bps-kit 1.0.1 → 1.0.3

package/templates/vault/quality-nonconformance/references/decision-frameworks.md

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-# Decision Frameworks — Quality & Non-Conformance Management
-
-This reference provides the detailed decision logic, MRB processes, RCA methodology selection,
-CAPA lifecycle management, SPC interpretation workflows, inspection level determination,
-supplier quality escalation, and cost of quality calculation models for regulated manufacturing
-quality engineering.
-
-All thresholds, regulatory references, and process expectations reflect quality engineering
-practice across FDA 21 CFR 820, IATF 16949, AS9100, and ISO 13485 environments.
-
----
-
-## 1. NCR Disposition Decision Trees
-
-### 1.1 Universal Disposition Flow
-
-Every non-conformance, regardless of regulatory environment, begins with this decision sequence.
-The flow terminates at the first applicable disposition; do not skip levels.
-
-```
-START: Non-conformance identified and documented
-  │
-  ├─ Is the part safety-critical or regulatory-controlled?
-  │   ├─ YES → Can it be reworked to FULL conformance?
-  │   │         ├─ YES → REWORK with approved procedure + 100% re-inspection
-  │   │         └─ NO  → SCRAP (no use-as-is permitted without formal risk assessment
-  │   │                   AND regulatory/customer approval)
-  │   └─ NO  → Continue
-  │
-  ├─ Does the non-conformance affect form, fit, or function?
-  │   ├─ YES → Can it be reworked to full conformance?
-  │   │         ├─ YES → Is rework cost < 60% of replacement cost?
-  │   │         │         ├─ YES → REWORK
-  │   │         │         └─ NO  → SCRAP (rework is not economical)
-  │   │         └─ NO  → Can it be repaired to acceptable function?
-  │   │                   ├─ YES → REPAIR with engineering concession + customer
-  │   │                   │         approval (if required by contract/standard)
-  │   │                   └─ NO  → SCRAP
-  │   └─ NO  → Continue
-  │
-  ├─ Is the non-conformance cosmetic only?
-  │   ├─ YES → Does customer spec address cosmetic requirements?
-  │   │         ├─ YES → Does the part meet customer cosmetic spec?
-  │   │         │         ├─ YES → USE-AS-IS with documentation
-  │   │         │         └─ NO  → Customer concession required → If granted: USE-AS-IS
-  │   │         │                                                → If denied: REWORK or SCRAP
-  │   │         └─ NO  → USE-AS-IS with engineering sign-off
-  │   └─ NO  → Continue
-  │
-  ├─ Is this a dimensional non-conformance within material review authority?
-  │   ├─ YES → Engineering analysis: does the dimension affect assembly or performance?
-  │   │         ├─ YES → REWORK or SCRAP (depending on feasibility)
-  │   │         └─ NO  → USE-AS-IS with documented engineering justification
-  │   └─ NO  → Continue
-  │
-  └─ Is this a supplier-caused non-conformance?
-      ├─ YES → Is the material needed immediately for production?
-      │         ├─ YES → Sort/rework at supplier's cost + USE acceptable units
-      │         │         + SCAR to supplier + debit memo for sort/rework cost
-      │         └─ NO  → RETURN TO VENDOR with SCAR + debit memo or replacement PO
-      └─ NO  → Evaluate per the functional impact path above
-```
-
-### 1.2 FDA-Regulated Environment (21 CFR 820 / ISO 13485) Specific Logic
-
-Medical device non-conformances carry additional requirements:
-
-**Pre-Market (Design/Development):**
-- Non-conformances during design verification/validation must be documented in the Design History File (DHF)
-- Disposition must consider risk per ISO 14971 — severity and probability of harm to the patient
-- Use-as-is is rarely acceptable for a design non-conformance; it implies the design intent is wrong
-- CAPA is almost always required to prevent recurrence in production
-
-**Post-Market (Production/Field):**
-- Non-conformances that could affect device safety or performance require evaluation for field action (recall, correction, removal) per 21 CFR 806
-- The threshold is low: if there is any reasonable possibility of harm, evaluate formally
-- Document the decision NOT to file a field action as rigorously as the decision to file one
-- Complaint-related non-conformances must be linked to complaint records per 820.198
-- MDR (Medical Device Report) obligations: death or serious injury must be reported to FDA within 30 calendar days (5 days for events requiring remedial action)
-
-**Disposition Authority Matrix:**
-
-| Disposition | Who Can Authorize | Additional Requirements |
-|---|---|---|
-| Scrap | Quality Engineer or above | Documented with lot traceability |
-| Rework | Quality Engineer + Manufacturing Engineering | Approved rework procedure; re-inspect to original spec |
-| Repair | MRB (Quality + Engineering + Manufacturing) | Risk assessment per ISO 14971; update DHF if design-related |
-| Use-As-Is | MRB + Design Authority | Risk assessment; documented justification; regulatory impact evaluation |
-| RTV | Quality Engineer + Procurement | SCAR required; supplier re-qualification if repeated |
-
-### 1.3 Automotive Environment (IATF 16949) Specific Logic
-
-**Customer Notification Requirements:**
-- Any non-conformance on product shipped to the customer: notification within 24 hours of discovery
-- Any process change affecting fit, form, function, or performance: PPAP resubmission required
-- Use-as-is disposition: typically requires a formal deviation request to the customer through their supplier portal (e.g., GM's GQTS, Ford's MQAS, Stellantis' SQP)
-- Customer may accept, reject, or accept with conditions (reduced quantity, time-limited deviation)
-
-**Control Plan Integration:**
-- When a non-conformance reveals a gap in the control plan, the control plan must be updated as part of the corrective action
-- Special characteristics (safety/significant characteristics identified with shield or diamond symbols) have zero tolerance for non-conformance: 100% containment and immediate CAPA
-- The reaction plan column of the control plan specifies the predetermined response — follow it first, then investigate
