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RSC Topic: Nonconformance Management and MRB

  • Use-As-Is Disposition

    Use-As-Is Disposition commonly refers to a formal decision to accept a nonconforming material, component, or product for its intended use without rework, repair, or scrap. It means the item is released in its current condition after review determines that the observed nonconformance does not prevent acceptable use within the applicable requirements or approved decision process.

    In manufacturing and quality workflows, this disposition appears as one possible outcome of nonconformance review. It is typically recorded in an NCR, deviation, concession, or MRB-related process, along with the reason for acceptance, scope, affected items or lots, and required approvals. The term refers to the decision status itself, not to the investigation or corrective action process that may exist alongside it.

    What it includes and excludes

    • Includes: acceptance of an item in its current state for defined use, with documented review and disposition.
    • Excludes: changing the item to meet requirements. If work is performed to bring the item into conformance, that is rework or repair, not use-as-is.
    • Excludes: automatic acceptance of defects. A use-as-is decision is typically exception-based and documented.

    Common confusion

    Use-as-is vs rework: Rework changes the item so it fully meets the original requirement. Use-as-is accepts the item without making that change.

    Use-as-is vs repair: Repair changes the item so it becomes acceptable for use, but not necessarily fully conforming to the original specification. Use-as-is involves no physical correction.

    Use-as-is vs scrap: Scrap removes the item from intended use. Use-as-is keeps it in use.

    Use-as-is vs deviation or concession: A deviation or concession is commonly the authorization mechanism or record; use-as-is is the disposition outcome.

    How it shows up in systems

    In MES, QMS, ERP, or integrated NCR workflows, use-as-is may be stored as a disposition code tied to the affected serial number, lot, batch, work order, or material record. Related data can include review notes, approval history, attachments, traceability links, and any downstream restrictions or customer communication requirements.

  • Nonconforming Material (NCM)

    Nonconforming Material (NCM) commonly refers to raw material, components, subassemblies, or finished goods that do not meet one or more specified requirements. Those requirements may come from drawings, specifications, purchase requirements, process criteria, inspection results, labeling rules, or approved manufacturing instructions.

    NCM is a status or condition of material, not a root cause and not a disposition by itself. Once identified, the material is typically controlled so it is not used, shipped, or mixed with acceptable stock until an authorized review determines what happens next.

    What it includes

    • Incoming material that fails receiving inspection
    • Work-in-process that does not meet dimensional, visual, functional, or documentation requirements
    • Finished product found out of specification before release or after internal review
    • Material with incorrect identification, lot traceability, revision status, or labeling when those are required attributes

    What it does not mean

    NCM does not automatically mean scrap. Nonconforming material may be reworked, repaired where allowed, used under an approved deviation or concession where applicable, returned to supplier, or scrapped, depending on the defined review and disposition process. It also does not mean every production issue is a material issue. Equipment faults, documentation errors, and process deviations may create nonconforming output, but they are not themselves material.

    How it appears in operations and systems

    In manufacturing workflows, NCM is often identified during receiving, in-process inspection, final inspection, testing, or stockroom review. In MES, ERP, or QMS environments, it is commonly linked to a hold status, quarantine location, nonconformance record, lot or serial traceability, and a disposition workflow. The objective of those controls is to maintain visibility and prevent unintended use while the issue is being evaluated.

    Example: a batch of machined parts that fails a diameter tolerance check would be treated as nonconforming material until the parts are reviewed and dispositioned.

    Common confusion

    Nonconforming Material (NCM) is often confused with nonconformance or NCR. NCM refers to the affected material itself. A nonconformance is the condition or event in which a requirement is not met. An NCR, if used by the organization, is the record used to document and manage that condition.

    It may also be confused with scrap. Scrap is only one possible final disposition for NCM, not a synonym for it.

  • Concession Volume

    Concession volume commonly refers to the quantity of material, parts, assemblies, or finished units covered by an approved concession. In manufacturing and quality contexts, a concession is a documented acceptance of a specified nonconformance under defined conditions, and the concession volume sets the numerical scope of that acceptance.

    This term helps define boundaries. It indicates how many affected items may be shipped, used, processed, or accepted under the concession. It does not, by itself, describe the technical deviation, the reason for acceptance, or the disposition decision criteria. Those details are usually recorded elsewhere in the concession or related quality records.

