Manufacturing disruption costs due to quality loss

Purpose – Many authors have suggested that disruption and associated costs result from poor quality performance in manufacturing. The purpose of this paper is to define and quantify the disruption costs associated with a simple manufacturing scenario using a simulation approach. Design/methodology/approach – A manufacturing cell incorporating inspection and rework was simulated, and a validation exercise carried out. Using results from the simulation study, the authors then formulate the concept of a cost category for disruption cost, which is compatible with the traditional prevention‐appraisal‐failure (PAF) model for quality costs. Findings – Comparative graphs of disruption costs and PAF costs elements are presented. The simulated disruption cost is compared with these traditional costs categories, and found to represent a significant additional cost at higher levels of non‐conformance. Research limitations/implications – The results presented in this paper are derived from a discrete‐event simulation exercise, using a model of a simplified generic manufacturing cell. They are believed to be indicative of costs that would occur in practical situations, but are not validated with empirical data. Further work would include such validation. Practical implications – This is a theoretical paper, which attempts to extend a useful and well established cost model that has been widely accepted in industry. Originality/value – The originality of this paper lies in the definition of the concept of disruption cost, as a separate category of quality cost. The simulation work indicates the potential size and behaviour of the disruption cost, compared with the traditional PAF costs categories.