Worked example 04 · Custom manufacturing

The drawing changed.
Production did not.

An approved revision only protects the business when every affected job, supplier and inspection instruction changes with it.

$46,920

Potential net savings / year
After recurring control costs.

Research-based composite. Business figures, savings and risk ratings are modeled assumptions. Proposed controls have not been validated with a business.

The bottleneck

Where the work gets stuck.

The proposed bottleneck is production release after a design change. Approval and distribution are treated as the same event, but nobody verifies that all affected objects and work in process have a usable disposition. The shop is fast at making parts from an incompletely controlled instruction set.

The proposed improvement

Change how the work moves.

Link drawing changes to every affected job, supplier, program and inspection instruction.

8 to 3Scrapped parts / month · modeled

48 to 24Paid rework overtime hours / month · modeled

Read the business situation

Engineering releases a new drawing by email. Purchasing has already ordered to the old specification. A printed traveler remains at the machine. The night shift uses a program whose revision is not visible. Quality detects the mismatch after parts are completed. The team absorbs scrap, repairs and overtime, then repeats the same handoff on the next change.

60 employees, engineering-to-order work, purchased components and multiple production shifts. All quantities are scenario assumptions.

Follow the work.

Proposed workflow: make the next action and responsibility explicit.

01Assess changeAffected jobs + suppliers

02Approve effectivityDate / serial / work order

03Disposition old workUse / rework / scrap / hold

04Verify releaseDrawing + BOM + program

05Check first articleQuality authorizes next lot

What needs to change

Change impact and effectivity recordEngineering identifies affected parts, BOMs, programs, drawings, tools, fixtures, suppliers and inspection steps. State the first applicable order, serial or date.

Disposition existing inventory and WIPFor each affected lot, engineering and quality authorize use-as-is, rework, scrap or hold. Record customer approval where required. Do not assume new revision means blanket disposal.

Point-of-use release verificationDocument control retires obsolete copies and confirms current traveler, program and work instruction. Each shift acknowledges the released change.

First-article and independent releaseQuality verifies changed characteristics using the authorized plan before full production. Any mismatch holds affected work and triggers containment.

How to verify the bottleneck

Hypothesis	Evidence to inspect	Proposed test
Obsolete instructions remain in use	Compare point-of-use print, program and traveler with approved revision.	Audit ten active jobs across both shifts.
WIP has no change disposition	Trace open jobs and purchased stock affected by one ECO.	Account for every lot before release.
The issue is design error, not propagation	Separate technically incorrect design from outdated correct design.	Classify 20 nonconformances by initiating cause.
Suppliers miss a revision change	Match PO revision, supplier acknowledgment and received certificate.	Trace five changed purchased components end to end.

The capacity calculation

Measure	Calculation	Modeled implication
Material waste reduction	(8 - 3) scrapped parts/month	5 purchased-material losses avoided
Paid repair overtime reduction	48 less 24 hours/month	24 hours/month avoided
Regular-time rework capacity	80 less 40 hours/month	480 hours/year released; not monetized
Release acceptance test	One approved revision across affected objects	No unresolved WIP disposition

Example: change release and effectivity record

Controlled object	Proposed revision / disposition	Release evidence
Drawing BR-214 + BOM	Rev D replaces C from WO-9032	Engineering release + linked BOM
WIP lot L-71 / 12 parts	HOLD; engineering evaluates rework	Signed lot disposition before movement
CNC program + inspection	Program D; inspect changed feature	Program check + first-article approval

The implementation plan

Days 1-7Engineering + quality

Trace two changes; classify 20 nonconformances.

Evidence: Propagation failure separated from design and execution errors.

Days 8-14Document control

Pilot effectivity and WIP disposition on one product family.

Evidence: All affected lots and controlled objects accounted for.

Days 15-30Shift leads + purchasing

Extend acknowledgments to all shifts and changed suppliers.

Evidence: No uncontrolled revision at point of use in sampled jobs.

Days 31-90Quality + analyst

Track separate scrap and repair populations; test containment.

Evidence: Matched mix, stable acceptance and reconciled avoidable costs.

What to measure

Measure	Definition	Target	Owner / review
Release completeness	Changed jobs with all required linked objects	100% before release	Document control / each job
Revision-related scrap	Parts scrapped for wrong revision per month	8 to 3	Quality / monthly
Repair overtime	Paid repair hours on separate repairable part IDs	48 to 24 monthly	Payroll + quality / monthly
Traceability	Affected lots with signed disposition	100%	Engineering / each change

How to validate the result

Compare the same product families and change intensity over several months. Use nonconformance cause evidence rather than labeling every defect a revision failure. Verify purchased-material savings net of salvage and credits. Confirm that reduced repair overtime is paid time actually removed.

Show the financial effect.

This models avoidable operating expenditure. Time released without a reduced payment is reported separately as capacity.

Financial line	USD
Purchased material avoided	$31,200
Repair overtime avoided	$18,720
Gross annual benefit	$49,920
Recurring annual control cost	$3,000
Annual net run rate	$46,920
First-year net benefit	$29,100

What if the improvement is smaller?