-
-**Controlled Shipping Levels:**
-- **CS-1 (Internal Controlled Shipping):** Supplier adds an additional inspection/sort step beyond normal controls and submits inspection data with each shipment
-- **CS-2 (External Controlled Shipping):** Third-party inspection at supplier's facility, at supplier's cost, with direct reporting to customer quality
-- CS-1 and CS-2 are distinct from the general supplier escalation ladder — they are customer-mandated containment measures, not supplier-initiated improvements
-
-### 1.4 Aerospace Environment (AS9100) Specific Logic
-
-**Customer/Authority Approval:**
-- Use-as-is and repair dispositions ALWAYS require customer approval per AS9100 §8.7.1
-- If the customer is a prime contractor working under a government contract, the government quality representative (DCMA or equivalent) may also need to approve
-- Non-conformances on parts with key characteristics require notification to the design authority
-- First Article Inspection (FAI) per AS9102 becomes invalid if a non-conformance indicates the process has changed from the qualified state — partial or full FAI resubmission may be required
-
-**Counterfeit Part Prevention:**
-- If a non-conformance raises suspicion of counterfeit material (unexpected material composition, incorrect markings, suspect documentation), invoke the counterfeit prevention procedure per AS9100 §8.1.4
-- Quarantine the suspect material in a separate area from other MRB material
-- Report to GIDEP (Government-Industry Data Exchange Program) if counterfeit is confirmed
-- Do not return suspect counterfeit material to the supplier — it must be quarantined and may need to be retained as evidence
-
-**Traceability Requirements:**
-- Aerospace non-conformances must maintain lot, batch, heat, and serial number traceability throughout the disposition process
-- Scrap disposition must include documented destruction of serialized parts to prevent re-entry into the supply chain
-- OASIS database updates may be required for supplier quality events
-
----
-
-## 2. Root Cause Analysis Methodology Selection Guide
-
-### 2.1 Selection Decision Matrix
-
-| Factor | 5 Whys | Ishikawa + 5 Whys | 8D | Fault Tree Analysis |
-|---|---|---|---|---|
-| **Best for** | Single-event, linear cause chain | Multi-factor, need to explore categories | Recurring issue, team-based resolution | Safety-critical, quantitative risk needed |
-| **Effort (hours)** | 1–2 | 4–8 | 20–40 (across all D-steps) | 40–80 |
-| **Team size** | 1–2 people | 2–4 people | 5–8 cross-functional | 3–6 subject matter experts |
-| **When required** | Internal process investigations | Complex non-conformances | Customer mandate (automotive OEMs) | Aerospace product safety; medical device risk analysis |
-| **Limitation** | Assumes single linear chain | Still qualitative; hypothesis-driven | Heavyweight for simple issues | Resource-intensive; requires failure rate data for quantitative mode |
-| **Output** | Root cause statement | Categorized cause hypotheses with verified root cause | Full 8D report (D0-D8) | Fault tree diagram with probability assignments |
-
-### 2.2 The 5 Whys: When It Works and When It Doesn't
-
-**5 Whys works well when:**
-- The failure is a single event with a clear before/after state change
-- Each "why" can be verified with data (measurement, observation, record review)
-- The causal chain does not branch — there is a single dominant cause
-- The investigation can reach a systemic cause (process, system, or design issue) within 5 iterations
-
-**5 Whys fails when:**
-- Multiple independent causes interact to produce the failure (combinatorial causes)
-- The analyst stops at "human error" or "operator mistake" — this is never a root cause
-- Each "why" is answered with opinion rather than verified data
-- The analysis becomes circular (Why A? Because B. Why B? Because A.)
-- Organizational pressure drives toward a "convenient" root cause that avoids systemic change
-
-**Verification protocol for each "why" level:**
-
-| Why Level | Question | Acceptable Evidence | Unacceptable Evidence |
-|---|---|---|---|
-| Why 1 (Event) | What physically happened? | Measurement data, photographs, inspection records | "The part was bad" |
-| Why 2 (Condition) | What condition allowed it? | Process parameter logs, tool condition records | "The operator didn't check" |
-| Why 3 (Process) | Why did the process permit this condition? | Work instruction review, process FMEA gap | "It's always been done this way" |
-| Why 4 (System) | Why didn't the system prevent the process gap? | System audit evidence, training records, control plan review | "We need better training" |
-| Why 5 (Management) | Why was the system gap undetected? | Management review records, resource allocation evidence, risk assessment gaps | "Management doesn't care about quality" |
-
-### 2.3 Ishikawa Diagram: 6M Framework Deep Dive
-
-For each M category, specific investigation questions that separate thorough analysis from checkbox exercises:
-
-**Man (Personnel):**
-- Was the operator trained AND certified on this specific operation?
-- When was the most recent certification renewal?
-- Was this the operator's normal workstation or were they cross-trained/temporary?
-- Was the shift staffing at normal levels or was this during overtime/short-staffing?
-- Check operator error rate data — is this an isolated event or a pattern for this individual?
-
-**Machine (Equipment):**
-- When was the last preventive maintenance performed (date AND what was done)?
-- Is the machine within its calibration cycle for all measuring functions?
-- Were any alarms, warnings, or parameter drifts logged before the event?
-- Has the machine been modified, repaired, or had a tooling change recently?
-- Check the machine's historical Cpk trend — has capability been declining?
-
-**Material:**
-- Is this a new lot of raw material? When did the lot change?
-- Were incoming inspection results within normal range, or marginal-pass?
-- Does the material certificate match what was physically received (heat number, mill, composition)?
