An analysis of process vs. inspection capabilities in fabricated, engineered-to-order supply chains

Supplier Quality (SQ) is an important process used by Engineer-Procure-Construct (EPC) contractors to ensure that products are delivered according to specifications and free of non-conformances from these specifications. EPC contractors design and oversee the fabrication of multiple products and large engineering components which are classified in different levels of criticality in accordance with the probability of failure and severity of the consequences of failure associated with these elements. The more critical the component, the more time and effort EPC contractors and their suppliers invest in the SQ process. The current SQ processes deployed by contractors revolve around a culture of inspection. Inspection is used extensively throughout the procurement process (from fabrication to installation) to ensure that the components delivered and installed at the project site are in conformance with all specifications required.;"You cannot inspect quality into a product." Harold F. Dodge's words have influenced the image of inspection in production systems for decades. However, inspection remains part of most production systems as there are certain cases where non-conformances in products cannot be tolerated. This research studies a system where inspection is a central component and analyzes its effects on the final outcome of the process.;This thesis is part of a study conducted on the SQ process by the Construction Industry Institute's (CII) Research Team-308. Its purpose is to use data collected by this team to develop a computer simulation model that analyzes the SQ process. Discrete event simulation is used to develop the model in this case through the use of software EZStrobe. The model represents the dynamic nature of SQ, the interaction between different sub-processes (fabrication, release to site and installation), and the impact that reliability of individual tasks has on the quality of the final product delivered and the cost incurred if the product contains non-conformnace. The results of the simulation are analyzed and a relationship is identified between the process capability (probability that products are fabricated correctly by the manufacturer) and the inspection capability (probability that an inspection can detect and correct non-conforming products).;The results show that both process and inspection capabilities greatly affect the outcome of the process as well as costs incurred due to non-conformance, however, the inspection capability has a greater impact on both. It is calculated that currently companies that deploy the SQ process operate at process and inspection capabilities of approximately 90% and 75% respectively; however, values of 85% to 92% process capability and 70% to 85% inspection capability are plausible given industry data. The cost of non-conforming output was also assessed, and was found to vary dramatically across the range of process and inspection capabilities modeled.