Adjust the share of the modeled improvement achieved. Control and setup costs stay the same.

Modeled improvement achieved100%

ANNUAL NET ESTIMATE$46,920FIRST YEAR AFTER SETUP$29,100

First year: 10 benefit months, less the full setup allowance. Results are illustrative, not a guarantee.

Scrap savings use unrecoverable purchased material only, net of salvage or supplier recovery. Overtime savings use a separate population of repairable parts. These populations must remain separate to avoid counting the same loss twice.

Baseline inputs and calculations

These inputs describe the 100% modeled case. The slider changes the share of the proposed improvement achieved.

Illustrative assumption	Value	Units
Scrapped parts before	8	per month
Scrapped parts after	3	per month
Unrecoverable material per part	520	USD/part
Calendar months	12	months/year
Repair overtime before	48	hours/month
Repair overtime after	24	hours/month
Avoidable overtime cost	65	USD/hour
Recurring document-control cost	250	USD/month
One-time implementation allowance	10,000	USD
Benefit months in first year	10	months

Purchased material avoided: (8 - 3) x $520 x 12

Repair overtime avoided: (48 - 24) x $65 x 12

Gross annual benefit: Separate scrap and repair populations

Recurring annual control cost: $250 x 12

Annual net run rate: Gross benefit less recurring cost

First-year net benefit: Annual net x 10/12 - $10,000

What is included and excluded

No fixed payroll reduction, revenue from released capacity, assumed customer retention, or full standard-cost scrap value is included. Additional software, qualification or customer approval costs beyond the stated allowance require a revised estimate.

The event includes replacement and recovery costs that can overlap scrap and rework measures. The risk illustration is separate and must not be added to the annual savings model.

Make each risk actionable.

Eight modeled risks. Assessment horizon: one annual delivery program.

0Critical5High3Moderate0Low

Current ratings are scenario assumptions. Select a risk to see its mitigation, owner and response.

01Customer quality Specialist reviewWrong-revision product escapes and requires expensive field replacement.15 · High

The risk: Wrong-revision product escapes and requires expensive field replacement.

Existing control · assumed: Final checks use revision information from the traveler.

Proposed mitigation: Verify approved effectivity at first article and final release; link serials to actual revision.

Owner & timing: Quality manager
Day 21 from pilot start.

Warning trigger: Any mismatch between traveler, approved drawing and customer order.

Contingency: Contain affected lots; notify authorized customer contact and agree disposition.

How to verify: Revision trace, first-article record and containment test.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L3 × I5 = 15. Target: L2 × I5 = 10. Impact 5 requires specialist review regardless of total score.

02WIPEngineering changes leave open lots without a disposition and obsolete parts continue moving.12 · High

The risk: Engineering changes leave open lots without a disposition and obsolete parts continue moving.

Existing control · assumed: Email asks supervisors to be careful.

Proposed mitigation: List all affected stock and WIP; require authorized disposition before movement.

Owner & timing: Manufacturing engineer
Day 14 from pilot start.

Warning trigger: Affected lot has no recorded use, rework, scrap or hold decision.

Contingency: Quarantine lot; evaluate fit, function and customer requirements.

How to verify: Reconciled affected-lot list and signed disposition.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L4 × I3 = 12. Target: L2 × I3 = 6.

03SupplierA supplier continues making the old revision after the internal change.12 · High

The risk: A supplier continues making the old revision after the internal change.

Existing control · assumed: Updated print emailed without acknowledgment.

Proposed mitigation: Update PO revision and effectivity; require supplier acknowledgment for changed requirements.

Owner & timing: Purchasing lead
Day 14 from pilot start.

Warning trigger: Changed PO has no acknowledgment within two working days.

Contingency: Hold affected receipt; agree correction or alternate supply with engineering.

How to verify: Revised PO, acknowledgment and incoming verification.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L3 × I4 = 12. Target: L2 × I4 = 8.

04ConfigurationDrawing, BOM, CNC program or work instruction revisions disagree at release.16 · High

The risk: Drawing, BOM, CNC program or work instruction revisions disagree at release.

Existing control · assumed: Versions stored in separate folders.

Proposed mitigation: Use a release checklist linking all controlled objects to one effectivity record.

Owner & timing: Document controller
Day 14 from pilot start.

Warning trigger: Any controlled object missing from the release check.

Contingency: Hold job release; reconcile configuration before restart.

How to verify: Completed release checklist and approved linked files.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L4 × I4 = 16. Target: L2 × I4 = 8.

05Shift handoffThe night shift uses an obsolete printed instruction or local program copy.12 · High

The risk: The night shift uses an obsolete printed instruction or local program copy.

Existing control · assumed: Day-shift briefing only.

Proposed mitigation: Retire obsolete point-of-use copies and obtain acknowledgment from every affected shift.

Owner & timing: Production supervisor
Day 21 from pilot start.

Warning trigger: Unsigned shift acknowledgment or old print found at workstation.

