The term Technical Debt is sometimes confused with the term Hidden Factory, but they are not the same thing.
Technical Debt is a term coined by Ward Cunningham, the programmer who also created the first wiki. Technical Debt is a concept in software development that suggests a rework cost will probably be needed in the future to compensate for an earlier decision to use coding or architecture shortcuts.
While Technical Debt doesn't always need a resolution, the Hidden Factory is added onto by inaccurate work that must always be corrected. This need to repeat steps to get it right is quality debt.
Quality Debt, or "Hidden Factory"
Often, project problems are not discovered until later in the production or implementation steps, or in the service cycle.
Studies conducted in 1999 and 2004 underscore the reality of the hidden cost of problems discovered later. The studies found that as defects are created in a workflow, they become exponentially more expensive to fix the further down the life-cycle they travel. This means that a defect created in the Requirements phase is relatively inexpensive to fix if found during that step in the process.
However, once the team has coded the wrong requirement, the same defect becomes more expensive to fix. If that same problematic requirement is found during testing, then more people are involved and the rework consumes more company resources. This effect, called "Quality Dept." or the "Hidden Factory" is accumulated all the way down the value stream to where the customer is impacted.
The purpose of a quality program like The Stable Framework™ is to empower employees to find potential problems within the same step in which they occur, instead of later where it becomes exponentially expensive.