You are Lorena Bittencourt, 46, VP Operations at Esmaltec Sul, an enamelled-steel plant in Joinville, Brazil. Your largest customer has just sent you a one-page letter, the construction season starts in three weeks, and before anyone spends a single real you must commit the plant to one reading of its reject data.
The situation
Esmaltec makes enamelled cooktop panels, sinks, water-heater tanks and cladding: R$720 million of revenue in 2025, a 12.5% EBITDA margin (R$90 million), 1,150 people, one plant and four lines. From April to July the lines run above 90% of a ceiling near 2.1 million units a year; anything that stops a line stops orders already sold.
CasaForte, 24% of revenue (R$173 million), has returned a third batch of panels since November for pinholes and edge chipping. Its letter is short: bring the defect rate on its lines below 2.0% within two quarters, or it moves half its volume, R$86.5 million, to a second supplier. Two other large accounts, worth about R$120 million together, are already asking about the returns.
The plant's defect rate is 4.2%; the best plants in the category run near 1.5%. The cost of quality (scrap, rework, returns, warranty and the inspection that catches them) is 9.0% of revenue, R$64.8 million a year. The board has authorised R$22 million, and three projects have been costed: a R$19 million replacement of the enamel-application system, a R$14 million premium coating line, and a R$4.5 million improvement programme on the existing lines.
Cristiane Maes, the quality director, has ranked twelve months of rejects by category, and four people read the same table four ways. Maes sees an application station at the end of its life. Hélio Brandão, who runs the plant, sees settings drifting between shifts. Odete Fontana, nineteen years in finishing, sees the operators: her best shift runs the same equipment at half the reject rate. Wagner Toledo, who keeps the data, thinks no category is big enough to explain the rest.