-- Has the material been stored correctly (temperature, humidity, shelf life, FIFO rotation)?
-- Were any material substitutions or equivalents authorized?
-
-**Method (Process):**
-- Is the work instruction current revision? When was it last revised?
-- Does the operator actually follow the work instruction as written (observation, not assumption)?
-- Were any process parameters changed recently (speeds, feeds, temperatures, pressures, cure times)?
-- Was an engineering change order (ECO) recently implemented on this part or process?
-- Is there a gap between the documented method and the actual method (tribal knowledge)?
-
-**Measurement:**
-- Was the measurement system used for this inspection validated (Gauge R&R)?
-- Is the gauge within calibration? Check both certificate and physical condition.
-- Was the correct measurement method used (per the control plan or inspection instruction)?
-- Did the measurement environment (temperature, vibration, lighting) affect the result?
-- For attribute inspections (go/no-go, visual): what is the inspection effectiveness rate?
-
-**Mother Nature (Environment):**
-- Were ambient conditions (temperature, humidity) within process specification?
-- Were there any environmental events (power fluctuation, compressed air pressure drop, vibration from construction)?
-- Is there a shift-to-shift or day-to-day correlation in the data (temperature cycling, humidity changes)?
-- Was the factory HVAC system operating normally?
-- For cleanroom or controlled environment processes: were environmental monitoring logs within specification?
-
-### 2.4 8D Methodology: Detailed Gate Requirements
-
-Each D-step has specific outputs required before advancing. Skipping gates creates 8Ds that look complete but don't actually solve the problem.
-
-| D-Step | Name | Required Output | Common Failure Mode |
-|---|---|---|---|
-| D0 | Symptom & Emergency Response | Emergency response actions taken; containment effectiveness confirmed | Confusing containment with corrective action |
-| D1 | Team Formation | Cross-functional team with defined roles; includes process owner and subject matter expert | Team is all quality, no manufacturing or engineering |
-| D2 | Problem Definition | IS/IS NOT analysis completed; problem quantified with data (defect rate, PPM, Cpk shift, complaint count) | Problem statement is too broad ("quality issues") or just restates the symptom |
-| D3 | Interim Containment | Actions to protect customer while investigation proceeds; effectiveness verified (inspection data post-containment) | Containment is "100% inspection" without verifying inspection effectiveness through known-defective challenge |
-| D4 | Root Cause | Root cause(s) verified through data analysis or designed experiment; escapes the "human error" trap | Root cause = restatement of problem; no verification data; stops at symptoms |
-| D5 | Corrective Action Selection | Actions address verified root cause; mistake-proofing (poka-yoke) preferred over procedural controls | Corrective action = "retrain operators" or "add inspection step" (both are weak) |
-| D6 | Implementation | Actions implemented with documented evidence (updated WI, installed fixture, modified process); baseline performance established | Implementation date = planned date, not actual; no evidence of implementation |
-| D7 | Prevention | Systemic actions to prevent recurrence across similar processes/products; lessons learned documented; FMEA updated | D7 is copy-paste of D5; no horizontal deployment; FMEA not updated |
-| D8 | Recognition | Team acknowledged; 8D closed with effectiveness data | Closed without effectiveness data; team not recognized |
-
-### 2.5 Fault Tree Analysis: Construction Methodology
-
-**Step 1: Define the Top Event**
-- State the undesired event in specific, measurable terms
-- Example: "Shaft diameter exceeds USL of 25.05mm on finished machined part"
-- Not: "Bad parts" or "Quality problem"
-
-**Step 2: Identify Immediate Causes (Level 1)**
-- What must be true for the top event to occur?
-- Use AND gates (all causes must be present) and OR gates (any single cause is sufficient)
-- Example: "Shaft OD too large" can be caused by (OR gate): tool wear, incorrect tool offset, material oversize, thermal expansion, fixture misalignment
-
-**Step 3: Decompose Each Cause (Levels 2–N)**
-- For each Level 1 cause, ask: what causes this?
-- Continue decomposing until you reach basic events (events with known failure rates or that cannot be further decomposed)
-- Example: "Tool wear" caused by (AND gate): extended run time + inadequate tool change interval + no in-process SPC alert
-
-**Step 4: Quantify (when data is available)**
-- Assign probability values to basic events using historical data, MTBF data, or engineering estimates
-- Calculate top event probability through the gate logic
-- Identify the minimal cut sets (smallest combinations of basic events that cause the top event)
-- Focus corrective actions on the highest-probability cut sets
-
----
-
-## 3. CAPA Writing and Verification Framework
-
-### 3.1 CAPA Initiation Criteria
-
-**Always initiate CAPA for:**
-- Repeat non-conformance: same failure mode occurring 3+ times in 12 months
-- Customer complaint involving product performance, safety, or regulatory compliance
-- External audit finding (FDA, notified body, customer, registrar)
-- Field failure or product return
-- Trend signal: SPC control chart out-of-control pattern (not isolated point)
-- Regulatory requirement change affecting existing products/processes
-- Post-market surveillance data indicating potential safety concern
-
-**Consider CAPA (judgment call) for:**
-- Repeat non-conformance: same failure mode 2 times in 12 months
-- Internal audit finding of moderate significance
-- Supplier non-conformance with systemic indicators
-- Near-miss event (non-conformance caught before reaching customer)
-- Process deviation from validated parameters without product impact
-
-**Do NOT initiate CAPA for:**
-- Isolated non-conformance with clear, non-recurring cause (one-off tool breakage, power outage)
-- Non-conformance fully addressed by NCR disposition with no systemic implication
-- Customer cosmetic preference that doesn't violate any specification
-- Minor documentation errors caught and corrected within the same day
-
-### 3.2 CAPA Action Hierarchy (Effectiveness Ranking)
-
-Corrective actions are not created equal. Rank by effectiveness and default to the highest feasible level:
-
-| Rank | Control Type | Example | Effectiveness | Typical Cost |
-|---|---|---|---|---|
-| 1 | **Elimination** | Redesign to remove the failure mode entirely | ~100% | High (design change, tooling) |
-| 2 | **Substitution** | Change material, supplier, or process to one that cannot produce the failure | ~95% | Medium-High |
-| 3 | **Engineering Controls (Poka-Yoke)** | Fixture that physically prevents incorrect assembly; sensor that stops machine on out-of-spec condition | ~90% | Medium |
-| 4 | **Detection Controls** | Automated inspection (vision system, laser gauge) that 100% inspects and auto-rejects | ~85% | Medium |
-| 5 | **Administrative Controls** | Updated work instruction, revised procedure, checklist | ~50-60% | Low |
-| 6 | **Training** | Operator retraining on existing procedure | ~30-40% | Low |
-
-If your corrective action is ranked 5 or 6 and a rank 1-4 action is feasible, the CAPA will likely be challenged by auditors. Training alone is never an adequate corrective action for a significant non-conformance.
