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ERP
Benefits of this approach:
■ Clear traceability for labor impact
■ Evidence to support root cause investigations
■ Reliable data for process improvement and operator training
Capturing material costs
Top-level losses: When entire units fail, the ERP should support‘ splitting’ clean yield from failed units. Any inventory adjustments for scrapped items are tagged to the relevant failure code. Sub-level costs: When replacing failed components, overages and part requests outside the BOM must be linked to the same failure record. This creates a clear picture of where extra material costs come from, whether due to defects, supplier issues, or process instability.
Incoming inspections of raw material
Incoming inspections of purchased material help prevent defective material from entering production, but they carry their own costs such as inspection labor, handling, and in some cases, delays or scrapping of unusable stock. When incoming inspections reveal defects, the associated costs should be tied back to the supplier and tracked within the same system, creating a closed loop that informs both purchasing decisions and supplier scorecards.
Reporting the cost of quality
Once labor and material data are tied to inspection failures, the ERP can aggregate them into a single‘ failure cost’ report. These reports give leadership a clear financial picture of how quality issues affect margins.
Figure 2: Sample of assigning a work segment to a labor code for rework after the failed inspection and failure codes are logged. Time can be tracked live or by adding time retroactively in a batch.( Source: Cetec ERP) manufacturing-today. com 25