Contingency: Pause affected setup; replace instruction and verify work already made.

How to verify: Shift roster acknowledgment and workstation audit.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L4 × I3 = 12. Target: L2 × I3 = 6.

06Engineering Specialist reviewUse-as-is or rework disposition is made without required technical authorization.10 · Moderate

The risk: Use-as-is or rework disposition is made without required technical authorization.

Existing control · assumed: Supervisor resolves fit issues locally.

Proposed mitigation: Engineering and quality retain disposition authority; identify customer approval requirements.

Owner & timing: Engineering lead
Before pilot.

Warning trigger: Unapproved deviation or repair instruction proposed.

Contingency: Hold affected product pending authorized technical assessment.

How to verify: Authorized deviation, repair plan and required approvals.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L2 × I5 = 10. Target: L1 × I5 = 5. Impact 5 requires specialist review regardless of total score.

07AvailabilityA central document system is unavailable and staff use uncontrolled copies.9 · Moderate

The risk: A central document system is unavailable and staff use uncontrolled copies.

Existing control · assumed: Ad hoc local downloads.

Proposed mitigation: Define a controlled offline pack with revision, validity and revalidation rule.

Owner & timing: Document controller
Day 30 from pilot start.

Warning trigger: Released document cannot be retrieved at point of use.

Contingency: Use approved offline pack or stop affected release; reconcile on recovery.

How to verify: Offline pack test and recovery reconciliation.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L3 × I3 = 9. Target: L2 × I3 = 6.

08MeasurementScrap material, absorbed labor and rework overtime are counted twice.9 · Moderate

The risk: Scrap material, absorbed labor and rework overtime are counted twice.

Existing control · assumed: Quality and payroll reports use different cause codes.

Proposed mitigation: Separate scrapped and repairable part IDs; reconcile material, salvage and overtime.

Owner & timing: Operations analyst
Day 28 from pilot start.

Warning trigger: Same part loss appears in both savings categories.

Contingency: Remove duplicated amount and recalculate public financial example.

How to verify: Part-ID cost bridge and payroll reconciliation.

Review & status: Weekly during pilot.
Proposed; unvalidated.

Modeled current: L3 × I3 = 9. Target: L2 × I3 = 6.

View the risk map

Likelihood ↑

Impact increases →

Each number matches a risk in the register. Select an occupied cell to open a risk.

Higher likelihood and impact move a risk toward the top right. The Target view shows conditional ratings after the proposed controls.

Where several risks share a cell, it opens the first listed risk. All remain available in the register above.

What could one risk cost?

A wrong-revision batch reaches a customer and requires field containment or replacement.

Scenario	Probability × event loss	Expected loss
Before	20% × $90,000	$18,000
With proposed controls	8% × $90,000	$7,200
Expected-loss reduction	Before less after	$10,800
Separate mitigation cost	Over this risk horizon	$2,500
Net modeled risk benefit	Reduction less mitigation cost	$8,300

The $90,000 event impact assumes $35,000 of replacement purchased content, $25,000 of incremental field labor and $30,000 of logistics and customer recovery. Safety harm is not assigned a dollar value. Probabilities are assumed.

The event includes replacement and recovery costs that can overlap scrap and rework measures. The risk illustration is separate and must not be added to the annual savings model.

How the ratings work

Score = likelihood × impact, each rated from 1 to 5. Scores 1–5 are Low, 6–11 Moderate, 12–19 High and 20–25 Critical. These are scenario judgments over the stated assessment horizon.

Likelihood: 1 below 5%; 2 from 5% to below 20%; 3 from 20% to below 40%; 4 from 40% to below 70%; 5 at least 70%. Impact: 1 below $1,000; 2 below $5,000; 3 below $20,000; 4 below $75,000; 5 at least $75,000 or potentially severe safety consequences. Impact-5 safety or technical issues require specialist review regardless of score.

Research sources & assumptions

Change Control? ↗Reddit · r/manufacturing contributorsIndexed post and comment excerpts. Company identity and costs not verified.
Boss walks in and says "Those look pretty." *all scrap* ↗Reddit · r/Machinists contributorsIndexed post and comment excerpts. Multiple anonymous experiences; none are LeanLine client results.
Effective Engineering Change Management in Manufacturing ↗LinkedIn · Eric Ciampoli (MBA)Public authored post opened. Consulting commentary with a commercial interest; no outcome figures adopted.
Change Approval Isn't Enough: Propagation Matters ↗LinkedIn · Andrew SparrowPublic authored post opened. Practitioner perspective; not evidence of a specific loss probability.

Public discussions informed the problem selection. LeanLine Advisory developed the composite scenario, diagnosis and proposed controls. All company profiles, financial inputs and risk ratings are illustrative assumptions. The sources do not establish an industry-wide ranking of these issues.

One bottleneck.
A measurable difference.

Find a problem that feels familiar.

The crew arrives.
The work is not ready.

The extra work is done.
The revenue is missing.

Machines are busy.
Orders are still waiting.