Haiteng Engineering: Quality Control System Analysis

(Take-home Assignment)

Assignment Overview

Haiteng Engineering is evaluating two automated quality inspection systems to replace their current manual Visual Quality Inspection (VQI) process, which has a 62% OEE and is creating significant production bottlenecks, processing only 160 units against a theoretical capacity of 300 units daily.

  1. Vendor-provided Automated Optical Inspection (AOI): ¥1.2M + ¥125K annual maintenance
  2. Custom in-house Integrated Quality Management System (IQMS): ¥2.2M + ¥250K annual maintenance

Deliverables & Grading (100 points)

  1. Technical Analysis Notebook (60 points)
    • Part 1: Vendor AOI Analysis (25 points)
    • Part 2: Custom Solution Analysis (35 points)
  2. Strategic Recommendation Memo (40 points)
    • Maximum 2 pages
    • Professional memo format
    • See Part 3 for requirements

Submission Requirements

Submit TWO files:

  • Jupyter Notebook: Assignment-Haiteng-FIRSTNAME-LASTNAME.ipynb
  • Strategic Memo: Memo-Haiteng-FIRSTNAME-LASTNAME.pdf

You can download helpful starting code and all required source files from here.

Part 1: Vendor AOI Analysis (25 points)

The vendor solution has been tested on 5,040 impellers with the following confusion matrix:

Predicted: Conforming Predicted: Non-conforming
Actual: Conforming 3,603 1,152
Actual: Non-conforming 87 198

Where:

  • True Negative (TN): Conforming parts correctly passed
  • False Positive (FP): Conforming parts unnecessarily scrapped
  • False Negative (FN): Non-conforming parts incorrectly passed
  • True Positive (TP): Non-conforming parts correctly caught

Manufacturing Parameters:

  • Production cost: ¥2,280 per impeller
  • Return shipping: ¥200 per non-conforming part
  • Customer compensation: ¥3,000 per quality escape
  • Annual production: 50,000 units
  • Final inspection accuracy: 99%

Tasks:

  1. Calculate key performance metrics:

    • Inspection Accuracy = (TN + TP) / Total parts
    • Unnecessary Scrap Rate = FP / (FP + TN)
    • Quality Escape Rate = FN / (FN + TP)

  2. Calculate annual costs:

    • Cost of scrapping good parts (false positives, assume you lose 100% of the production cost)
    • Expected return costs after final inspection
    • Total quality-related costs including maintenance

Part 2: Custom Solution Analysis (35 points)

You will work with Haiteng’s prototype Quality Inspection System (QIS) to analyze its performance. The QIS uses computer vision to inspect impellers and outputs conforming/non-conforming probabilities for each part. Your tasks:

  1. Test and understand the inspection system (15 points)
    • Run inspection on a single test impeller
    • Implement batch inspection for the full test dataset
    • Store inspection results (probabilities) for analysis
  2. Analyze system performance (20 points)
    • Create confusion matrix using 0.5 as threshold (classify as non-conforming if probability > 0.5)
    • Calculate performance metrics:
      • Inspection accuracy
      • Unnecessary scrap rate
      • Quality escape rate
    • Calculate annual costs including:
      • Cost of scrapping good parts
      • Expected return costs after final inspection
      • Maintenance costs
    • Compare performance and costs to vendor solution
    • Determine if custom solution can achieve 1-year payback

Part 3: Strategic Analysis (40 points)

Prepare a professional memo addressing:

  1. Quantitative Comparison (15 points)

    • Cost analysis of both solutions
    • Performance metrics comparison
    • ROI calculations

  2. Strategic Implications (15 points)

    • Impact on operational efficiency
    • Quality control capabilities
    • Employee considerations
    • Customer relationships
    • Future scalability
    • … (prioritize based on your informed opinion!)

  3. Recommendations (10 points)

    • Clear recommendation with supporting evidence
    • Implementation considerations
    • Risk mitigation strategies

Final Notes

Evaluation Criteria

  • Technical accuracy (40%)
  • Analytical depth (40%)
  • Professionality (20%)

Important Notes

  • All quality metrics must include proper units (ppm, OEE%)
  • Late submissions receive zero credit
  • Code must be properly commented and documented
  • Memo must be professional quality and not exceed 2 pages
  • If you can’t finish everything, do as much as you can to receive partial credit.