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General Methodology and ROI of Skip-lot Data Collection

Today’s manufacturing industry demands that companies devise creative solutions to the problem of the rising cost of nonconformances and corrective actions. Integrated quality management systems deploy a variety of statistical process control tools to improve the efficiency of inspections. Skip-lot sampling serves as a cost-effective technique to manage the cost of performing frequent product inspections. As a powerful tool within a real-time quality management system, the ability to collect data to optimize skip-lot sampling parameters affords manufacturers the luxury of lowering inspection expenses.7570_resource-img-library_skip-lot-data-collection-general-methodology-and-roi-paper_iqs

Skip-lot Methodology

Performing thorough and accurate inspections is an integral component of any quality management system. No one-size-fits-all solution exists to standardize inspection processes; each manufacturer must tailor inspection protocols to suit a particular industry vertical. The task facing today’s quality management departments is to leverage IT resources that integrate legacy data into new data collection software modules.

Manufacturers that operate multiple sites and conduct business with a large number of geographically disparate suppliers understand the scope of the challenge of inspections. In an ideal manufacturing industry, companies would inspect each product to ensure quality; however, the reality of the situation is far different. Manufacturers today are devising strategies to perform at a higher level with fewer resources at their disposal. Skip-lot inspections are one such technique to mitigate the high cost of inspections.

The basic assumption behind skip-lot is that continuous lots should be of high quality. In a skip-lot inspection, quality management personnel only inspect a small percentage of very high-conforming lots. Once companies develop a reference plan based on historical data of consumers’ risks, producers’ risks, alpha risks and beta risks, inspections proceed lot-by-lot. However, once a specified number of consecutive high-conforming lots have passed inspection, companies only inspect a fraction of subsequent lots at random. This skip-lot process continues until a lot does not pass, which then reverts to lot-by-lot inspection until products pass the skip-lot threshold again.

Serially inspecting each received lot is a time-consuming endeavor, especially if lots are of a large size. Raw materials are one example of an ideal candidate for skip-lot techniques. Products with critical parameters may still require a more thorough inspection process, but skip-lot inspection protocols serve as a way to offset the cost of inspecting high-conforming products. Conducting business with a supplier of proven record is another ideal condition for skip-lot strategies.

Skip-lot ROI

Deploying skip-lot strategies is impossible without the ability to collect verifiable process data and compare it against historical data. Several of today’s integrated quality management systems collect skip-lot data automatically and dispense corrective actions reports accordingly. The ROI of such automation is arguably one of the most attractive features of these skip-lot data-collecting modules.

From the perspective of operational expenses alone, the cost of inspections encompasses labor, materials, overhead and appraisals. In addition, the cost of nonconforming products only adds to the burden that inspections place on quality departments in today’s manufacturing industry. Skip-lot provides a way to mitigate these costs by lowering the amount of labor and materials required to perform inspections via the outdated “dock to stock” method.

Industry statistics show that an ROI of approximately a year is possible after deploying systems that utilize skip-lot methods. Savings thereafter continue to lower the overall cost of quality, improving quality by utilizing the vast amount of data collected via skip-lot modules. If manufacturers truly wish to transition to a lean manufacturing philosophy that seeks to eliminate waste and add value, skip-lot data is essential.

Integrated quality management systems in general have a highly favorable ROI, so focusing on the payback benefits of skip-lot only amplifies this quantifiable fact.

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