    How it is used in operations

    In practice, concession volume may appear as a count of pieces, batches, serial-numbered units, lots, or another controlled quantity measure. The exact unit depends on how the product is identified and controlled in the organization.

    • For discrete manufacturing, it may be the number of parts or assemblies covered.

    • For lot-controlled material, it may be a lot, batch, or a defined subset of that lot.

    • For serialized products, it may refer to specific serial numbers rather than a general count.

    Systems such as QMS, MES, or ERP may reference concession volume when tracking nonconforming product, release decisions, genealogy, and downstream use restrictions.

    What it includes and excludes

    Concession volume includes only the quantity explicitly authorized by the approved concession. It does not automatically extend to future production, similar parts, or additional nonconforming units unless those are also documented and approved.

    It also should not be confused with broader production volume, shipment volume, rework volume, or scrap volume. The term is limited to the quantity within the approved scope of concession treatment.

    Common confusion

    Concession volume is often confused with concession rate or concession frequency. Concession volume is the amount of product covered by a specific concession, while concession rate refers to how often concessions occur or what share of output they represent.

    It can also be confused with deviation quantity. In some organizations the terms are used similarly, but a deviation often refers to permission before manufacture or processing, while a concession commonly refers to acceptance of a known nonconformance after it exists. Usage varies by company and industry.

    Example

    If 25 parts in a lot have a minor documented nonconformance and quality approval allows those 25 specific parts to be accepted for use, the concession volume is 25 parts, not the full lot unless the full lot is explicitly included.

  • Rework Routing

    Rework routing is the defined sequence of operations, checks, and approvals used to correct a nonconforming part, assembly, or batch and determine whether it can return to the normal production flow. In manufacturing systems, it describes where the item goes, what work is performed, what evidence is recorded, and who must review or approve the disposition.

    Rework routing is commonly managed in an MES, digital traveler, quality management workflow, or ERP-connected production system. It may include added work instructions, inspection steps, material review board decisions, quality holds, re-test requirements, and traceability records linking the rework activity to the original work order or serial number.

    The term should not be confused with normal production routing, which defines the planned manufacturing path for conforming work. It also differs from shipping or network routing. Rework routing is specifically tied to correcting or evaluating work that has deviated from the expected process or specification.

  • How does nonconforming material impact manufacturing capacity and delivery schedules?

    Nonconforming material almost always reduces effective capacity and increases schedule risk, even if headline utilization numbers look unchanged. It does this by consuming constrained resources, disrupting flow, and increasing variability in already tight, regulated environments.

    Direct impact on capacity

    Nonconforming material affects how much compliant product you can produce with the same assets and headcount:

    • Rework consumes prime capacity: Operators, machines, test stations, and fixtures are used to rework or re-test instead of producing first-pass good units. On constrained equipment (e.g., special processes, ovens, test stands), rework quickly reduces available capacity for planned orders.
    • Scrap drives replacement orders: Scrapped units must often be remade to meet customer or program demand. This adds unplanned load on machining, assembly, and inspection, effectively lowering your true throughput for the period.
    • Inspection & MRB time become bottlenecks: In regulated environments, quality engineers, inspectors, and MRB boards must formally disposition nonconformances. When NCM volume is high, these roles become hidden bottlenecks, delaying release of conforming material and tying up WIP.
    • Changeovers and setups increase: Extra replacement lots and rework runs cause more starts/stops and product changes. Each additional setup consumes time and introduces further opportunity for error.
    • Downstream rework cascades upstream: If nonconformance is detected late (e.g., final test or customer inspection), the recovery plan often pulls upstream resources off planned work to investigate, sort, and rebuild, reducing capacity across multiple operations.

    Impact on delivery schedules

    Nonconforming material rarely aligns with the production plan. The result is schedule disruption:

    • Missed committed dates: When nonconformance is found after materials are allocated and capacity is booked, replacement work competes with existing orders. Unless there is slack, something shifts to the right.
    • Longer and less predictable lead times: Every additional inspection, MRB review, rework loop, and retest adds time and variability. Even if average lead time is manageable, the spread between best-case and worst-case grows, complicating customer commitments.
    • Expediting and resequencing: To recover from NCM, planners and supervisors often resequence jobs, pull in some orders, and push out others. This local optimization may save a key shipment but tends to degrade overall schedule adherence.
    • Knock-on effects across shared resources: In shared facilities, nonconformance in one program can consume capacity required by other programs, causing secondary delays and internal priority conflicts.