-
-### 3.3 CAPA Effectiveness Verification Protocol
-
-**Phase 1: Implementation Verification (within 2 weeks of target date)**
-
-| Evidence Required | What to Check | Acceptable | Not Acceptable |
-|---|---|---|---|
-| Document revision | Was the WI/procedure updated to reflect the change? | Revision with effective date and training records | "Will be updated in next revision" |
-| Physical verification | Is the fixture/tool/sensor installed and operational? | Photograph + validation record | Purchase order placed but not installed |
-| Training completion | Were affected personnel trained? | Signed training records with competency assessment | Email sent to team |
-| System update | Were QMS documents, FMEA, control plan updated? | Updated documents with revision and approval | "Will update during next review" |
-
-**Phase 2: Effectiveness Validation (90-day monitoring period)**
-
-| Metric | Calculation | Pass Criteria | Fail Criteria |
-|---|---|---|---|
-| Recurrence rate | Count of same failure mode in monitoring period | Zero recurrences | Any recurrence |
-| Related failure rate | Count of related failure modes in same process | No increase from baseline | Increase suggests incomplete root cause |
-| Process capability | Cpk or Ppk for the affected characteristic | Cpk ≥ 1.33 (or target value) | Cpk below pre-CAPA level |
-| Customer feedback | Complaints related to the addressed failure mode | Zero related complaints | Any related complaint |
-
-**Phase 3: Closure Decision**
-
-| Condition | Decision |
-|---|---|
-| Phase 1 complete + Phase 2 pass criteria met | Close CAPA |
-| Phase 1 complete + Phase 2 shows improvement but not full elimination | Extend monitoring period by 60 days; if still improving, close with condition |
-| Phase 1 complete + Phase 2 shows no improvement | Reopen CAPA; root cause was incorrect or action insufficient |
-| Phase 1 incomplete (action not implemented) | CAPA remains open; escalate for resource allocation |
-| Recurrence during monitoring | Reopen CAPA; do NOT close and open new CAPA for same issue |
-
-### 3.4 CAPA Timeliness Standards
-
-| CAPA Phase | Target Timeline | Regulatory Expectation |
-|---|---|---|
-| Initiation and assignment | Within 5 business days of trigger | FDA: "timely" — typically within 30 days of awareness |
-| Investigation and root cause | Within 30 calendar days | IATF 16949: per customer timeline (often 10-day initial response) |
-| Corrective action plan | Within 45 calendar days | AS9100: per contractual agreement |
-| Implementation | Within 90 calendar days | Varies by complexity; document delays with justification |
-| Effectiveness verification start | Immediately after implementation | Must be defined at initiation |
-| Effectiveness verification completion | 90 days after implementation | FDA: must demonstrate effectiveness, not just implementation |
-| CAPA closure | Within 180 calendar days of initiation (total) | FDA warning letters cite CAPAs open > 1 year as systemic failure |
-
----
-
-## 4. SPC Interpretation Decision Logic
-
-### 4.1 Control Chart Selection Flowchart
-
-```
-START: What type of data are you charting?
-  │
-  ├─ CONTINUOUS (variable) data — measurements in units (mm, kg, °C, psi)
-  │   ├─ Are you taking subgroups (multiple measurements per sampling event)?
-  │   │   ├─ YES → What is the subgroup size (n)?
-  │   │   │         ├─ n = 2 to 9  → X-bar / R chart
-  │   │   │         ├─ n = 10 to 25 → X-bar / S chart
-  │   │   │         └─ n > 25 → X-bar / S chart (consider reducing subgroup size)
-  │   │   └─ NO (n=1, individual readings) → Individuals / Moving Range (I-MR) chart
-  │   │         Use when: batch process, destructive testing, slow process,
-  │   │         or when each unit is unique
-  │   └─ (Verify data normality assumption for variable charts — I-MR is sensitive
-  │       to non-normality; consider transformation or use nonparametric alternatives)
-  │
-  └─ ATTRIBUTE (discrete) data — counts or proportions
-      ├─ Are you counting DEFECTIVE ITEMS (units that pass or fail)?
-      │   ├─ YES → Is the sample size constant?
-      │   │         ├─ YES → np-chart (count of defectives, fixed sample)
-      │   │         └─ NO  → p-chart (proportion defective, variable sample)
-      │   └─ NO  → You're counting DEFECTS (multiple defects possible per unit)
-      │             ├─ Is the inspection area/opportunity constant?
