Current advances in manufacturing technology have made the automotive market much more competitive. Customers

are seeking the best products at the lowest possible cost. To maintain the best possible working relationship, it is every supplier’s responsibility to ship products that meet the requirements and are on time. This paper will focus on how internal scrap costs can directly correlate to externally received customer complaints. Quality scrap is a large driver in cost, shipment timing, and customer satisfaction. Every part made internally that is defective is at risk of being shipped to the customer. The higher the scrap cost the more likely a supplier is to ship a bad part. This will cause customers to lose faith in the supplier’s ability to produce a quality part and may lead to the customer seeking a different supplier in the future. To verify this relationship, a study was done on 4 different business groups in a company, comparing the percentage of internal scrap vs. overall sales per month and the complaints received. The results show that there is a relationship between internal scrap cost and customer complaints, but there are other factors that can contribute.

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Mr. Steven Picklesimon