A decision-making model for managing non-conforming
products: a case study in the food processing industry
by
M. O. Nieboer B7071462 | S3137872
DDM Operations Management
Educational institutions:
MSc Operations and Supply Chain Management Newcastle University Business School
〰️
MSc Technology and Operations Management University of Groningen Faculty of Economics and Business
Supervisors:
Abstract
The aim of this research is to design a making model which supports decision-makers in making more substantiated decisions for non-conforming products to ultimately maximize production yield and minimize total production costs. To achieve this, an explorative case study in the food processing industry was conducted. The study revealed 16 influence factors and 15 consequences which play a certain role in the decision-making process of dealing with non-conforming products. Besides, the decision-making process was examined which served as an input for the constructed decision-making model, which considers five options in total. The model provides guidelines for decision-makers in the process of handling non-conforming products effectively. Even though the model offers a complete overview of the influence factors and consequences per option, the model should not be regarded as the one and only right way to handle non-conforming products. Each company within the food processing industry is situated in a unique context, which implies that the model should always be adapted to the context of the organisation. Using this model ultimately results in more substantiated decision-making, which supresses the negative consequences, reduces total production costs, and improves customers’ satisfaction.
Table of Contents Preface V List of Figures VI List of Tables VI List of Abbreviations VI 1. Introduction 1 2. Background 4 2.1 Non-conforming products 4 2.2 Rework 5 2.3 Disposal 6 2.4 Donation 6 2.5 Selling 7
2.6 Impact on business performance 8
3. Methodology 12
3.1 Research method 12
3.2 Case selection and description 12
3.3 Data collection 14
3.4 Data analysis 18
4. Results 20
4.1 Managing NCPs 20
4.2 Options for NCPs 22
4.3 Influence factors in decision-making 27
5. Discussion 37
5.1 Interpretation of results 37
5.2 Comparison with literature 38
5.3 Decision-making model for NCPs 39
6. Conclusion 43
References 45
Appendix A: Interview protocol 48
Appendix B: Coding scheme 50
Appendix C: Coding tree 52
Appendix D: Flowchart rework streams 56
Appendix E: Example of spreadsheet-file blocked stock 58
Appendix F: Report of focus group session 60
Appendix G: Importance score calculation 61
Preface
Before you lies the dissertation “A decision-making model for managing non-conforming products: a case study in the food processing industry”, the basis of which is a case study on the decision-making process of dealing with non-conforming products that was conducted among an explorative case study at The Kraft Heinz Company (TKHC) in Elst, The Netherlands. It has been written to fulfil the graduation requirements of the Double Degree Programme at the Newcastle University Business School and the University of Groningen, Faculty of Economics and Business. I was engaged in researching and writing this dissertation from July to December 2018.
The research project was undertaken at the request of TKHC where I undertook an internship. My research aim was formulated together with my supervisors, Onur Kiliç and Ying Yang. The research was difficult but conducting extensive investigation has allowed me to answer the questions that we identified. Fortunately, Ms. Yang, Mr. Kiliç, and Mr. Van Donk and my tutor from TKHC, Mr. Schrijver, were always available and willing to answer my queries.
I would like to thank my supervisors for their excellent guidance and support during this process. I also wish to thank all the interviewees I have conducted interviews with, without whose cooperation I would not have been able to conduct this analysis. I would also like to thank Daan Schrijver in particular, whose guided me at the company throughout my internship. To my other colleagues at TKHC: I would like to thank you for your wonderful cooperation as well. It was always helpful to bat ideas about my research around with you. I also benefitted from debating issues with my friends and family, especially with Martijn Stapelbroek. If I ever lost interest, you kept me on track and motivated. My parents deserve a particular note of thanks: your wise counsel and kind words have, as always, served me well.
I hope you enjoy your reading.
Best regards,
List of Figures
Figure 1. Simplified production system including the decision-making process. 5 Figure 2. Framework of the issues centred around the decision-making process of NCPs. 11 Figure 3. Simplified production process of the case company including the research scope. 13
Figure 4. Decision-making model for dealing with NCPs. 41
List of Tables
Table 1. Brief literature review of consequences of NCPs and alternatives to rework. 9
Table 2. Overview of interviewees within the unit of analysis. 16
Table 3. Overview of consequences per decision. 23
Table 4. Overview of influence factors per option. 27
Table 5. Total importance score per category. 28
Table 6. Legend of symbols used in Figure 4. 40
List of Abbreviations
FPI Food Processing Industry
KPI Key Performance Indicator
NCP Non-Conforming Product
QN Quality Notification
QT Quality Team
1. Introduction
To stay competitive in today’s business environment, it is crucial to provide customers with a constant high standard of quality at all times (Gouiaa-Mtibaa, Dellagi, Achour, & Erray, 2017; Tai, 2013). The opposite could lead to a loss in sales and customers (Sonntag & Kiesmüller, 2018). This is an important issue particularly in the food processing industry (FPI) where production yield is often unreliable due to, for instance, the deviation in the composition of raw materials and production processes such as mixing and pasteurizing (Inderfurth & Kiesmüller, 2015). These may eventually lead to sub-standard products which cannot be sold to the customer as they currently are (Goerler & Voß, 2016). These products could, for instance, be reworked, disposed, donated, or sold with sub-standard quality (Biswas & Sarker, 2008; Hossain & Sarker, 2016; Jaber & Khan, 2010). Each of these options has different implications on organisational aspects such as operational costs and production losses (Sonntag & Kiesmüller, 2018). Thus, determining the most suitable option while considering its consequences is an important managerial problem.
So far, literature has provided an overview of the issues centred around this decision-making problem in the FPI (Chiu, Chen, & Chang, 2008; Flapper & Teunter, 2004; Flapper, Fransoo, Broekmeulen, & Inderfurth, 2010; Hossain & Sarker, 2016; Sonntag & Kiesmüller, 2018). The option to rework a non-conforming product (NCP) has been widely investigated throughout the years. Flapper et al. (2002) reviews the characteristics of the FPI and presents a definition of the term rework, which is the process of transforming NCPs into products that are conforming to the required specifications (Jaber & Khan, 2010). The production of NCPs is recognized as an unavoidable process within the FPI due to recurring production issues like mixing, packaging, and pasteurizing problems (Chiu, 2007; Inderfurth, Lindner, & Rachaniotis, 2005). Over the past decade, extant studies outlined alternative decisions for NCPs (Biswas & Sarker, 2008; Chiu et al., 2008; Hossain & Sarker, 2016; Sonntag & Kiesmüller, 2018). When a NCP is detected, the decision-making problem begins in which the decision-maker has to consider the most suitable option for that NCP.
