SBS - The best value in QMS software

Numbers that will help us understand what the Cost of Rework is

G

Gwyneth13

#1
Am new to this and hope you can help!

Am trying to find numbers that will help us understand what the cost of rework is for a problem that shows up later in the product lifecycle as opposed to what the cost would be if the problem were identified up front. Any case studies would be appreciated.

Am finding a lot that states it's better to find a problem up front but need to quantify this.

thanks
 
Elsmar Forum Sponsor
S

Sturmkind

#2
Hi, Gwyneth13 and Welcome to the Cove!

If the definition of rework includes the cost of containment, scrap, line/equipment configuration, as well as power-source reconfiguration the cost can be moderate to extraordinary. Some can be fixed, some cannot.

A case in point was a company site that did extensive resistance, MIG, and spot welding who did not execute a proper or complete full site audit and usage plan. The plant had 15 fairly sophisticated robotically run or assisted weld cells.

The cost in scrap and customer imposed 3rd party containment escalated over 5 years to an unacceptable 12% scrap rate. A formal review of their scrap and maintenance downtime records revealed that there could be a special-cause operating within the system. A review of the entire site and a 3 day review of operations revealed that every day at ~10:00 a company co-located on their power grid fired up three large compressors. This drew power from the system allowing the weld cells to produce cold welds for 1-3 cycles each day. The corrective action was to pay for a separate power feed for several hundred thousand dollars. Scrap dropped to 2%, most of which was due to changeover, setup, and adjustment.

A woeful tale is of a plater who entered bankruptcy. The scheme to avoid a facility expansion by compromising on an unreliable (but cheaper) reconfiguration of the rack overhead conveyor system resulted in excessively high scrap (20-52%), frequent rack crashes (conveyors were too steeply descending into a very tight turn angle) causing excessive diverted labor. Cost to fix? A few million dollars. Result? Bankruptcy and the negative effect to the community of a few hundred unemployed workers.

Another example that is readily available are the explosions of the U.S. Space Shuttles. Recall the defective Morton-Thiakol O-ring design & environmental interface?

On the other hand, in early August 2010 we received full PPAP approval for our launch of a truck front bumper system that has required no major changes to the cells, the production process, or the design. This was because we worked closely with our customer on the design and with our manufacturing planning people, our customer plants, and our production folks. Structural integrity for this bumper is dimensional fidelity to nominal for 98% of the product at +/-2.5mm on a tolerance of +/-3mm.

Hope this helps!
 
Last edited by a moderator:
R

Request 20110311

#3
Am new to this and hope you can help!

Am trying to find numbers that will help us understand what the cost of rework is for a problem that shows up later in the product lifecycle as opposed to what the cost would be if the problem were identified up front. Any case studies would be appreciated.

Am finding a lot that states it's better to find a problem up front but need to quantify this.

thanks
If you have quantified the man-hours spent, and other costs associated for each of the stages of your production cycle, it's pretty simple to show the cost of catching something early on vs. later in the process.

I.e. if you have to rework and you catch the need to do so at step 3 of 10, you only have to repeat at most steps 1, 2, and 3. If you find a need to rework at step 8 of 10, you see where this is going. Bear in mind that such an analysis only tells part of the story too. There are potentially added costs with respect to delay of future lots of product, with possible staff overtime, with a need to re-evaluate logistic concerns, shipping issues, storage concerns - the severity of those sorts of issues depends on how closely you run to your logistical capacity, but they need to be considered nonetheless.

As for case studies, I just googled "rework cost case studies" and the third link was this: http://www.fengconsultants.com/096-P-Feng.pdf

I don't know if that linked paper is actually a good read or not, didn't have time to read it. However it looks, after a very brief skim like it might be a decent discussion for you.
 
G

Gwyneth13

#4
Thanks for the tips! However, I realize that I wasn't completely clear but we're looking for percentage numbers to use as benchmarks for our business. I've come across references to Philip Crosby but no hard stats except a guess I found posted on rodentregatta.com that "the cost of rework in companies was 25% of sales for a manufacturing business and 40% of expenses for a services business."
 

Jim Wynne

Staff member
Admin
#5
Thanks for the tips! However, I realize that I wasn't completely clear but we're looking for percentage numbers to use as benchmarks for our business. I've come across references to Philip Crosby but no hard stats except a guess I found posted on rodentregatta.com that "the cost of rework in companies was 25% of sales for a manufacturing business and 40% of expenses for a services business."
You should avoid generalizations of uncertain provenance in trying to determine what something costs for your company. There is no one-size-fits-all, and if you're going to come up with a realistic number or percentage, you'll have to dig into your own processes and see what's going on.
 
G

Gwyneth13

#6
You're absolutely correct but as I stated it's for benchmarking purposes. We're doing our own calculations and want to compare them to others to see how we stack up.
 

Colin

Quite Involved in Discussions
#7
Last edited:

Jim Wynne

Staff member
Admin
#8
You're absolutely correct but as I stated it's for benchmarking purposes. We're doing our own calculations and want to compare them to others to see how we stack up.
There's no good reason to think that numbers you get from other companies, especially aggregate numbers, will be honest or accurate. All companies want to be seen in the most favorable light possible, and most will prevaricate to that end. The only worthwhile objectives are those that have been established as a result of a conscientious effort to determine your own company's capability, and the variation that prevents it from a achieving an optimum level of performance.
 
