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Research Outline

Prepared for Rhea G. | Delivered February 14, 2020

Internal Failure Rates: Gaming Equipment Manufacturing Industry

Goals

To find out the internal failure rates in the gaming equipment manufacturing industry, both in the US and globally, with a focus on the average percentage of rejected parts and scrap caused by internal material handling due to poor processes and lack of standard operating procedures.

Early Findings

  • The concept of Six Sigma was introduced to manufacturing processes to improve the quality of outputs. If a manufacturing process follows Six Sigma standards, the number of defects or errors would be reduced to 3.4 defects per million of output.
  • If we look at the entire spectrum of Sigma performance benchmarks, 1 Sigma level implies 30.85 percent yield in manufacturing, 2 Sigma level implies 69.146 percent, 3 Sigma level implies 93.319 percent, 4 Sigma level implies 99.379 percent, 5 Sigma level implies 99.9767 percent and 6 Sigma level implies 99.9997 percent yield.
  • Here percentage of yield denotes the percentage of outputs produced or delivered correctly.
  • In terms of Six Sigma’s spread within the manufacturing industry of the US, 53 percent of Fortune 500 companies and 82 percent of Fortune 100 companies have already implemented it.
  • According to the ‘Manufacturing Insights Report’ published by toolingu.com, 16 percent of manufacturers report scrap and rework rates of 4 percent of sales or higher.
  •  20 percent of manufacturers report scrap and rework rates between 2.1 percent and 4 percent of sales, 38 percent of manufacturers report scrap and rework rates between 1 and 2 percent of sales, and 25 percent of manufacturers achieve the standard of scrap and rework rates going less than 1% of sales.
  • When it comes to finished products’ first-pass yield, only 45 percent of manufacturers report more than 96 percent of their products passing final inspection.
  •  31 percent of manufacturers report 91-95 percent of their products passing final inspection, 17 percent of manufacturers report 80-90 percent of their products passing final inspection and 7 percent of manufacturers report less than 80 percent of their products passing final inspection.
  • In the gaming console industry, 10.0% of PlayStation 3 owners, and 23.7% for Xbox 360 owners reported a system failure within 2 years of ownership.
  • The most common types of problems seen with the PS3 and Xbox 360 were disc-read errors and output issues, while Xbox 360s owners also complained of the RROD problem as a major issue.

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