academics are interested in discovering solutions for problems around handling NCPs. Although the issues around NCPs are widely investigated, current body of literature lacks in investigating the decision-making problem of NCPs and mapping out the influence factors which are associated with this decision-making process. Yet, the consequences associated with each decision are partly examined in literature. Resulting in insufficiently substantiated decision-making for NCPs within the FPI. Recent publications around this topic lay emphasis on making optimal decisions for NCPs, in which only rework and disposal are considered as the options (Chiu et al., 2008; Hossain & Sarker, 2016). Furthermore, Sonntag & Kiesmüller (2018) indicates that future research should emphasize the decisions companies can make whether NCPs should be reworked or disposed. Although the options donating and selling are mentioned in literature, they are not evaluated thoroughly. Adding donating and selling to the considerable options results in a more complex, but more complete, decision-making process. Therefore, this study attempts to investigate how decisions for NCPs are made in practice, discover the influencing factors of each option, and the consequences which are associated with each of the four examined options. The aim of this research is to design a making model which supports decision-makers in making more substantiated decisions for NCPs to ultimately maximize production yield and minimize total production costs. Moreover, the discovered influencing factors are being integrated into the decision-making model to show their role and relationship with each of their associated decisions. This research attempts to explore the positive and negative consequences of each decision to eventually demonstrate decision-makers which implications are brought with each decision. The model will be constructed with the gathered knowledge of how decisions are being made together with the discovered influence factors and consequences. Therefore, the forthcoming research attempts to answer the following three research questions.
1. How are decisions currently made in case a NCP is detected?
2. What positive and negative consequences are related to the option to rework, dispose, donate, or sell NCPs?
3. What influence factors are associated with the option to rework, dispose, donate, or sell NCPs?
considering multiple options and exploring influence factors and consequences associated with each decision. Future research directions could be directed towards validating the influence factors at other companies within the FPI. Besides, the decision-making model could be verified at other companies to emphasize its generalizability within the context of the FPI.
2. Background
This section provides the theoretical background of the discussion centred around the decision-making problem for NCPs. First, the process of dealing with NCPs is described and an overview of the rework process will be provided. Then, alternatives to rework are described. Finally, the relevance of the decision-making problem regarding operational and strategic level is outlined.
2.1 Non-conforming products
quality control. Also, the three alternative options to rework are presented and the figure also shows the position where the influence factors make their entrance in the decision-making process.
Figure 1. Simplified production system including the decision-making process.
2.2 Rework
The rework process comprehends all the required activities to transform NCPs into products that are of the acceptable quality (Flapper et al., 2002; Flapper & Teunter, 2004). Reworking NCPs can be very profitable, especially when the disposal costs are high and if materials are expensive and limited in their availability (Flapper & Teunter, 2004; Inderfurth et al., 2005). Reworking NCPs can contribute to the sustainable development of a company, as it decreases overall disposal and allows the manufacturer to maintain a closed-loop manufacturing system (Goerler & Voß, 2016; Guide, 2000; Inderfurth et al., 2005; Lin et al., 2017). Above arguments provide an indication of the significance of this decision whether to rework or opt for an alternative purpose. The rework process takes place either before products are distributed to the customers or after problems have occurred in the field. It is usually carried out in batches and it can be executed in two ways (Goerler & Voß, 2016; Inderfurth et al., 2005). First, in-line rework, in which the same resources (people, machines, materials) are used for both regular production and rework. Second, off-line rework, where a separated line is installed to perform rework activities (Flapper et al., 2002; Goerler & Voß, 2016; Hossain & Sarker, 2016). The main disadvantage of in-line rework is that the regular production may be hampered. On the other hand, NCPs that are directed towards a separate production line requires additional space, machines, and operators (Hossain & Sarker, 2016). Furthermore, the speed of rework is vital, especially in the FPI, as food products are perishable. When a NCP waiting to be reworked
Production
process Quality control
exceed its deterioration time limit, it must be disposed eventually (Inderfurth, Janiak, Kovalyov, & Werner, 2006). Additionally, several academics stress the importance of reworking NCPs, as it could affect the corporate image of the company (Flapper & Teunter, 2004; Goerler & Voß, 2016; Inderfurth et al., 2005; Sonntag & Kiesmüller, 2018).
2.3 Disposal
The first alternative to rework is disposing NCPs. Disposal can be described as scrapping all the designated products, which in turn means lost in resources (Jaber & Guiffrida, 2008). Literature suggests that the terms scrap and disposal can be used interchangeably. In this study, we use the term disposal to refer to this process. Disposing NCP implies several undesired consequences, for instance, wasted materials, labour, and machine time (Jaber & Guiffrida, 2008). Although disposing NCP brings several negative consequences, the products do not have to flow through the physical rework process, which could be more expensive than disposing them. Furthermore, disposal is possible without any delay in time, whereas the rework process requires a certain positive rework time (Sonntag & Kiesmüller, 2018). Additionally, in contrast with rework, disposal neither involves machine nor people capacity. Disposed items directly leave the production process of the factory, while reworkable products re-enters the product process (Sonntag & Kiesmüller, 2018). Since the rework process is perceived to be imperfect, the reworked items that fail to be repaired also become disposed products (Lin et al., 2017). Several academics mathematically explored and approached the decision between disposal or rework (Chiu et al., 2008; Flapper & Teunter, 2004; Sonntag & Kiesmüller, 2018). Besides, incentives to avoid the disposal of items are growing, as green production has become a central interest of several stakeholders like governments and customers (Goerler & Voß, 2016). Moreover, disposal bans have been established over the past years and many customers attach great importance to an environmental-friendly image of the company where they buy their products from (Goerler & Voß, 2016). Hence, these developments are not in favour of disposing the NCP.
2.4 Donation
(Goerler & Voß, 2016; Inderfurth et al., 2005). This could eventually become a deciding purchasing factor for consumers, especially in a market where price and quality among competing products are equal (Dean, 2003). Moreover, the sales could be influenced as well, which provides a competitive advantage especially in the FPI where it is difficult to differentiate between the products (Chen, 2010; Flapper & Teunter, 2004; Sonntag & Kiesmüller, 2018). More benefits of donating can be mentioned. If products are donated instead of disposed, the total waste of the firm will not be increased. However, donation brings several drawbacks as well. Donated products do not generate direct sales incomes in terms of money and can therefore only be regarded as an expense for the producer. Hence, donating NCPs is considered to be more favourable compared to disposal.
2.5 Selling
2.6 Impact on business performance
Table 1. Brief literature review of consequences of NCPs and alternatives to rework.
