got this in an email... #5

Sounds just like where I work.
If a product is not built correctly, machined wrong, welded wrong, etc, the last Production Manager we had came up with these "NCR"s we had to fill out...Non-Comforming Reports.
Complete waste of time as you can't begin to perform the required repaired until all the paper work is done. Which is usually not in the same day.
In reality if the part would just get sent immediately to be repaired, fixed, etc, it saves the company $$$
My supervisor came up with a number one day, that it costs the company something like over $500 in that day just with guys having to take 8 hrs or more to do paperwork when the part could've been fixed in sometimes an hour or so, depending on the part, which costs the company something like $80 on the hour.

We just shake our heads.

Sounds more like a method of tracking errors and accounting for the extra money spent to do the repairs. In today's tight budget business environment you 'd be surprised what you can learn, and save by keep track of cost, frequency, and even the type (human, mechanical, electronic, materials, etc) of error. It gives the company a better focus on where to spend the money for improvement most efficiently.
Once a good error monitoring system is in place it can track a production error for the moment of inception (the work order to produce the product) to delivery to the end user. there are scores of opportunities for things to go wrong, knowing where is the first step to stopping the errors, or minimizing them, instead of just correcting them as they happen. The cost savings might not be apparent in the beginning, but is almost always very effective.

Just as it is in the op. Identify the problem, and correct it, instead of "working with it".