Jump to content



Yield is defined as the ratio of the total units delivered defect free to the customer over the total number of units that entered the system.


First Time Yield


First Time Yield is the ratio of the units of a product that pass through a process step the first time without rework over the number of units entered into the process step.


Hidden Factory


Hidden Factory is a term that is used to define the non-value adding activities in an operation or a process. E.g. reworks, handoffs or any of the 7 wastes. These activities reduce the quality of the product or create inefficiencies in the process that are not known to the process owners. As the name suggests, these activities are hidden from the view. One would need to learn to identify and understand wastes in a process and then be able to remove them. Lean Six Sigma focuses on unearthing these 'Hidden Factories'.
Alternatively, hidden factory can also be defined as the additional good quality products that would theoretically have been possible if the energy and time spent on non-value adding activities was directed towards making good quality products.



An application oriented question on the topic along with responses can be seen below. The best answer was provided by Vastupal Vashisth on 7th September 2018. 





Q. 90   Rolled throughput yield (RTY) is the probability that a single unit can pass through the entire process without defects. Can you multiply the individual throughput yields at each process step to obtain the overall, rolled throughput yield? Since, many organizations focus more on “What gets outside the door”, how does RTY (as a metric) highlight the so-called “hidden factory”? Give examples to support your response.


Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

Share this post

Link to post
Share on other sites

5 answers to this question

Recommended Posts

  • 0

Yield of any process is output divided by input but here we are talking about Rolled Throughput Yield. Before understanding RTY,  we should know about First time Yield.

FTY( First Time Yield) is the common way to calculate process yield or is the probability of defect free output for a process. It considers only the set criteria at the end of the Process. It does not capture the how many defects were found and corrected within a single unit during the process flow.


Now the Hidden Factories come into picture and FTY will not detect the effect of Hidden Factories. It will typically indicate that a process is performaing better than it really is.


Rolled Throughput Yield ( RTY) is the probability that a single unit can pass through a series of process steps free of defects.

RTY is defect sensitive - which means that instead of being based on yield on produced unit, it uses the number of defects found at each process steps. 

So mathematically we can say that we can multiply FTY of each process to find out overall RTY.

When a process steps produces defects and its yield will be less than 100 percent even if defective output are corrected, its yield will remain same. and to correct defective output is separate process.


RTY = Yield of process step 1 * Yield of process step 2....Yield of Process step N.


It is Ideal for any process to produce its products without any defects or without any rework.  But it is always there that defects are repaired and ok products given to customer by not seeing the cost of rework because customer should be happy and many organization focus more what gets outside the door. and while calculating FTY we are not able to recognise the hidden Factories but if we calculate RTY , it quantifies the effect of inefficiencies  found throughout the process and its steps to finish it.


Lets take a example to understand more that how RTY highlights about Hidden Factories:


for example any process is completed in two steps and have input of 100 parts and output of 100 parts. 

so FTY indicates a good process with no defects getting to customer because there is 100 input and 100 ouput and organization is very happy to see this a s100 % output. FTY does not capture any effect in the process steps.


100 Input --Process Step A --- Process Step B ---- 100 Output

                      ( Yield: 0.95)           ( Yield : 0.95)

  ( Remaining defective Reworked and again processed in both steps)


FTY = 1 or 100%

RTY= 0.95*0.95 = 0.90 or 90%


so we can see that 100 in and 100 out , a good process as per FTY and we are not aware about rework done. FTY does not capture this 5% rework done in every step. So in one way 10% of the output is reworked to keep customers from getting defects. So Process has to do enough work to be done to make 110 outputs to produce 100 defect free products. The two hidden factories here exist because of defect generation at each step but organization or process owner wants for the customer to receive defect free outputs. So the rework which has been done for those 10 defective outputs will show up as process's cost of poor quality.


So RTY on the other hand captures the work done by two hidden factories, instead of a process in 100% compliance as described by FTY, we can say that RTY describes that a Process that wastes 10% of its resources.

So RTY points the way to where improvement efforts are needed and highlights "hidden factories".


Share this post

Link to post
Share on other sites
  • 0

RTY as a metric help business to identify Hidden factory , as customer is not ready to pay for naturally create waste in process which is not value added for them as a final product.

Share this post

Link to post
Share on other sites
  • 0

Yes, by multiplying the individual throughput yields at each step, one can obtain the overall, rolled throughput yield.


For example, in primary source verification industry, the customer is only concerned with the end result whether the report of his applicant is Positive or Negative. The detailed report contains other important information as well like "who" was contacted to obtain the verification from certificate issuing authority.


Now let's say that the person responsible to authenticate verification of an applicant is HR of the company however person got the document authenticated from company's senior manager which in this case is not the right person.  


In order to make sure that verification process step yield is correct, we introduce a quality check stage post verification stage who is responsible to check whether verification conducted is as per the required standard otherwise re-verification is required to be conducted by that same verification performer. 


Customer is not concerned with the number of quality rejects or rework done. Customer is concerned with the end product i.e. final verification status (Positive or Negative). Hence all the quality rejects and rework is "hidden factory" to the customer.


To customer yield is final status (Positive or Negative) ("what goes out the door") but if we take into account all the rework done to correct the defects then overall yield is less than 100 percent ("hidden factory").


Hence number of quality rejects will decrease the verification process step yield and thus overall rolling throughput yield and help to calculate the "hidden factory".

Share this post

Link to post
Share on other sites
  • 0

Rolled Throughput Yield (RTY) is calculated by multiplying the yields for each process. Let me illustrate an application of this metric using an example. XYZ company manufactures friction material that goes into auto disc brake pads. The processes under consideration start with the Mix, which is subjected to pre-form process, and then compression molding and then grind finish. Let's assume that the standard weight of mix required for each pad is 100 gms. If 10000 gms of mix is fed into the processes, the yield for each of the 3 processes, Preform, Comp. molding and Finishing are tabulated as below:




The yield for each process is calculated in the last column, and the resulting RTY is 0.8, which means that when quantity of mix equivalent for 100 pads was fed into the system, we ended up getting only 80 pads. The loss of yield can be categorized into 2 categories.

1. Due to the losses due to spillage, gaseous waste, finishing dust (SGF)

2. Due to rejections that were either scrapped or reworked. (SRW)




The RTY brings out the practical yield from the process at large. If we take a six sigma project to improve the RTY (say from 0.8 to 0.9), it will lead to the revelation and analysis of the 'Hidden Factory' in terms of Scrap and Rework handling that is going on in between the processes. Further probing would lead to a question about how much of SGF wastage can be reduced.


It is likely that the factories will have practices by which Reworked material for a particular process will be fed into the next process. Similarly the wastage due to spillage may be retrieved and re-routed to the preform process. The grind dust may be collected and recycled at permitted proportions into the molding process. Assume around 2% of the SGF and 8% of the SRW are re-introduced into the process, the resulting yield (if we didn't consider RTY), would have worked out as 90%, and we would have missed out on exposing and quantifying the "Hidden Factory" and the opportunity for improvement 


Share this post

Link to post
Share on other sites
  • 0

Great attempt by everyone and very neatly explained that the customer will not be willing to pay the cost due to the "hidden factories". The chosen best answer is that of Vastupal for providing the explanation in great detail. Must read Venugopal's answer to understand with the help of a clearly outlined example, complete with calculations.


Keep it up!

Share this post

Link to post
Share on other sites
This topic is now closed to further replies.
Sign in to follow this  

  • Who's Online (See full list)

    There are no registered users currently online

  • Forum Statistics

    • Total Topics
    • Total Posts
  • Member Statistics

    • Total Members
    • Most Online

    Newest Member
  • Create New...