Operational consequences Strategic consequences Alternatives to rework
Inventory costs Production costs Output rate Cycle time Lot sizing Process costs Waste policy Environmental performance Corporate
image Dispose Donate Sell
Author(s) Year
Zargar 1995 √
Chan, Ibrahim & Lochert 2003 √ √ √ √ √
Sha & Hsu 2004 √ √ √
Flapper & Teunter 2004 √ √
Inderfurth et al. 2005 √ √ √ √ √ √
French & LaForge 2006 √ √ √
Biswas & Sarker 2008 √ √
Chui, Chen & Chang 2008 √ √ √ √
Jaber & Khan 2010 √
Hadjinicola 2010 √
Chen 2013 √ √
Chiu et al. 2013 √ √ √ √
Tai 2013 √
Hossain & Sarker 2016 √ √ √ √
Goerler & Voß 2016 √ √ √
Haidar et al. 2016 √ √ √ √
Chen 2017 √ √
Gouiaa-Mtibaa et al. 2017 √ √
Although current body of literature considers multiple options in handling NCPs, it still lacks in providing clear guidelines for managers in considering these specific options. The context in which the decision has to be made can be clarified by mapping out the factors which influence each decision. Theoretical insights showed that the current body of literature lacks in providing the influence factors which are associated with each of the four options, while these influence factors are required to ultimately deliver a substantiated decision-making model. Although many consequences are provided by literature, a clear overview of these consequences per option is not provided yet. Therefore, this study attempts to add additional consequences to the current identified consequences. All discovered consequences are eventually put together and incorporated into the decision-making model. This decision-making model serve as an aid for managers in the process of handling NCPs to eventually make quicker and more substantiated decisions, granted that the influence factors and consequences per decision are identified. An overall frame of the research problem is presented in Figure 2 below, summarizing all relevant issues around this research topic.
Figure 2. Framework of the issues centred around the decision-making process of NCPs.
= already discovered = not yet discovered
3. Methodology
The methodology section addresses the method taken to successfully achieve the research goal. First, a substantiated argumentation is presented on the research method. Then, the case selection is outlined. The data collection methods and the data analysing methods follows.
3.1 Research method
To successfully achieve the goal of the study, a single explorative case study is adopted. A single case study is suitable for this research since there are many variables (influence factors and consequences for each decision) to investigate and the knowledge of context of the decisions is rather important (Yin, 2009). Furthermore, single case research is a proper method to answer “how’’ research questions (Karlsson, 2016). The researcher aims to identify underlying reasoning of how the case company settles its decision whether to rework, dispose, donate, or sell a NCP. Since little research has been done to address the decision-making problem for NCPs, an exploratory case study is adopted. The type of case study is theory building, which allows to identify linkages between influence factors, consequences, and decisions in case of a NCP (Handfield & Melnyk, 1998). In this research, influence factors which affect the decision of the purpose of NCPs are linked to the four considered options. Additionally, the consequences per decision are investigated and merged into the making model showing the decision-makers what implications are brought with each decision. An outline of how the influence factors and consequences per decision are collected and analysed is presented in Subsections 3.3 and 3.4.
3.2 Case selection and description
company is appropriate and could provide useful insights into the research problem due to the following arguments. During an initial investigation of the case company, it became evident that the production plant represents the FPI adequately. First, the case company experiences an inconsistent behaviour of its production yield and struggles with problems regarding deviations in the composition of raw materials and mixing or pasteurizing issues. Initial investigation shows that the case company copes with daily production losses in terms of NCPs, caused by issues like wrong material planning and machine deficiencies during the production runs. These issues ultimately lead to NCPs of which the final purpose has to be considered by the decision-makers within the case company. The fact that the case company commonly holds a non-conforming stock of around 400 pallets a year indicates that the case company is continuously engaged with NCPs. The daily production runs at the factory induces an average of 10 pallets of NCPs per day. They perform rework and the other three options are also executed. Above arguments provide enough substantial arguments that the selected case company is appropriate enough to investigate.
In Figure 3, the simplified production process of the case company is depicted to clarify the research scope of this study. The scope depicts the area of the physical flow that the NCP can make during the decision-making process of its disposition.
Figure 3. Simplified production process of the case company including the research scope.
Depalletizer Filler Capper Labeller Sealer Palletizer
Dry Rework station
Sell Donate
Disposal
Research area
Bottles Content Caps Labels Seal and box
Conforming stock
Non-conforming stock
Wet Rework station
3.3 Data collection
Data is collected throughout four methods. (1) an initial observation round, (2) a qualitative interview round, (3) an investigation of three quantitative data files, and (4) a focus group to validate the findings. First, the initial investigation round was held, which served as an overall observation of the processes and as a significant input for the interview questions of the qualitative data round. Further explanation follows below. Second, the qualitative data round was held in which the interviewees were asked to elaborate on how they make decisions, why they consider a specific option, and to elaborate on the consequences they perceive in opting for a specific decision. Third, three data files (i.e. Excel spreadsheet files of current stock overview of NCPs) were collected and analysed to collect additional influence factors and consequences. The quantitative data collection also serves as a justification of the influence factors and consequences discovered during the qualitative data round. Finally, a focus group is organised with the same interviewees as the qualitative data round to validate the findings from former phases. All the four data collection rounds are explained in detail below.
during all interviews. Finally, multiple sources of evidence are used and compared to discover similarities in the outcomes of the data collection phases.
(1) Initial investigation round
Multiple unstructured interviews are conducted with employees who play a role in the process of dealing with NCPs. These unstructured interviews are neither recorded nor transcribed, as it serves as an observation period to get a better understanding of the rework processes and the employees who participate in the process of dealing with NCPs. The responses and dialogues of the unstructured interviews are composed on a notepad so vital information is retained. The unit of analysis covers the group of employees who play a role in the process of handling NCPs and is analysed by interviewing eight employees from several departments. In Table 2 on the next page, an overview is presented of the unit of analysis. By interviewing these interviewees, multiple perspectives around the problem are gathered. Both tactical and operational level are addressed by interviewing managers and operational employees. As a result, an overall picture around the research problem is achieved. At the start if the research, the researcher observes and performs several activities at the rework station. The researcher asks the operators why certain products are non-conforming, what follow-up activities are performed, and how processes are arranged when a product is non-conforming. Hereby, a better understanding is developed of the rework activities and goodwill will be established with operators from the rework station. Quality inspectors were asked to elaborate on their daily tasks and how they judge a product as being non-conforming. Employees from the Logistics Department are also being questioned to elaborate on their daily activities and how they cope with NCPs. Several managers are interviewed to discuss the importance of the decisions around NCPs from a managerial perspective. After the initial interview round is conducted, the gathered information of the decision-making process is used as an input to conduct an interview protocol for the qualitative data round. The interview protocol is composed by analysing all the notes constructed during the initial investigation round. The semi-structured interview protocol can be found in Appendix A.
