Cost of quality tradeoffs in manufacturing process and inspection strategy selection

Abstract

In today's highly competitive markets manufacturers must provide high quality products to survive. Manufacturers can achieve higher levels of quality by changing their manufacturing process and/or by product inspection where a multitude of different strategies are often available. Each option has its own cost implications that must also be taken into account. By reconciling the competing objectives of quality maximization and cost minimization, a cost of quality approach serves as a useful framework for comparing available manufacturing process and inspection alternatives. Still, any rigorous comparison requires both a metric as well as a profound understanding of cost of quality tradeoffs. The cost of quality tradeoffs in manufacturing process and inspection strategy selection are examined through a probabilistic cost of quality model explored analytically using a sample set of fundamental inspection strategies (reinspect rejects, reinspect accepts and single inspection) and applied to the case of electric vehicle battery pack assembly. From an expected value point of view a series of parametric sensitivity analyses reveal that complex tradeoffs between manufacturing process, inspection, internal and external failure costs determine the optimal manufacturing process and inspection strategy combination. In general, reinspect rejects minimizes internal failure costs, reinspect accepts minimizes external failure costs and single inspection lies in between while minimizing inspection costs. This thesis illustrates the fact that results are scenario specific and depend on product cost-, manufacturing process and available inspection method attributes. It is also observed that manufacturing process improvement often coincides with a need to change inspection strategy choice, thereby indicating that manufacturing process and inspection strategy selection should not be performed independently of each other. This thesis demonstrates that the traditional expected value approach for evaluating cost of quality implications of manufacturing and inspection is often misleading. Decision tree formulations and discrete event simulations indicate that cost of quality distributions are asymmetric. High internal- and external failure costs, manufacturing process non-conformance rates and inspection method error rates are contributing factors. The alternative metric of expected utility captures decision makers risk aversion to high cost outliers and changes the criteria for optimality and favors inspection strategies and manufacturing processes that minimize external failure events with increasing risk intolerance. In the examined case of electric vehicle battery pack assembly both material- and external failure costs are very high. Analytical and discrete event simulation results indicate that for the given welding process the inspection strategy that minimizes external failure costs is optimal from an expected cost point of view as well as at high degrees of risk aversion. This result is shown to be sensitive to parameters driving the cost and probability of external failure events.