Sharing Quality‐Distribution Information for the Selective Assembly of Intermediary Components in the Automotive Industry

Toyin Clottey and W. C. Benton

Production and Operations Management, 2020, vol. 29, issue 1, 174-191

Abstract: This study investigates the value of a supplier sharing information about the quality‐distribution (i.e., dimensional mean or variance) of components with an assembler who matches such parts with the selective assembly of an intermediary component. Selective assembly is a strategy that is widely used by high‐precision manufacturing companies to gain a competitive advantage in product quality. The use of inexpensive intermediary components (e.g., bearings) to ensure that all mating components are matched with acceptable clearance is a contemporary way of reducing shortage and surplus component costs associated with the traditional fixed‐bin selective assembly process. We develop and analyze a Bayesian model for information sharing in this environment, with results indicating that substantial savings occur with the use of shared information from the supplier in a fixed‐bin selective assembly of an intermediary‐component (FBSAI) context. However, there is a hierarchy regarding benefits, whereas the sharing of information which includes the process mean is most beneficial, and the sharing of only process variance information is least beneficial. The savings can assist the assembler in determining the investment required to create and maintain a profitable quality‐distribution information‐sharing network of suppliers, thus making the shared information advantageous for both the buying and selling organization.

Date: 2020
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