(2) Qualitative data round
questions about the perceived consequences and motives of each option for NCPs are asked. By doing so, influence factors, consequences, and the underlying reasoning of why the case company considers these factors are collected. The rich interview data is audio recorded, transcribed, and analysed using the transcribe coding programme ATLAS.ti. Transcribing enables the researcher to find patterns and similarities across the interviews. Inductive coding is performed to condense raw textual data into a brief, summary format. Inductive coding is performed as it provides an easily used and systematic set of procedures for analysing qualitative data that can produce reliable and valid findings. Inductive coding is performed since the researcher aims at investigating underlying reasoning for a phenomenon which is still insufficiently explored in literature. Inductive coding will be more in place than deductive coding, which intends to test an existing theory (Thomas, 2006). First, initial text is created by transcribing audio recorded interviews into a text format. Second, specific text segments are identified to structure the transcripts and dense down the text. Third, segments of text are labelled to topics to create an overview. Fourth, sub-topics within the sub-topics are created to identify individual influence factors and consequences per decision (Thomas, 2006). The coding scheme with the formulated topics, sub-topics, descriptions, and codes can be found in Appendix B. A coding tree can be found in Appendix C. The consequences derived from literature (see Table 1) will be added to the consequences derived from the qualitative data round. Both lists will be merged into one overall list after completing the coding procedure of the qualitative data round.
Table 2. Overview of interviewees within the unit of analysis.
Data collection phase
Interviewee Department Function Experience
in FPI IIR QDR FG
A Management Logistics Manager 9 years √ √ √
B Quality Assurance Quality Manager 19 years √ √ √
C Quality Assurance Quality Inspector 45 years √ √ √
D Quality Assurance Quality Inspector 30 years √ √ √
E Finance Financial Controller 43 years √ √ √
F Logistics Q-Bay Manager 19 years √ √ √
G Rework Team leader 29 years √ √ √
H Production Process Capability
Leader 30 years √ √ √
I Management Plant Manager 7 years √
J Management Site Director 29 years √
Total 10 8 8
(3) Quantitative data round
Collecting and analysing quantitative data of the case company intends to find valuable information regarding the influence factors and consequences per decision. The quantitative data files are acknowledged to be reliable, as they are developed and used by the case company for many years. The files provide additional insights into the approach by the company in handling NCPs. The collected quantitative data consists of spreadsheet files which offers insights into NCPs that are kept on stock and are waiting till a decision is made for them. These Excel spreadsheet files are continuously updated throughout the day by the case company. These files provide an overview of all the information around a NCP which has been given a non-conforming or ‘blocked’ status. Each batch of NCPs gets a quality notification (QN) number and will be physically removed from the ‘conforming’ warehouse and transported to the ‘non-conforming’ warehouse where they endure till the decision is made. These spreadsheet files show data regarding the remaining shelf life, location, number of bottles, cost of goods, and quality remarks per QN. The researcher pursues to find matching influence factors between the data of the qualitative and quantitative round. Data triangulation and internal validity are emphasised and achieved by discovering matching influence factors from the quantitative and qualitative data rounds.
(4) Validation by focus group
3.4 Data analysis
The data analysis part describes which strategies are adopted in analysing the collected data and why these strategies fit optimally. The overarching aim of the data analysis part is to identify significant patterns and trends in the data and display these findings meaningfully in the results section. An argumentation is presented for all four data collection phases.
(1) Initial investigation round
The data collected in the initial investigation round is analysed and used as an input for the interview protocol of the qualitative interview round. All the notes were collected and analysed to get an overview of all the employees who play a role in the decision-making process. The output of the data analysis activities during this initial investigation round is the interviewee list in Table 2 and the interview protocol for the qualitative interview round. The interview protocol can be found in Appendix A.
(2) Qualitative data round
After coding has been performed and resulted into influence factors and consequences per decision, the analysing part starts. The coded transcripts are analysed by exploring why specific decisions are made and why these factors are associated with each decision. Besides, the researcher analyses the coded transcripts on how certain factors influence each decision. The researcher also aims at discovering the underlying reasoning for opting for each decision and investigates how certain decisions are made. The discovered consequences are analysed on their relation with the decisions, resulting in either a positive or negative relation. This will be further explained in Section 4. As a result, rich data has been explored and underlying reasoning of the influence factors and consequences per decision are examined.
(3) Quantitative data round
coded transcripts of the qualitative data round with above spreadsheet files. For example, the researcher examines several non-conforming batches and looks at what option they have received. This round has not revealed additional factors. but quantified some of the already discovered factors from the qualitative data round. Quantifying the already discovered influence factors in emphasized internal validity and reliability of the study. The influence factors discovered in the qualitative data round can be perceived as more important if they are also found in a data file. This is further elaborated in Section 4. In sum, this data collection phase resulted in a list of influence factors and consequences with its underlying reasoning and association per decision, Mainly from the qualitative data round, partly from existing literature, and partly from the quantitative data round.
(4) Validation by focus group
4. Results
This section is devoted to the findings of the research. First, findings around how the case company manages NCPs are discussed. Then, the recognised options with their associated consequences are described and finally, the discovered influence factors are outlined. An attempt at answering the three research questions are found in the three subsections below, respectively.
4.1 Managing NCPs
In general, the case company defines the product specifications together with customers and terms and conditions from governments. Besides fluctuations in quality of these raw materials, failure of machines during the production process could result in the occurrence of NCPs. Examples of machine errors are underweighting in the bottle during the filling process, a wrong expiry date on the cap, or deviation in mixing ingredients in the kitchen. Third, the lack in attentiveness and education of operators is perceived as one of the major problems during the production process. Understaffing and the excess deployment of part-time operators are major concerns of the case company which affects the output quality of the products. The case company deals with staff problems by introducing a new organisation structure and putting more effort in educating operators.
The case company seeks to detect NCPs preferably during, but also after, the production process. The company applies several quality checks at the production lines to eliminate NCPs to its minimum. Several detection devices are installed at the lines to scan products which are contaminated, indented, or lack in labelling or coding. These are automatically pushed off the production line and disposed ultimately. Operators perform hourly quality checks to prevent any non-conformance during their shift. The quality department performs a general tasting session every morning, where samples from each hour of the former production day are collected and assessed to discover non-conforming issues. The quality inspectors evaluate all the samples on packaging issues and they asses the content to discover any deviation in taste, colour, or thickness. The laboratory inspects the same samples on organoleptic deviations like refraction. Moreover, packaging-related non-conformance can also be discovered at a distribution centre. These discoveries happen before the products are transported to the customers. However, NCPs are occasionally identified by customers and consumers.
be labelled with a unique QN number to enhance traceability and to keep track of what is wrong with the product and other related information. Every QN number is treated individually at the case company regarding the disposition it receives. In case a non-conformance is detected at the line, the line immediately shuts down to prevent further production of NCPs. Any non-conformance discovered after the production process is blocked to prevent further flow down the supply chain. In many cases, sorting activities are initially performed at the rework station to shrink down the blocked batch of NCPs. The rework operators are sampling the NCPs of this particular QN number in order to expose the moment where the products were conforming. The products which were initially blocked can now be released to the market, because they are conforming. The sorting process results in a smaller number of NCPs of that particular QN number. The other NCPs will keep their blocked status and the most suitable option will eventually be chosen for this QN.