-      │             │   ├─ YES → c-chart (count of defects per unit, fixed area)
-      │             │   └─ NO  → u-chart (defects per unit, variable area)
-      │             └─ (Verify Poisson assumption for c/u charts)
-      └─ (Attribute charts require larger sample sizes than variable charts for
-          equivalent sensitivity — minimum ~50 for p/np, ~25 for c/u)
-```
-
-### 4.2 Out-of-Control Response Protocol
-
-When a control chart signals an out-of-control condition, follow this response based on the specific signal:
-
-**Rule 1: Point beyond 3σ control limit**
-
-| Response Level | Action | Timeline |
-|---|---|---|
-| Immediate | Stop process if product is being produced; quarantine output since last known good point | Within minutes |
-| Investigation | Identify the assignable cause — what changed? Check 6M categories systematically | Within 4 hours |
-| Containment | Sort/inspect product produced during the out-of-control period | Within 1 shift |
-| Correction | Address the assignable cause and restart production with increased monitoring | Before next production run |
-| Documentation | NCR if product was affected; update control chart with annotation | Within 24 hours |
-
-**Rule 2: Nine consecutive points on one side of the center line (run)**
-
-| Response Level | Action | Timeline |
-|---|---|---|
-| Investigation | Process mean has likely shifted. Check for: tool wear progression, material lot change, environmental drift, measurement calibration shift | Within 1 shift |
-| Adjustment | If assignable cause found: correct. If no assignable cause found and process is still within spec, continue monitoring but increase sampling frequency | Within 24 hours |
-| Recalculation | If the shift is intentional (process improvement) or represents a new process level, recalculate control limits with new data | After 25+ subgroups at new level |
-
-**Rule 3: Six consecutive points steadily increasing or decreasing (trend)**
-
-| Response Level | Action | Timeline |
-|---|---|---|
-| Investigation | Process is drifting. Most common causes: tool wear, chemical depletion, thermal drift, filter degradation | Within 1 shift |
-| Projection | At the current drift rate, when will the process exceed the specification limit? This determines urgency | Immediate calculation |
-| Preemptive action | Adjust the process (tool change, chemical replenishment) BEFORE it reaches the spec limit | Before projected spec limit crossing |
-
-**Rule 4: Fourteen consecutive points alternating up and down (stratification/mixing)**
-
-| Response Level | Action | Timeline |
-|---|---|---|
-| Investigation | This pattern indicates over-control (tampering), two alternating streams (e.g., two spindles, two cavities), or systematic measurement error | Within 24 hours |
-| Verification | Check if the subgroup data is being collected from multiple sources that should be charted separately | Within 48 hours |
-| Stratification | If data is from multiple streams, create separate charts for each stream | Within 1 week |
-
-### 4.3 Capability Index Interpretation
-
-| Cpk Value | Interpretation | Action Required |
-|---|---|---|
-| Cpk ≥ 2.00 | Six Sigma capable; consider reducing inspection frequency | Maintain controls; candidate for reduced inspection or skip-lot |
-| 1.67 ≤ Cpk < 2.00 | Highly capable; exceeds most customer requirements | Standard monitoring; meets IATF 16949 requirements for new processes |
-| 1.33 ≤ Cpk < 1.67 | Capable; meets most industry standards | Standard SPC monitoring; meets IATF 16949 minimum for production |
-| 1.00 ≤ Cpk < 1.33 | Marginally capable; producing some defects | Increase monitoring frequency; initiate process improvement; customer notification may be required |
-| 0.67 ≤ Cpk < 1.00 | Not capable; significant defect production | 100% inspection until process is improved; CAPA required; customer notification required |
-| Cpk < 0.67 | Severely incapable | Stop production; sort all WIP and finished goods; engineering review of process and specification |
-
-**Cp vs. Cpk Interpretation:**
-
-| Condition | Meaning | Action |
-|---|---|---|
-| Cp high, Cpk high | Process is both capable and centered | Optimal state; maintain |
-| Cp high, Cpk low | Process has low variation but is not centered on the target | Adjust the process mean; do NOT reduce variation (it's already good) |
-| Cp low, Cpk low | Process has too much variation, possibly also off-center | Reduce variation first (fundamental process improvement), then center |
-| Cp low, Cpk ≈ Cp | Process has too much variation but is centered | Reduce variation; centering is not the issue |
-
-**Pp/Ppk vs. Cp/Cpk:**
-
-| Index | Uses | Represents | When to Use |
-|---|---|---|---|
-| Cp/Cpk | Within-subgroup variation (σ_within) | Short-term or "potential" capability | Evaluating process potential when in statistical control |
-| Pp/Ppk | Overall variation (σ_overall) including between-subgroup shifts | Long-term or "actual" performance | Evaluating what the customer actually receives over time |
-| Pp/Ppk < Cp/Cpk (common) | Process mean is shifting between subgroups | Between-subgroup variation is significant | Investigate what's causing the mean to shift between subgroups |
-| Pp/Ppk ≈ Cp/Cpk | Process is stable over time | Minimal between-subgroup variation | Process is well-controlled; long-term performance matches potential |
-
----
-
-## 5. Inspection Level Determination
-
-### 5.1 Incoming Inspection Level Decision Matrix
-
-| Factor | Points |
-|---|---|
-| **Supplier History** | |
