The good, the bad and the ugly: Quality on an assembly line

Firms can handle defects that occur on an assembly line in a number of different ways. Traditionally, defective units were either scrapped or sent to a separate repair station. With the advent of Japanese production methodology in the U.S. line-stop buttons were introduced to assembly lines; when a defect was discovered, the assembly line was stopped and the defect was repaired immediately (on-line repair). We develop a relatively simple model of the assembly line to compare these alternate strategies and derive some qualitative insights into this problem. Our primary performance measures are the production throughput rate, the work-in-process inventory level (WIP), and the field defect rate. We use both queueing theory and simulation to estimate these measures for the different strategies. Of course, not all defects can be detected. The presence of imperfect inspection complicates the analysis, requiring us to determine values for probabilities of defects and inspection errors that are consistent with the factory that gave rise to this investigation. Two standard advantages of on-line repair are faster on-the-spot repairs and a heightened awareness of the consequences of defects, resulting in a drop in the defect rate. But even after adjusting for the advantages, we find that in many instances on-line repair results in a lower throughput rate than the traditional off-line repair shop. The most effective strategy subdivides the production line and uses WIP buffers between the segments to limit the propagation of line stoppages. Adding small amounts of WIP substantially increases the output of the production line.