4.2 Options for NCPs
The consequences per option gathered from the data collection phases are presented in this subsection. In total, by conducting 8 semi-structured interviews, investigating three data files, and by conducting a focus group session, 15 consequences are discovered. Many of the consequences are derived from the transcribed interviews, while a few are derived from the data files. Each option will be discussed individually, together with their corresponding consequences. Table 3 shows which consequence is related to which option and if the consequence is positively or negatively related to the option. For example, if they choose to dry rework a NCP, the rework costs (3) will be higher, so they are negatively (—) related. All other relations will be discussed below. Besides, the discovered consequences from literature are also incorporated into the table, indicated by (L).
The sequence of the consequences in Table 3 is determined by their importance score (ρ). Three variables are used to determine (ρ). First, (De) indicates how many decisions the consequence is associated with, expressed in proportion of all options. For example, write-off costs (2) is a consequence of three options, so a score of (3/5=0,6). Second, (In) indicates how many interviewees mentioned the consequence during the interviews, expressed in proportion of the total count of interviewees. For instance, write-off costs (2) is mentioned by five interviewees, so a score of (5/8=0,625). Finally, (Qa) indicates if the consequence can be derived from any of the three quantitative data files (binary expressed). (De) receives the highest weight (50%), since this variable is perceived to be the most important one. (In) receives the second highest weight (30%), since it is perceived to be less important than (De), but more important than (Qa). The remaining (20%) is appointed to (Qa). Thus, the formula below determines the importance of the consequence which leads to a quantified sequence proposed in Table 3 below. The table also shows if the consequence affects the company on either operational or strategic level, indicated respectively by O or S. 67% of the consequences are associated with the operation level, whereas 33% are associated with the strategic level. Therefore, we can conclude that NCPs mainly affects the organisation on operation level. Appendix G shows the values and calculations per variable.
Table 3. Overview of consequences per decision.
No. Consequence O/S
ρ
Rework (dry) Rework (wet) Disposal Donate Sell L1. Brand image S 4,8
+
+
+
±
— √2. Write-off costs O 3,2
+
+
— √3. Rework costs O 2,4 — — √
4. Customer complaints S 2 —
5. Generate small income S 1,6
+
√6. Environmental impact S 1,6 — √
7. Inventory costs O 1,5 —
+
√8. Food waste S 1,1
+
9. Fermentation income O 1,1
+
10. Material usage O 1,1
+
11. Generate income after
rework O 1
+
√12. Reproduction O 1 — √
13. Lower costs than disposal O 0,8
+
14. Chance of NC batch O 0,8 —
15. Planning constraint O 0,8 —
+ = positively related — = negatively related ± = both
Rework (dry)
to several factors, other options will be considered. The very last option is disposal, as this option incurs the highest overall costs, indicated by the case company.
Rework (wet)
Several positive and negative consequences are concerned with the option to wet rework a batch of NCPs, according to interviewees A, B, E, F, and H. First, when opting for wet reworking a batch of NCPs, a decrease in write-off appears compared to disposal. Disposal results in a 100% write-off of all the costs associated with the manufacturing of the NCPs, while wet rework solely implies a write-off of the packaging material and labour hours (2). Wet rework enables the producer to retain and reuse the content in other new batches of the same product (10). An average reduction of 60% in write-off costs is a result of performing wet rework to NCPs, according to a spreadsheet file regarding the production costs of all SKUs. This is one of the main reasons to perform wet rework over disposal. Second, reusing retained content after wet rework implies a decrease in raw material usage in the kitchen for the new batch (10). On average, around 10% of the total new batch could be complemented by wet reworked content. However, a negative consequence of this process is that the new batch could get non-conforming in its totality due to dosing deviations (14). This happens occasionally, but the chance endures. Wet rework is coherent to additional labour and machine costs (3). Another negative consequence is the constraint in planning of the sauce (15). If the amount of wet reworked content is too large to be dosed into the new batches, it will still be disposed (14). This implies wasted wet rework labour hours. Therefore, a joint planning between the wet rework activities and the kitchen would be favourable, as this could reduce the chance that the reprocessed content gets thrown away. Interviewee E quoted the following:
“In principle, you can obtain a large part of your raw material value. You throw away the packaging and labour costs but not the content. And that is positive. Because you need fewer raw materials to produce the new sauce. And the only place where you would want to see that is
in the material usage.”
Disposal
the company chooses to dispose these stocked NCPs, the inventory costs will eventually decrease. This can be seen as one of the positive consequences of this option. The NCPs are occasionally sold for fermentation (9). This means that a non-regular customer pays a discounted price for the NCPs, which they can use for their fermentation processes. On the other hand, when the NCPs are completely disposed, a 100% write-off takes place (2). Besides, the disposed NCPs should be reproduced, as the market demand still exists. This is associated with extra production time, labour hours, and material usage (12). Moreover, this decision negatively impacts the environmental footprint of the company (6). In fact, the case company throws away a lot of resources which indirectly impacts the environment and their corporate social responsibility. Hence, these consequences have led the company to consider disposal as the last option, after other options are completely excluded. They preferably choose to donate or sell the NCPs, since the negative consequences of these options do have less impact on the business. Interviewee E mentioned the following:
“Yes, if you do not produce it right at once, and it is blocked and disposed afterwards that implies extra costs. Moreover, you have to repeat the same production process again because
you have to make it.”
Donate
“Because you always run the risk that items that you donate to charity will be able to get back into the regular market somewhere else, causing complaints that you consider undesirable.
Causing you brand damage.”