-| New supplier (< 5 lots received) | 5 |
-| Supplier on probation/watch | 5 |
-| Qualified supplier with PPM 1,000-5,000 | 3 |
-| Qualified supplier with PPM 500-1,000 | 2 |
-| Qualified supplier with PPM < 500 | 1 |
-| Preferred supplier with PPM < 100 | 0 |
-| **Part Criticality** | |
-| Safety-critical characteristic | 5 |
-| Key characteristic (fit/function) | 3 |
-| Standard characteristic | 1 |
-| Cosmetic only | 0 |
-| **Regulatory Requirement** | |
-| FDA/medical device requiring incoming inspection | 5 |
-| Aerospace with special process (NADCAP) | 4 |
-| Automotive with customer-designated special characteristic | 3 |
-| Standard ISO 9001 environment | 1 |
-| **Recent Quality History (last 6 months)** | |
-| NCR issued against this part/supplier combination | +3 |
-| Customer complaint traced to this component | +4 |
-| SCAR currently open against this supplier | +3 |
-| No quality issues | 0 |
-
-**Inspection Level Assignment:**
-
-| Total Points | Inspection Level | Typical Approach |
-|---|---|---|
-| 0–3 | Reduced / Skip-Lot | CoC review + skip-lot verification (every 3rd or 5th lot) |
-| 4–7 | Normal (AQL Level II) | Standard AQL sampling per ANSI/ASQ Z1.4 |
-| 8–11 | Tightened (AQL Level III) | Tightened sampling or increased sample size |
-| 12+ | 100% / Full Inspection | 100% inspection of critical characteristics |
-
-### 5.2 ANSI/ASQ Z1.4 Quick Reference
-
-**Sample Size Code Letters (Normal Inspection, General Level II):**
-
-| Lot Size | Code Letter | Sample Size (AQL 1.0) |
-|---|---|---|
-| 2–8 | A | 2 (Ac=0, Re=1) |
-| 9–15 | B | 3 (Ac=0, Re=1) |
-| 16–25 | C | 5 (Ac=0, Re=1) |
-| 26–50 | D | 8 (Ac=0, Re=1) |
-| 51–90 | E | 13 (Ac=1, Re=2) |
-| 91–150 | F | 20 (Ac=1, Re=2) |
-| 151–280 | G | 32 (Ac=2, Re=3) |
-| 281–500 | H | 50 (Ac=3, Re=4) |
-| 501–1,200 | J | 80 (Ac=5, Re=6) |
-| 1,201–3,200 | K | 125 (Ac=7, Re=8) |
-| 3,201–10,000 | L | 200 (Ac=10, Re=11) |
-| 10,001–35,000 | M | 315 (Ac=14, Re=15) |
-| 35,001–150,000 | N | 500 (Ac=21, Re=22) |
-
-**Switching Rules:**
-
-| Current Level | Switch Condition | Switch To |
-|---|---|---|
-| Normal | 2 of 5 consecutive lots rejected | Tightened |
-| Normal | 10 consecutive lots accepted AND production at steady rate AND approved by responsible authority | Reduced |
-| Tightened | 5 consecutive lots accepted | Normal |
-| Tightened | 10 consecutive lots not accepted | Discontinue inspection; require supplier corrective action |
-| Reduced | 1 lot rejected | Normal |
-| Reduced | Production irregular or other conditions warrant | Normal |
-
-### 5.3 Skip-Lot Qualification Requirements
-
-**Qualification Criteria (all must be met):**
-1. Supplier is on the Approved Supplier List with "preferred" or "qualified" status
-2. Minimum 10 consecutive lots accepted at normal inspection level
-3. Supplier's process capability (Cpk) for critical characteristics ≥ 1.33, verified by supplier data AND incoming inspection data
-4. No open SCARs against the supplier for this part number
-5. Supplier has a certified quality management system (ISO 9001 minimum; industry-specific certification preferred)
-6. Written agreement documenting skip-lot terms, reversion criteria, and data submission requirements
-
-**Skip-Lot Frequencies:**
-
-| Qualification Level | Inspection Frequency | Reversion Trigger |
-|---|---|---|
-| Skip-Lot 1 | Every 2nd lot | 1 lot rejection |
-| Skip-Lot 2 | Every 3rd lot | 1 lot rejection or supplier Cpk drops below 1.33 |
-| Skip-Lot 3 | Every 5th lot | 1 lot rejection, Cpk concern, or supplier quality system change |
-| CoC Reliance | CoC review only; periodic verification (annual or per-lot-change) | Any NCR, customer complaint, or audit finding |
-
----
-
-## 6. Supplier Quality Escalation Ladder
-
-### 6.1 Detailed Escalation Process
-
-**Level 0: Normal Operations**
-- Supplier meets scorecard expectations (PPM < threshold, OTD > threshold, SCAR closure on time)
-- Standard incoming inspection level
-- Quarterly scorecard review
-- Annual audit (if risk-based schedule warrants)
-
-**Level 1: SCAR Issued**
-- **Trigger:** Single significant non-conformance (> $5,000 impact or safety/regulatory concern) OR 3+ minor non-conformances on the same part in 90 days
-- **Actions:**
-  - Formal SCAR issued with 8D or equivalent RCA requirement
-  - Supplier has 10 business days for initial response (containment + preliminary root cause)
-  - Supplier has 30 calendar days for full corrective action plan with implementation timeline
-  - Quality engineering review of SCAR response for adequacy
-  - Increase incoming inspection level for the affected part number
-- **Exit criteria:** SCAR accepted and closed with verified effectiveness (90-day monitoring)
-
-**Level 2: Supplier on Watch / Probation**
-- **Trigger:** SCAR not responded to within timeline OR corrective action not effective (recurrence during monitoring) OR scorecard falls below minimum threshold for 2 consecutive quarters
-- **Actions:**
-  - Supplier notified of probation status in writing (Quality Manager or Director level)
-  - Procurement notified; new business hold (no new part numbers awarded)
-  - Increase inspection level for ALL part numbers from this supplier (not just affected part)
-  - Monthly performance review calls with supplier quality management
-  - Supplier must submit a comprehensive improvement plan within 15 business days
-  - Consider on-site quality audit focused on the specific failure mode
-- **Exit criteria:** Improvement plan accepted + 2 consecutive quarters meeting scorecard minimum + no new SCARs