    Hidden operational and planning effects

    Beyond obvious rework and scrap, nonconforming material introduces less visible but significant impacts:

    • Inflated WIP and inventory: Holds and quarantines increase apparent WIP and finished goods. A portion of that inventory is not truly shippable, but standard MRP/MES views may not distinguish it cleanly without good status handling.
    • Planning accuracy degrades: If nonconformance rates and disposition times are not accurately modeled in planning and MRP parameters, capacity plans and delivery promises become over-optimistic. Schedulers assume capacity that is actually being lost to rework and investigation.
    • More variability in flow: NCM spikes create irregular work patterns (sort activities, extra inspections, rework campaigns). This destabilizes takt, increases queues, and makes performance metrics (OEE, NPT, on-time delivery) more volatile.
    • Increased administrative load: Engineering, quality, and operations leaders spend more time on investigations, risk assessments, and customer communications instead of improvement work, further limiting the system’s real capacity to improve.

    Regulated and brownfield system considerations

    In regulated environments, the same nonconformance often consumes more time and capacity than it would in an unregulated plant, because of:

    • Formal MRB and documentation: Each nonconformance may require structured MRB, documented risk assessment, customer notification, and traceable approval. This adds queue time and manual work in QMS, MES, and ERP.
    • System disconnects: In brownfield stacks, nonconformance data is often split across legacy MES, ERP, QMS, PLM, and spreadsheets. Poor integration slows visibility of what is truly available to ship, which lots are blocked, and where capacity is tied up.
    • Validation and change control: Improvements to NCM workflows (e.g., automating holds, routing, or dashboards) can be slow to deploy due to validation and change control requirements. Plants must often live with inefficient processes longer than they would like.
    • Long equipment lifecycles: Older qualified equipment may be less capable of real-time detection or automated containment. That pushes detection later in the process, amplifying schedule and capacity impact per defect.

    How nonconforming material shows up in capacity metrics

    When monitored well, the impact of NCM can be seen in common performance metrics:

    • OEE and NPT: Rework and inspection queues reduce effective performance and increase non-productive time (NPT), even if availability appears high.
    • COPQ: Internal failure costs (rework, scrap, extra inspection, MRB effort) rise, but these costs often correlate with schedule slippage and firefighting that are not fully quantified.
    • Schedule adherence and on-time delivery: Plants with chronic NCM issues typically show good short-term recovery for priority orders, but poor overall adherence because other orders are delayed to absorb the impact.

    Practical ways to limit capacity and schedule impact

    Reducing NCM rates is the long-term lever, but in many plants you must also actively contain the operational impact:

    • Separate and visualize constrained capacity: Make rework and MRB consumption of key resources visible (e.g., hours per week per cell or test stand), so planners and leaders can see true available capacity.
    • Prioritize early detection: Shift inspection and error-proofing as far upstream as feasible, within validation and cost constraints, to avoid discovering nonconformance after major value-add steps.
    • Standardize NCM workflows: Use consistent, validated workflows across MES/QMS/ERP for holds, disposition, and release, so nonconforming material does not “leak” into schedulable or shippable inventory.
    • Feed NCM data into planning: Incorporate realistic scrap and rework factors, MRB cycle times, and yield assumptions into MRP and capacity models. This does not eliminate the impact but makes delivery commitments more credible.
    • Protect critical schedules explicitly: Identify priority programs or customers and establish clear rules for how much rework load can preempt planned capacity without jeopardizing key milestones.

    Overall, nonconforming material reduces effective capacity, destabilizes schedules, and increases the effort required to maintain commitments, especially in mixed, legacy system environments where traceability and workflow automation are uneven. Managing its impact requires both quality improvement and deliberate integration with planning and scheduling processes.

  • Nonconformance Code

    A nonconformance code is a standardized identifier used to classify a nonconformance in a quality or manufacturing system. It commonly appears as a short alphanumeric value, picklist option, or controlled label in records such as NCRs, inspection results, supplier issues, scrap reports, or CAPA-related workflows.