Sell for lower quality
The last option implies the least consequences. All interviewees argued numerous consequences regarding this decision. The NCPs can still be sold in their circumstances, generating a small income (5). This can be seen as a positive consequence, as donating or disposal does not generate any income at all. Conversely, selling NCPs to other non-regular markets or via other selling streams could lead to an excessive increase in complaints, as these products are non-conforming (4). A short remaining shelf life, a slightly deviating colour of the content, or a skewed label are examples of complaints received from sold NCPs. This eventually leads to a risk in damaging the brand image, which is considered as an impactful negative consequence for both donating and selling for lower quality (1). The decision-makers estimate and consider the chance of receiving complaints when they choose between disposal or sell for lower quality. If the chance is estimated to be low, the products will be sold for a discounted price. If the chance is high, the NCPs will be disposed. Interviewee E quoted the following:
“The product does not necessarily have to be a bad one, but one that appears on the market with an incorrect expiry date. And you distribute it and it ends up in a far country and you immediately have a claim of thousands of euros, because you deliver a product that is not
4.3 Influence factors in decision-making
In total, by performing inductive coding and analysing multiple data files, 16 influence factors are discovered and categorized into four general categories, namely: (A) product, (B) costs, (C) capacity, and (D) customer. Category A are factors which relate to the characteristics of the (non-conforming) product. If the influence factor is led by costs, it is labelled under category B. Category C includes all influence factors which are related to (constraints in) capacity. And when the factor relates to the customer or consumer, it is labelled under category D. The 16 influence factors will be discussed individually, since each influence factor affects multiple options simultaneously. Table 4 shows if any quantitative data file supports the related factor, indicated by ∆. The sequence of the factors is based on their importance within the decision-making process. The same three variables as in Subsection 4.2 are used to determine the importance score (ρ) of each factor. Table 4 is ranked from the most important factor to the least important factor. An overview of the values and calculations for (ρ) can be found in Appendix G.
Table 4. Overview of influence factors per option.
No. Influence factor Cat.
ρ
Rework (dry) Rework (wet) Disposal Donate Sell∆
1. Degree of non-conformance A 5,2 √ √ √ √ √ √ 2. Shelf life A 3,4 √ √ √ √ √ 3. Batch size of NCPs B 3,2 √ √ √ √ 4. Packaging material A 3 √ √ √ 5. Product composition A 2,7 √ √ √ 6. Location of NCPs B 2,4 √ √ √ 7. Production schedule C 2,4 √ √ √ 8. Rework capacity C 2,4 √ √ √
9. Risk of brand damage D 2,4 √ √ √
10. Consumer experience A/D 2,1 √ √ √
11. Effect on KPI B 1,9 √ √
12. Market demand D 1,8 √ √ √
13. Shipping window C 1,8 √ √ √
14. Material inventory level B/C 1,3 √ √
15. Charity demand D 1,1 √
Table 4 above shows that two factors are labelled are assigned to two categories, since they are associated with both categories. The 16 influence factors are almost equally divided across the four general categories. Some categories are perceived to be more important than others. To determine this, all importance scores (ρ) per category are summed up to show the total importance score, expressed by (ρtot). This resulted in a ranked list of categories, presented in Table 5 below. Thus, according to the methodology used to calculate the importance score of each influence factor, we can acknowledge that the characteristics of the (non-conforming) product (A) itself plays a key role in the decision-making process. Followed by costs (B), capacity (C) and customer (D). Further discussion around this subject is held in Section 5.
Table 5. Total importance score per category.
Cat. Description Count
ρ
scores of influence factorsρ
totA. Product 5 (5,2 + 3,4 + 3 + 2,7 + 2,1) 16,4
B. Costs 5 (3,2 + 2,4 +1,9 + 0,8 + 1,3) 9,6
C. Capacity 4 (2,4 + 2,4 + 1,8 + 1,3) 7,9
D. Customer 4 (2,4 + 1,8 + 1,1 + 2,1) 7,4
1. Degree of non-conformance (A)
taste, or deviates in proportions of ingredients are wet reworkable. The spreadsheet file which provides data into every blocked NCP also shows the degree of non-conformance in terms of what is wrong with the product (see Appendix E for an example). Interviewee H quoted the following:
"In principle, you do not look at anything, because you start to look at the degree, if the seriousness is such that you cannot wet rework it or that you cannot dry rework it, or in what kind of way that we can bring the products back in the chain, then you have to decide that you must dispose them or
even sell or donate.
2. Shelf life (A)
The remaining shelf life of the NCP is perceived to play an emphatic role in the decision-making process. As being argued by interviewees A, E, F, and G, the shelf life affects the following decisions: dry rework, wet rework, disposal, and sell for lower quality. The case company opts for wet rework if the remaining shelf life drops below a certain threshold that it cannot be sold to the regular market, but the degree of non-conformance is acceptable (e.g. no odd particles are found in the content). Products which are too thin and have a very short remaining shelf life could not be sold to the market, but still be wet reworked. On the other hand, the company disposes the NCPs in case the conditions for wet rework are not met. If the shelf life of these NCPs is too short to go for regular sale and some odd particles are found in the sauce, disposal is the only suitable option left. Occasionally, the NCPs will be sold for lower quality to a third party. Selling occurs if the remaining shelf life of these NCPs is too short to sell to the regular market and restrictions regarding the capacity of dry or wet rework appear. These types of NCPs can therefore not be dry reworked nor sold to the market. The spreadsheet file which provides data into every blocked NCP also indicates the remaining shelf life per QN number. When the shelf life falls between 80 and 75%, the QN number pops up visually, which triggers the decision-maker to act resolutely and decide its purpose with high priority. Thus, the shelf life of the NCPs affects each decision in a different way, which leads to the fact that this factor cannot be ignored and should be treated carefully by the decision-makers. Interviewee G quoted the following:
“The market does not want to have it anymore under a certain percentage. If the shelf life falls below 75% then they no longer need it because the chance that it will remain on shelves and unsold is so great
3. Batch size of NCPs (B)
The batch size of NCPs influences the decision whether to dry rework, dispose, or sell for lower quality. Interviewees A, B, C, E, and G argued that once the size of the QN number is relatively large, the case company preferably considers dry rework, as the negative impacts of disposal and selling are excessively larger. Examples of such impacts are the write-off costs and missing sales when choosing for disposal. On the other hand, if the size of the non-conforming batch is relatively small, the decision to dispose or sell for lower quality are preferably being chosen. Selling for lower quality to a third party is significantly influenced by the batch size, as the amount of customer complaints correlates with the batch size. When the case company decides to sell a batch of NCPs, the size of the batch is usually relatively small. The spreadsheet file which provides data into every blocked NCP also shows the size of the blocked batch in terms of number of pallets and cases. The fact that they keep track of the batch size of the NCPs in their data files emphasizes the importance of this influence factor. Interviewee B quoted the following:
“The size of the batch of NCPs plays a role as well. If the batch size is small, we expect less complaints on non-conforming issues than if the batch size was larger. That plays a crucial role in the decision.”