-
-**Level 3: Controlled Shipping**
-- **Trigger:** Continued failures during watch period OR critical quality escape that reaches customer
-- **Actions:**
-  - Controlled Shipping Level 1 (CS-1): Supplier adds additional sort/inspection step with data submitted per shipment
-  - If CS-1 ineffective within 60 days: Controlled Shipping Level 2 (CS-2): third-party resident inspector at supplier's facility, at supplier's expense
-  - All sort/inspection costs debited to supplier
-  - Weekly performance review calls with supplier VP/GM level
-  - Begin qualification of alternate source (if not already underway)
-- **Exit criteria:** 90 consecutive days of zero non-conformances under controlled shipping + root cause fully addressed + systemic improvements validated
-
-**Level 4: New Source Qualification / Phase-Out**
-- **Trigger:** No sustained improvement under controlled shipping OR supplier unwilling/unable to invest in required improvements
-- **Actions:**
-  - Formal notification to supplier of intent to transfer business
-  - Accelerated alternate supplier qualification (expedite PPAP/FAI/first articles)
-  - Reduce business allocation as alternate source ramps up
-  - Maintain controlled shipping on remaining volume
-  - Ensure last-time-buy quantities cover the transition period
-  - Document all quality costs incurred for potential recovery
-- **Timeline:** Depends on part complexity and alternate source readiness; typically 3-12 months
-
-**Level 5: ASL Removal**
-- **Trigger:** Qualification of alternate source complete OR supplier's quality system failure is fundamental (e.g., data falsification, loss of certification)
-- **Actions:**
-  - Formal removal from Approved Supplier List
-  - Final shipment received and inspected under 100% inspection
-  - All supplier-owned tooling at our facility: disposition per contract terms
-  - Our tooling at supplier's facility: retrieve per contract terms
-  - Close all open SCARs as "supplier removed"
-  - Retain supplier quality file for minimum 7 years (regulatory record retention)
-  - Update OASIS (aerospace) or relevant industry databases
-- **Re-entry:** If supplier applies for re-qualification, treat as a new supplier with full qualification process; require evidence that systemic issues were addressed
-
-### 6.2 Escalation Decision Quick Reference
-
-| Situation | Start at Level | Rationale |
-|---|---|---|
-| First minor NC from good supplier | Handle via NCR, no escalation | Single event doesn't warrant formal escalation |
-| First significant NC from good supplier | Level 1 (SCAR) | Significant impact requires formal root cause |
-| Third minor NC in 90 days from same supplier/part | Level 1 (SCAR) | Pattern indicates systemic issue |
-| SCAR response inadequate or late | Level 2 (Watch) | Non-responsiveness is itself a quality system failure |
-| NC reaches customer | Level 2 minimum; Level 3 if safety-related | Customer impact demands immediate escalation |
-| Falsified documentation discovered | Level 4 minimum; Level 5 if confirmed | Trust is broken; containment scope is unknown |
-| Sole-source supplier with quality problems | Level 1 with parallel Level 4 actions (qualify alternate) | Business continuity requires measured response; don't threaten what you can't execute |
-
----
-
-## 7. Cost of Quality Calculation Models
-
-### 7.1 COQ Category Definitions and Tracking
-
-**Prevention Costs (invest to prevent defects):**
-
-| Cost Element | How to Measure | Typical Range (% of revenue) |
-|---|---|---|
-| Quality planning | Hours × labor rate for quality planning activities | 0.2–0.5% |
-| Process validation/qualification | Labor + equipment + materials for IQ/OQ/PQ | 0.3–0.8% |
-| Supplier qualification | Audit travel + labor + first article costs | 0.1–0.3% |
-| Training (quality-related) | Hours × labor rate + training materials | 0.1–0.3% |
-| SPC implementation/maintenance | Software licenses + labor for chart maintenance | 0.1–0.2% |
-| Design reviews / FMEA | Hours × labor rate for cross-functional reviews | 0.2–0.5% |
-| Poka-yoke development | Design + fabrication + validation of error-proofing | 0.2–0.5% |
-
-**Appraisal Costs (cost of verifying conformance):**
-
-| Cost Element | How to Measure | Typical Range (% of revenue) |
-|---|---|---|
-| Incoming inspection | Hours × labor rate + gauge costs | 0.3–0.8% |
-| In-process inspection | Hours × labor rate (including production wait time) | 0.5–1.5% |
-| Final inspection / testing | Hours × labor rate + test equipment depreciation | 0.3–1.0% |
-| Calibration program | Service contracts + labor + standards | 0.1–0.3% |
-| Audit program (internal + external) | Labor + travel + registration fees | 0.1–0.3% |
-| Laboratory testing | Internal lab costs or external lab fees | 0.2–0.5% |
-
-**Internal Failure Costs (defects caught before shipment):**
-
-| Cost Element | How to Measure | Typical Range (% of revenue) |
-|---|---|---|
-| Scrap | Scrapped material value + processing labor wasted | 1.0–3.0% |
-| Rework | Labor + materials for rework operations | 0.5–2.0% |
-| Re-inspection | Hours × labor rate for re-inspection after rework | 0.1–0.5% |
-| MRB processing | Hours × labor rate for disposition activities | 0.1–0.3% |
-| Root cause investigation | Hours × labor rate for RCA team activities | 0.2–0.5% |
-| Production delays | Lost production time due to quarantine, investigation | 0.5–2.0% |
-| Supplier sort/containment | Third-party sort labor or internal sort labor for supplier-caused NC | 0.1–0.5% |
-
