the Production Department reports progress, and the Quality Department urges closure, without substantial discussion on the nature of defects and disposition methods. Resolutions are vague, such as "handle as appropriate," making them unexecutable.
4. Routine Concession Acceptance: Frequent concessions are made with the rationale "customers won't notice," without customer approval, technical assessment, or proper documentation, leading to concentrated issues at the customer end.
5. Rework Without Traceability: Reworked items are directly stored based on rework records without re-inspection. The same product is repeatedly reworked several times and treated as new, with no reliability assessment.
6. Sorting as a Substitute for Improvement: The same defect is continuously shipped out through sorting for months without improving the source process or tool life. Sorting labor hours are counted as normal, and the site has accepted "this process must be sorted."
7. Scrapped Items Re-entering the System: The scrap area is not locked, and scrapped items are not destructively processed, leading to internal personnel taking them back as conforming items or selling them as "end-of-line" items, posing legal and ethical risks.
8. Oral Customer Agreement: Items are released based on a customer's phone call saying "send it first," without written documentation, dates, or contact persons. If the customer denies it later, the enterprise has no evidence.
9. Data Not Linked: The nonconforming register is recorded in detail, but no Pareto or trend analysis is conducted. Data from incoming and process inspections, internal and customer ends are managed separately, and the management review input is only a general statement like "overall quality is stable."
10. Overdue Accumulation Without Management: The isolation area has accumulated dozens of batches of nonconforming items for years, with ledger and physical item discrepancies. The responsible department changes, and no one claims responsibility, leading to "zombie nonconforming items."

Hang the red card first, then review, and re-inspection completes the process

Knowledge code: 2.3.1

Version: v20260809

Author: QTank QTank is dedicated to providing systematic professional knowledge, methodologies, and practical tools for quality management practitioners, helping enterprises continuously improve their quality capabilities.