4. Packaging material (A)
The packaging material of the NCP influences the decision whether it can be wet reworked or it should be disposed, argued by interviewees B, D, E, F, G, and H. The case company solely performs wet rework on NCPs which are contained in plastic bottles. NCPs which are contained in glass bottles are not wet reworkable, as it is very hard to empty the content of glass bottles during the wet rework process. Moreover, the risk occurs that pieces of glass end up in the retained content. Glass bottles could break during the wet rework process, as glass is relatively fragile. The NCPs which are contained in glass bottles could either be donated or disposed eventually, dependent on other influence factors. Interviewee B quoted the following:
“We will not perform any wet rework to glass products, because the chance of break with emptying is many times higher than with plastic. That really has to do with packaging. And the risks that are
associated with it.”
5. Product composition (A)
dispose, or donate the NCPs. To illustrate, the smooth sauce like ketchup and a product with solid pieces of garniture like sandwich spread are very different in their composition. Ketchup can flow far more easily through pipelines than sandwich spread. During the wet rework process, water is added to the retained content to enhance the flow through the pipelines back towards the kitchen. If water is added to products like the sandwich spread, it can never reach the quality it is expected to have. Therefore, products like sandwich spread could not be wet reworked due to their composition. These products could be donated eventually. In case the degree of non-conformance is to severe, it will be disposed. Interviewee E quoted the following:
“You cannot wet rework products like sandwich spread, due to the composition of the product. We do not want to reprocess those. When you retain it from the bottle with moisture and everything, the consequence is that the composition will no longer be so usable that it never gets its conforming quality.”
6. Location of NCPs (B)
The influence factor location of NCPs affects the decision whether to dry rework or dispose. Interviewees C, D, E, and G argued that the location of the NCPs determines the costs of transporting the NCPs back to the rework station or dispose them at their current location. Consider a large batch of products located in a different country than the rework station. Samples were taken at the tasting session and the QT considered these products as being non-conforming. These products could therefore not be sold yet. If the case company decides to dry rework these products, they have to ship them back to the originated country so they can perform dry rework. However, high transport costs are associated with this decision. Hence, a consideration is made whether it is cheaper to return the NCPs back to the rework station or dispose the products at its current location. The spreadsheet file which provides data into every blocked NCP also shows the location of the blocked NCPs to keep track of where they are located. Interviewee E quoted the following:
“Yes, then it has to come back again, or they decide to destroy them in the UK. Look if there is really an issue that they say okay we cannot do anything with this and it is more expensive to bring them back to
the factory in The Netherlands via return freight, then they will destroy them in the UK.”
7. Production schedule (C)
from a two dimensional perspective. The first one effects wet rework and disposal. The case company adheres to a yearly production schedule. Some sauces like ketchup are produced on a daily basis, whereas light salad cream is produced once a month. The wet rework activities will not be affected when the product is produced frequently. It does not matter when you perform wet rework to these frequently produced sauces, since they can directly be reused in new batches. Performing wet rework to NCPs which are occasionally being produced is a different case. The consideration has to be made whether it is reasonable to rework such NCPs, as the chance is little that all the retained sauce will be reused in the new batch. This influences the decision whether it will be wet reworked or disposed ultimately. Interviewee E quoted the following:
“But it also has to do with the moment of when we produce the product. We always produce ketchup on a continuous basis, while we produce HP sauce far less. Then you have to look at the
amount of HP sauce that we are reprocessing, can we also process it in those new batches?”
The second dimension of this influence factor affects dry rework. The production schedule of the plant is highly utilized to reach the highest output as possible. Due to this high utilization, there is little room left on the production lines to perform in-line rework to NCPs. Even though there would be some line-time available to dry rework the NCPs, the operators do preferably not want to perform such activities. Above indicates why such in-line dry rework is rarely performed. Interviewee C quoted the following:
“But in practice, we have learned that when we advise to perform in-line rework, it becomes difficult. We have people walking around who really do not want to put those bottles back on the line
etcetera. That is all a lot of work.”
8. Rework capacity (C)
possibility to dry or wet rework. In case the products are kept on stock for too long due to lack of rework capacity, they will ultimately be disposed due to its insufficient remaining shelf life. Interviewee D mentioned the following:
"If we do not have enough capacity at the moment due to the load of current work, sometimes we say: okay let's not rework them but dispose them because we know that these products could not be
reworked on time."
9. Risk of brand damage (D)
The risk of damaging the brand of the producing firm is an influence factor in the consideration between disposal, donate, or sell for lower quality. Interviewees A, B, and H discussed this. The decision-makers evaluate the NCPs on the chance if it could damage the brand in a certain way. In case the QT estimates that the risks are too high, they will eventually choose to dispose the NCPs. Risky products are products which deviate extremely from the standard quality specifications. If the risks are perceived to be acceptable, they choose to donate or sell the NCPs. Interviewee H mentioned the following:
“Because you always got the risk that items that you donate to the food bank or elsewhere will be able to get back into the regular market somewhere else, causing complaints that you do not consider desirable.
Causing a damage to our brand.”
10. Consumer experience (A/D)
Influence factor consumer experience plays a role in the decision whether to dry rework, dispose, or donate the NCPs. As being indicated by interviewees A and H, the decision-makers consider the way how consumers experience and use the product. For example, the contact and interaction of the consumer with spaghetti sauce differs from the consumer experience of sandwich spread. A non-conformance can be noticed more easily at sandwich spread than spaghetti sauce. The consumer is more intensively in contact with the sandwich spread than with the spaghetti sauce. Hence, for NCPs like spaghetti sauce, they rather donate or even release them to the normal market. On the other hand, options like dry rework and disposal are preferably considered for products like sandwich spread, as the risk of receiving complaints is higher for this type of product. Interviewee B quoted the following:
observe. You have more experience with spread than spaghetti sauce. So those margins are much more difficult. Apart from the specifications, we have said we are taking the risk to release him."
11. Effect on KPI (B)
Data analysis indicated that the effect on a key performance indicator (KPI) played a role in the consideration between the options dry rework and disposal. As being argued by interviewees A, E, and H, the case company’s performance is assessed by several KPIs throughout the year. One of these KPI’s keeps track of the number of NCPs produced relative to the production target. NCPs are seen as production losses which is considered as one of the major KPI’s of the case company. The KPI production losses can be influenced by the company. If the case company opts for the decision to dry rework the NCPs over disposal, the total production losses will decrease. Consider a daily production target of 1 million bottles. Due to a failure at the sticker printing machine, ± 10.000 bottles are blocked. These NCPs are allocated to the dry rework station where each case is reworked with a conforming sticker. In this case, the company choses to dry rework these products, so there will be no production losses. Conversely, a production loss of ± 10.000 bottles occurred if the company choses to dispose these products. The KPI production losses would be negatively affected in that case. Interviewee E quoted the following on this subject:
"There is a KPI which allows us to only have a certain amount of blocked products on stock. So, decisions have to be taken fast. And that is only possible at the quality department. Guys, what are we
doing with this, can we not do something with it? Then destroy it. Period."