-**External Failure Costs (defects that reach the customer):**
-
-| Cost Element | How to Measure | Typical Range (% of revenue) |
-|---|---|---|
-| Customer returns / credits | Credit memos + return shipping + restocking labor | 0.5–2.0% |
-| Warranty claims | Claim value + processing labor | 0.5–3.0% |
-| Field service / repair | Service labor + travel + parts | 0.3–1.5% |
-| Customer complaint processing | Hours × labor rate for investigation + response | 0.2–0.5% |
-| Recall / field correction | Product replacement + notification + shipping + regulatory | 0.0–5.0% (highly variable) |
-| Regulatory action costs | Fines, consent decree compliance, increased inspections | 0.0–10.0% (catastrophic when triggered) |
-| Reputation / lost business | Lost revenue from customer defection (estimate) | Difficult to measure; typically 2-10x direct costs |
-
-### 7.2 COQ Business Case Model
-
-**Calculating ROI for Quality Investment:**
-
-```
-ROI = (Failure Cost Reduction - Investment Cost) / Investment Cost × 100%
-
-Where:
-  Failure Cost Reduction = (Current internal + external failure costs)
-                          - (Projected failure costs after investment)
-  Investment Cost = Prevention cost increase + appraisal cost change
-```
-
-**Rule of Thumb Multipliers:**
-
-| Investment Type | Expected ROI | Payback Period |
-|---|---|---|
-| Poka-yoke (error-proofing) | 5:1 to 20:1 | 3–6 months |
-| SPC implementation | 3:1 to 10:1 | 6–12 months |
-| Supplier development program | 2:1 to 8:1 | 12–24 months |
-| Process validation improvement | 4:1 to 15:1 | 6–18 months |
-| Training program upgrade | 1:1 to 3:1 | 12–24 months |
-
-### 7.3 MRB Decision Process — Economic Model
-
-When disposition is not dictated by safety or regulatory requirements, use economic analysis:
-
-**Rework vs. Scrap Decision:**
-
-```
-Rework if: C_rework + C_reinspect < C_replacement × (1 + premium)
-
-Where:
-  C_rework = Direct rework labor + materials + machine time
-  C_reinspect = Re-inspection labor + any additional testing
-  C_replacement = Purchase price or manufacturing cost of replacement unit
-  premium = Schedule urgency factor (0% if no urgency, 10-50% if production impact,
-            100%+ if customer delivery at risk)
-```
-
-**Sort vs. Return Decision (for supplier-caused lots):**
-
-```
-Sort if: (C_sort < C_return_freight + C_production_delay) AND (expected yield > 70%)
-
-Where:
-  C_sort = Sort labor hours × rate (typically $25-50/hr for manual sort,
-           $50-100/hr for dimensional sort)
-  C_return_freight = Shipping cost + handling + administrative
-  C_production_delay = (Days of delay × daily production value at risk)
-  expected yield = Estimated % of lot that will pass sort
-                   (use sample data to estimate)
-```
-
-**Use-As-Is vs. Sort/Rework Decision (non-safety, non-regulatory):**
-
-```
-Use-as-is if: Risk_functional ≤ Acceptable_risk
-              AND C_use_as_is < C_sort_or_rework
-              AND engineering provides documented justification
-
-Where:
-  Risk_functional = P(failure in use) × Impact(failure)
-  C_use_as_is = Warranty risk increase (estimated) + documentation cost
-  C_sort_or_rework = Direct sort/rework costs + production delay costs
-```
-
----
-
-## 8. MRB Decision Process — Detailed Workflow
-
-### 8.1 MRB Meeting Structure
-
-**Frequency:** Scheduled weekly; ad hoc for urgent dispositions (safety-critical, production-blocking)
-
-**Required Attendees:**
-- Quality Engineering (chair, facilitates and documents)
-- Design/Product Engineering (functional impact assessment)
-- Manufacturing Engineering (reworkability assessment)
-- Production/Operations (schedule impact)
-- Procurement (supplier-related dispositions, commercial impact)
-- Optional: Regulatory Affairs (if regulatory implications), Customer Quality (if customer notification required)
-
-**Standard Agenda:**
-1. Review of new NCRs pending disposition (by priority: safety first, then production-blocking, then age)
-2. Presentation of data package per NCR (measurements, photographs, process data)
-3. Engineering assessment of functional impact
-4. Disposition decision with documented rationale
-5. Review of aging NCRs (> 15 days without disposition)
-6. Review of MRB metrics (volume, cycle time, cost)
-
-### 8.2 MRB Documentation Requirements
-
-Each MRB disposition must include:
-
-| Element | Purpose | Who Provides |
-|---|---|---|
-| NCR number and description | Identification and traceability | Quality Engineering |
-| Part number, revision, quantity | Scope of disposition | Quality Engineering |
-| Specification violated (clause, dimension, requirement) | Clarity on what's nonconforming | Quality Engineering |
-| Measurement data (actuals vs. tolerances) | Evidence base for disposition | Quality Engineering / Inspection |
-| Photographs (if applicable) | Visual evidence | Quality Engineering / Inspection |
-| Engineering justification (for use-as-is or repair) | Technical rationale for accepting deviation | Design/Product Engineering |
-| Risk assessment (for safety-related items) | Formal risk evaluation | Design/Product Engineering + Quality |
-| Customer approval reference (if required) | Compliance with contract/standard | Quality Engineering |
-| Disposition decision | The decision itself | MRB consensus |
-| Signatures of all MRB members | Accountability and traceability | All attendees |
-| Cost impact | Financial tracking for COQ | Quality Engineering + Finance |
-| CAPA reference (if initiated) | Link to systemic corrective action | Quality Engineering |