    The code does not describe the entire event by itself. It is a structured way to categorize the issue so that people and systems can sort, trend, route, report, and analyze nonconformances consistently across products, work centers, suppliers, or sites.

    What it typically includes

    • The type of nonconformance, such as dimensional, documentation, material, process, or labeling issue

    • Sometimes the source or point of detection, such as incoming inspection, in-process inspection, final inspection, or customer return

    • Sometimes disposition or workflow classification, depending on how the quality system is configured

    In digital quality systems, a nonconformance code may drive reporting logic, approvals, escalation paths, or links to downstream activities such as MRB review, rework, scrap tracking, supplier follow-up, or corrective action.

    What it is not

    A nonconformance code is not the same as the full nonconformance record. The full record usually includes details such as part or batch affected, requirement not met, quantity, evidence, containment, disposition, and approvals. The code is only one controlled data element within that record.

    It is also not necessarily a root cause code. Some organizations use separate coding structures for defect type, cause, containment, and disposition to avoid mixing problem description with cause analysis.

    Common confusion

    Nonconformance code is often confused with defect code, rejection code, disposition code, or root cause code. These may overlap in some systems, but they are not always interchangeable:

    • A defect or rejection code usually identifies what was found wrong

    • A disposition code usually identifies what will be done with the affected item, such as rework or scrap

    • A root cause code usually identifies why the issue happened after investigation

    Organizations sometimes use one code set for several of these purposes, but the distinction matters for reporting accuracy and trend analysis.

    Manufacturing context

    In manufacturing and regulated environments, nonconformance codes support more consistent data capture across MES, QMS, ERP, and supplier quality workflows. For example, a receiving inspector might select a code for a material certification mismatch, while an in-process operator or quality technician might select a code for an out-of-tolerance feature. When codes are standardized, quality teams can compare patterns across jobs, lines, products, and suppliers more reliably.

  • design authority

    A design authority is the organization or formally appointed role that has legal, technical, and procedural responsibility for a product’s design. It controls the approved design definition, decides what constitutes a conforming or nonconforming condition, and authorizes any changes or deviations from the baseline design.

    Scope and responsibilities

    In industrial and regulated manufacturing environments, the design authority commonly:

    • Owns the baseline design, including drawings, models, specifications, and bills of material
    • Defines acceptance criteria and tolerances that production and quality must apply
    • Reviews and approves design changes through formal change control processes
    • Assesses nonconformances and determines whether rework, repair, or use-as-is is acceptable
    • Issues and approves deviations, waivers, and concessions to allow controlled departure from the design
    • Maintains configuration control and traceability of design revisions

    The design authority may be an internal engineering organization, a specific engineering role, or an external customer or type certificate holder, depending on contracts and regulatory frameworks.

    Operational meaning in manufacturing systems

    Within MES, PLM, ERP, and quality systems, the design authority is the reference owner of:

    • Released design data linked to routings, work instructions, and inspection plans
    • Approval steps for engineering change notices and configuration updates
    • Dispositions for nonconforming material that require design approval, such as repairs or concessions

    Workflow configurations often model the design authority as an approver or sign-off step for changes affecting form, fit, function, safety, or regulatory compliance.

    Use in aerospace and other regulated sectors

    In aerospace and similar highly regulated industries, the design authority commonly:

    • Holds design approval from the aviation or relevant regulatory body
    • Determines whether proposed repairs or rework restore full conformity to the approved design
    • Approves concessions or deviations when a part does not fully meet the design but may still be accepted under controlled conditions

    Production, maintenance, and quality functions typically cannot independently change or override design requirements without documented approval from the design authority.

    Common confusion

    The term “design authority” is sometimes confused with:

    • Manufacturing authority: responsible for how the product is built, not for the design definition itself.
    • Regulatory authority: the external agency that grants approvals; it may recognize a design authority but is not the same entity.

    In many organizations, the design authority collaborates with manufacturing and quality but retains final say on what the official design is and which deviations are technically acceptable.

    Link to the source context

    In the context of scrap, rework, repair, and concession, the design authority is the body that decides whether a nonconformance can be corrected to meet the original design, repaired under an approved method, or accepted via a concession or deviation, and ensures that these decisions are documented and traceable.