12. Market demand (D)
“Yes, or the market demand is very high. That the product is out of stock for example. Then they want the product as soon as possible. Then we receive an urgency order for NCPs at the dry rework station
and then we will carry it out as fast as we can so it can still be distributed fairly quickly to the market.”
13. Shipping window (C)
The shipping window of the NCPs is another discovered influence factor in the decision-making process, argued by interviewee E. Dry rework, disposal, and selling for lower quality are affected by this factor. Shipping window is a term which refers to the time period between the shipment of the product and the arrival at the destination. This factor is coherent with shelf life, as the shipping window affects the shelf life undesirably. For some countries, the shipping window could be very long, resulting in a firm decrease in shelf life. For instance, some markets like Japan expect a relatively long remaining shelf life after the products are delivered at the destination. This could affect the decision whether to dry rework or dispose. In some cases, a lack in remaining shelf life and the long shipping window results in the decision to not dry rework the NCPs, as the possibility to sell these products drops to its minimum. In that case, the products could still be sold to certain discount stores which sells products at lower prices with shorter remaining shelf life. Disposing the NCPs remains as the last option if above options are neglected. Interviewee G quoted the following:
"Often you have an order that ... whose shelf life has almost been expired, and often we have to cope with long transport times to foreign countries. In that meantime, the remaining shelf life also
decreases or even ends which effects the possibility to sell."
14. Material inventory level (B/C)
"So, in fact, if we do not have any dry rework material on stock to be able to perform rework activities, then the pallets could be disposed if it takes too long to get those materials on stock in time."
15. Charity demand (D)
This influence factor involves the demand of the charity organisation which receives the donated products and influences the decision whether to dispose or donate, argued by interviewees B and C. The charity organisation does not demand all the products the case company offers. In fact, the charity organisation only prefers a few products. The preference is related to the customers of the charity organisation. These customers do prefer certain products. Hence, a selection of products could be donated to this charity organisation. Moreover, the inventory capacity of the charity organisation influences their demand for donated products. If the charity organisation’s demand is fulfilled, they do not prefer any more products for a specific time. It therefore influences the decision whether to donate or dispose these NCPs. Interviewee C quoted the following:
“We can donate a lot, but the charity organisation does not wish all products we offer. That sounds very contradicting, but they are very picky.”
16. Process characteristics (B)
A factor with the lowest influence is the process characteristic of the production system of the company. Interviewee B discussed the production process and how NCPs arise during this process. The case company designed their process in a way that they choose not to clean-in-place the production line from one recipe to another. But they let the new recipe flow through the system so a mixture of the old and new sauce emerges. The decision to consciously produce NCPs is based on costs considerations, as cleaning-in-place would be more expensive than mixing the old and new sauces. Next, the tasting team takes samples of each pallet layer to see where the transition from mixed sauce to new sauce is. When the point of transition is found, the ‘mixed’ products are non-conforming and disposed ultimately. Other options are not considered for this type of NCPs. Interviewee B quoted the following:
“But we mix the old recipe with the new to so you get mixed sauces. The tasting is then taken at each layer and a sample is taken to see where the transition is. Then we take that safe point. From that
5. Discussion
The purpose of this section is to interpret and describe the significance of the findings. First, the results are interpreted whether they were expected or not and what new insights are established. Second, the initiated findings are compared to current studies to support the claims that are made or shed them in a different light. Finally, a decision-making model is presented that helps improve the present decision-making situation.
5.1 Interpretation of results
Some results were obvious, while some were not. As in fact, most of the consequences were already mentioned in literature. The findings of this research around the consequences therefore mainly serve as a confirmation. This will be further discussed in Subsection 5.2. The discovered influence factors were not discussed in current literature and could therefore be seen as a contribution to literature. Some of these influence factors seemed obvious, while some were not. For instance, the factor process characteristics (16) is quite notable, as this factor indicates that the case company deliberately choses to produce NCPs due to costs considerations. The case company choses to design their process in such a way that some NCPs cannot be avoided. Thus, the costs factor plays a major role in this decision. A few other factors are also led by costs considerations. For example, take the influence factors batch size of NCPs (3) or location of NCPs (6). If the batch size is relatively large, the write-off value will be higher, and therefore the company preferably choses to dry rework the batch of NCPs instead of disposal. Regarding the location of the NCPs, if the NCPs are located somewhere in a foreign country, the costs of transporting it back to the country of origin would be very high, and they therefore decide to dispose the batch of NCPs. However, the costs factor is sometimes completely neglected. Take the market demand (12). If it is cheaper to dispose the NCPs over dry reworking them, but the market demand is high, the case company decides to dry rework the NCPs. Serving the customer well is perceived to be more important than the costs of the decision. Therefore, we can acknowledge that the decision-making process is rather complex, where there is not just one proper way to run through the decision-making process. This brings some implications for the decision-making model, explained and outlined in Subsection 5.3.
appointed to. Take the influence factors degree of non-conformance (1) and shelf life (2). Both factors received a high importance score and both relate to the condition of the associated NCPs (category A). This also applies to the factors packaging material (4) and product composition (5). We can acknowledge that the actual state and characteristics of the NCP mainly determines which option it gets, according to the method used to determine the importance score per influence factor. The other two categories capacity (C) and customer (D) are considered less important than category A and B (see Table 5). Although the product factor (A) is predominant, the decision-makers cannot change the impact of this factor. The same holds for the customer (D) factor. It is hard to affect the influence factors associated with both categories and should therefore be taken for granted. For example, the shelf life (2) cannot be changed by the decision-makers. The other two categories, costs (B) and capacity (C), can be affected easier. By focusing on managing the influence factors within category B, a reduction of total costs associated with the decision-making process can be directly achieved. Focusing on the other categories would indirectly lead to a decrease in total costs, as considerations would then be made more substantiated.
5.2 Comparison with literature
The following consequences associated with rework are neglected by literature: write-off costs (2), generate income after rework (11), chance of NC batch (14), and planning constraint (15). Although these consequences are either associated with dry or wet rework, they can be grouped under the umbrella option rework. The negative consequence rework costs (3) is acknowledged by Sonntag & Kiesmüller (2018). Additionally, Goerler & Voß (2016) argued that reworking NCPs boosts the environmental-friendly image of the company. This positive consequence from literature is expressed by the positive consequence brand image (1) and negative consequence environmental impact (6). Although these consequences were discovered during the data analysis phase, they are not explicitly mentioned by the interviewees to be related to rework.