Thread starter Similar threads Forum Replies Date
C Requirement to link Quality Manual to ISO 9001 clause numbers? ISO 13485:2016 - Medical Device Quality Management Systems 13
M Proof of distribution - FedEx/UPS tracking numbers Manufacturing and Related Processes 2
D Partial FAI - AS9102 - One single drawing has 10 part numbers AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 5
I Reissuing documents due to missing version / issue numbers Document Control Systems, Procedures, Forms and Templates 3
JoshuaFroud Serial numbers and labelling when sharing device components ISO 13485:2016 - Medical Device Quality Management Systems 1
B AS9102 - Completing Partial FAI's for Baseline Part Numbers AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 1
C FDA Medical Device Label Requirements - serial numbers Other US Medical Device Regulations 2
T NAFTA request for form with no part numbers showing Supply Chain Security Management Systems 0
L What are the rules on significance of digits in numbers in IEC/ISO standards? IEC 60601 - Medical Electrical Equipment Safety Standards Series 5
M Quality Policy - Standards and reference numbers ISO 13485:2016 - Medical Device Quality Management Systems 14
M Accept/Reject (Ac/Re) Numbers (ISO 2859-1) Confusion Inspection, Prints (Drawings), Testing, Sampling and Related Topics 3
Sam Lazzara GS1 introduces Global Model Numbers for Medical Devices Other Medical Device Regulations World-Wide 2
N IVD Lot Numbers and Expiration Dates - 21 CFR 809.10 Other US Medical Device Regulations 3
chris1price What are the Scope Numbers on ISO 13485 Certificates ISO 13485:2016 - Medical Device Quality Management Systems 2
S Where to Find DEV and DFE numbers on FDA Website Other Medical Device and Orthopedic Related Topics 3
T Policy or Good Guidance for a Traceability Decision Tree (Serial and Batch Numbers) Misc. Quality Assurance and Business Systems Related Topics 4
T Can 1 TS 16949 certificate be associated with 2 different Duns numbers IATF 16949 - Automotive Quality Systems Standard 2
T Control numbers for records Document Control Systems, Procedures, Forms and Templates 10
M Lot Numbers of Plastic Disposables in an LDT (laboratory developed test) ISO 13485:2016 - Medical Device Quality Management Systems 6
M Bioburden numbers and ECA gloves 21 CFR Part 820 - US FDA Quality System Regulations (QSR) 1
S Document Numbers (Identification) on Forms (AS9100) Document Control Systems, Procedures, Forms and Templates 15
F What is the scope for "Total Numbers of Employees on site" per ISO/TS 16949 ? IATF 16949 - Automotive Quality Systems Standard 4
W Humor in numbers Funny Stuff - Jokes and Humour 4
M Determining c=0 AQL numbers Misc. Quality Assurance and Business Systems Related Topics 3
M Document Identification and Control Numbers ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 4
Jim Wynne Some Xerox Copiers Randomly Change Numbers in Scans Coffee Break and Water Cooler Discussions 14
R Accurate Quarterly Inventory Turn Numbers Quality Manager and Management Related Issues 3
A Calibration Service Suppliers refuse NIST reference numbers on C of C General Measurement Device and Calibration Topics 21
Q Document Numbers for Same Document but in Different Languages? Document Control Systems, Procedures, Forms and Templates 4
E Must Patent Numbers be Shown on Product Labels? Other Medical Device and Orthopedic Related Topics 18
E RSD (Relative Standard Deviation) Calculation for two series of numbers Statistical Analysis Tools, Techniques and SPC 4
L Product numbers & sources for ASTM D3359 adhesive tape Inspection, Prints (Drawings), Testing, Sampling and Related Topics 1
J Do production jigs require tool numbers? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 4
D What records should have form numbers? Quality Manager and Management Related Issues 6
C Changing Document Names/Control Numbers and Obsoleting Document Control Systems, Procedures, Forms and Templates 5
A FD&C dueling banjos (conflicting section numbers) Other US Medical Device Regulations 6
M Systems for Serial Numbers, Batches and Catalogue Numbers Other Medical Device Related Standards 3
D Rounding Numbers - Adding numbers in Excel - I want the average Excel .xls Spreadsheet Templates and Tools 3
I Switching Serial Numbers on Repaired Medical Devices Other US Medical Device Regulations 2
T Registrar Question/Audits/Consultants/Clause numbers/minors and majors Registrars and Notified Bodies 25
R Reference Numbers or Titles for a Nonconformance Report? Nonconformance and Corrective Action 6
K Serial Numbers on Authorised Release Certificates AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 6
Antonio Vieira Do you still keep old numbers of Quality Progress in paper format? ASQ, ANAB, UKAS, IAF, IRCA, Exemplar Global and Related Organizations 9
P Increasing Numbers of Harmonised Standards Other Medical Device Related Standards 1
V Is it OK to put 2 Part Numbers on 1 PSW (Part Submission Warrant)? APQP and PPAP 12
V JCI standard numbers of pieces required for Capability Study? APQP and PPAP 2
S Do you assign your own part numbers to customer's parts? Manufacturing and Related Processes 10
J Annual PPAPs - Keeping Up with Hundreds Of Customers And Hundreds Of Part Numbers APQP and PPAP 12
ScottK Do the numbers 13496 or 16937 mean anything to you? Other Medical Device Related Standards 14
Marc Numbers Genius at work: 12-year-old is studying at IUPUI World News 1

Similar threads

Top Bottom