Understanding Type I and Type II Errors in Precision Machining

The impact of statistical decisions on quality.

by David Wynn

Director of Technical Services & Industry Affairs, PMPA

Published September 1, 2025

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In the realm of statistics and quality control, the concepts of Type I and Type II errors are key to understanding how decisions are made and the potential consequences of those decisions. While these terms are often discussed in the context of hypothesis testing, their significance extends far beyond theoretical statistics. Understanding the practical implications in precision machining is important when mistakes are not acceptable in the no-fail industries we serve. 

Defining Type I and Type II Errors
A Type I error, also known as a “false positive,” occurs when a test incorrectly rejects a true null hypothesis. In simpler terms, it means detecting a problem or defect when none exists.

A Type II error, or “false negative,” happens when a test fails to reject a false null hypothesis, or when a test fails to identify a real problem or defect.
In manufacturing and particularly in the precision machining industry — where accuracy and tight tolerances are critical, the distinction between these two types of errors can mean the difference between success and failure.

Type I Errors in Precision Machining
Imagine a quality control inspection where every part is measured to ensure it meets strict specifications. If the inspection system commits a Type I error, a part that meets all requirements is incorrectly deemed defective and rejected. While no faulty part reaches the customer, it also means waste. In our shops we strive to eliminate waste — wasted material, wasted operator time, wasted machine time — which all increase production costs. Reducing the number of Type I errors in our shops helps us preserve the value that our performers create.  

Type II Errors in Precision Machining
A Type II error, on the other hand, occurs when a defective part passes inspection.  This is the worst possible scenario in our shops. Parts that have been 100% inspected but defective parts still make it to the customer. In no-fail industries, this can be especially dangerous. A defect might lead to mechanical failure, safety hazards or even death.

Consider a scenario where a faulty gage allows undersized parts to make it to a medical device manufacturer making heart valves. The repercussions could be disastrous. If a Type II error occurs when the valve is tested at the customer, it could lead to it being installed in a patient. 

One answer to this problem is tightening our acceptance criteria; however, this would increase Type I errors and result in more parts that meet customer specifications being rejected. Although I would much rather have parts that meet spec be rejected than the non-conforming parts making it to the customer, there must be balance. The goal is zero percent Type II errors and as few as possible Type I errors.  In practice, achieving the goal of zero Type II errors means that we can never achieve zero Type I errors. The challenge is to create systems that reduce variation. Statistical process control is the best solution in our toolbox to provide scientific actionable data to reduce variation.

Type I and Type II errors are not just abstract statistical terms. They are concrete realities that affect operational efficiency, product quality and profitability. Understanding and managing these errors is essential for our shops to work to eliminate mistakes. Continuous improvement involves educating ourselves on the potential for problems and eliminating them before they happen. When we understand how we can fail, poka-yokes (mistake-proofing) can be added to the process reducing our potential for failure. 

Author

David Wynn is the PMPA Director of Technical Services & Industry Affairs with over 20 years of experience in the areas of manufacturing, quality, ownership, IT and economics. Email David

Unexpected Takeaways from the 2025
SID Congress

Seeing our industry through international eyes.

by Miles Free III

Director Emeritus, PMPA

Published August 1, 2025

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PMPA is a member of the international precision machining industry association Syndicat International du Decolletage (SID), a group of eight global associations from Europe and the U.S. Every two years, each association hosts a congress, inviting member companies to tour local manufacturing facilities and experience their culture. PMPA was proud to be the host of the 2025 SID Congress. Held June 8-12 in Chicago, the congress brought together 150 delegates and partners to visit precision machining shops, suppliers, training institutes in Chicago and Milwaukee — as well as tourist venues worthy of an international audience.

Here are my unexpected takeaways from this event:

• The abundance of available floor space in U.S. facilities was unanimously cited as “shocking” by our visitors. Aisles in U.S. factories were said to be “many times” wider than the European practice.
• Tariffs were neither polarizing nor the source of animosity between delegates — regardless of country. Comparison of the costs of business inputs — labor, materials and social costs — gave us all plenty of insights into the most important factors affecting our profitability. What was problematic was the difficulty of managing commercial uncertainties due to the tariff process.
• Social costs for the workforce differed substantially by country, but their increase by all countries reporting made a compelling case for increasing investment in automation, lightly attended operations and buying higher quality materials to minimize production complexity and higher labor inputs.
• Demand for talent and the need to grow the manufacturing workforce was universal and a major concern by every delegation regardless of country. All delegates were surprised at the claim — supported by facts — that now is actually a positive and underappreciated opportunity for our investment in automation, technology and training.
• While many of the shops we visited had similar processes and technologies, each made a convincing case that it was their different management approach and workforce expertise that provided their advantage and success.
• The collaboration, cooperation and sharing of the PMPA members was seen initially as “an incredible fantasy.” But by the end of our shop visits, our visitors agreed that the sharing between “competitors was unlike anything they had ever experienced and undeniable in its strength.” (This is how we explain PMPA member shops’ better-than-benchmark performance.)
• The delegates all shared how welcomed and comfortable they felt, unlike the image of the U.S. that they get from their media. 
• Many attendees were surprised by the apparent abundance they saw on the tours — whether the amount of dedicated greenspace on our industrial properties, the size of homes or the sheer abundance of supplies and products readily available in our shops.
• After five days of networking, conversations, presentations and meetings to share data and best practices, many of our visitors were using the term “better together” to describe their experience at SID 2025. Whether the wide expanse of manufacturing space available, the automation and technologies they witnessed — or the delight at learning how to grill a steak “American-style” at Weber Grill or sample the tastes of Chicago. 

SID 2025 was a singular opportunity to see, feel, taste and learn just what in the world our industry is up to. Better together — sharing, networking — we couldn’t agree more. It was a pleasure to host, participate and learn. Despite the anger in the world news, we found that people with shared interests and mutual needs had plenty of good will — and sharing of our data made our mutual future success much clearer.

Author

Miles Free III is the PMPA Director Emeritus with over 50 years of experience in the areas of manufacturing, quality and steelmaking. Miles’ podcast is at pmpa.org/podcast. Email Miles