Cost of Poor Quality in Assembly

The cost of poor quality is the total of everything spent because the process did not produce the right result first time: rework, scrap, inspection added to catch defects, warranty and the engineering time spent investigating. It is usually much larger than the accounts show, because much of it is absorbed in overhead.

Making it visible is the first step to reducing it, since a cost that is distributed is not managed by anyone.

What Belongs in the Cost

The visible items are the scrap value, the rework labour and the additional inspection. The hidden items are the extra inventory, the expedited freight, the engineering time and the customer goodwill.

A model that includes only the visible items understates the cost and supports the wrong decisions, particularly when a cheap prevention is compared with an expensive failure.

Prevention, Appraisal and Failure

The classical division is prevention, appraisal and failure, and the balance between them is the practical lever. Money spent on prevention reduces both appraisal and failure.

Most organisations spend the largest share on failure and the smallest on prevention, which is the sign of a reactive quality system.

Rework as a Hidden Cost

Rework consumes labour, machine time and often a second pass through a thermal process, all of which carry risk. A board that is reworked is more likely to fail than one that was correct, so the cost is not only the labour.

Counting rework as a defect is what makes the cost visible, as described for rework and scrap decisions.

Escapes and Their Cost

A defect that reaches the customer costs far more than one caught internally, because it involves the return, the investigation, the sorting and the loss of confidence. The multiplier between the two is large enough that a containment action is almost always justified.

The escape cost should be estimated rather than ignored when a containment decision is made, as described for yield analysis.

Measuring and Reporting

The cost should be reported by product and by cause, so that the improvement effort can be aimed. A single company-wide figure is useful for management and useless for engineering.

The measurement depends on the defect data being complete, which means that rework must be recorded in the same system as scrap.

Reduction Priorities

The largest component of the cost should be addressed first, which is usually the failure category rather than the appraisal one. Reducing inspection without reducing the defects simply moves the cost.

Prevention activities, such as process control, training and design review, have the longest payback and the largest effect, which is why they are the first to be cut in a difficult period and the last to be restored.

Records

The records should link the defect data, the rework and scrap records and the financial figures, so that the cost can be reconstructed rather than estimated.

They belong with the quality records described for defect analysis and with the process evidence described for manufacturing processes.

Process Control and Verification

Documenting the assumption is part of the design work, and a short note on the drawing prevents a question that would otherwise arrive a day later and cost a day of schedule. The process window is set by the narrowest step in the flow, so an improvement anywhere else shows up as margin rather than as yield until that step is addressed.

A short note on the drawing about handling, storage or packaging is often worth more than an extra decimal place on a tolerance. Where a value sits close to a process limit, the drawing should say so, since the shop can then open the process window rather than working to a nominal figure that carries no tolerance.

A stack-up that is drawn rather than described removes most of the ambiguity from a quotation, and it lets the fabricator price the board against the dielectric and copper weights that will actually be used. Where the requirement is not written down, the shop supplies its own default, and the default is chosen for the process rather than for the design.

The measurements that matter are the repeatable ones: conductor width and spacing, annular ring, finished hole size, plating thickness and surface finish are all verifiable on a coupon that travels with the panel.

Checks Before Release

The checks that matter are the ones performed on the product rather than on a sample kept for the purpose, because a coupon that travels with the panel is the only evidence about that panel. Where a requirement can be measured, it should be measured at the point of manufacture and recorded against the board or the lot it applies to.

A parameter that is set once and never re verified drifts, and the drift is usually discovered by a defect rather than by the record. The tooling, the material and the profile form one system, and a change to any of them should be assessed against the other two before it is released.

Where the process window is narrow, the measurement resolution has to be better than the window, or the data cannot distinguish a good part from a marginal one. A record that identifies the operator, the date and the settings is worth more than a record that identifies only the result.

FAQ

Is the cost of quality a financial measure? It is, and it should be built from the production records rather than from a separate survey.

Why is rework often excluded? Because it is absorbed into the labour cost, which hides both the cost and the defect.

What is the largest single item? Usually the escapes, followed by the rework labour on a mature line.

Where should the effort go? Prevention, because it reduces the failure and the appraisal cost together.