Defect rates refer to the percentage of products or services that fail to meet quality standards. This measurement is crucial in manufacturing and service industries, as it helps organizations identify areas for improvement. A lower defect rate indicates better quality control and customer satisfaction, while a higher rate may signal the need for process adjustments. To calculate the defect rate, divide the number of defective items by the total number of items produced, then multiply by 100. For example, if a factory produces 1,000 units and 20 are defective, the defect rate would be 2%. Monitoring defect rates can lead to enhanced efficiency and reduced costs for companies like Toyota or Apple.