# Controlled Shipping Containment Cost Calculator

> Source: https://netray.co/tools/controlled-shipping-containment-cost-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Price a containment action before you commit: inspectors needed, total labor, defects caught and the cost per defect found.

## Category

quality

## Industry

Automotive

## Audience

- Supplier quality engineer
- Quality manager
- Plant manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Parts shipped per day

**Key:** qty

**Type:** number

**Default:** 1500

**Min:** 0

**Step:** 50

**Unit:** parts

#### Inspection time per part

**Key:** sec

**Type:** number

**Default:** 12

**Min:** 0

**Step:** 1

**Unit:** sec

#### Productive inspection hours per inspector per day

**Key:** shift_h

**Type:** number

**Default:** 6.5

**Min:** 1

**Max:** 12

**Step:** 0.25

**Unit:** hours

**Help:** Net of breaks, handling and paperwork.

#### Loaded labor rate

**Key:** rate

**Type:** number

**Default:** 28

**Min:** 0

**Step:** 1

**Unit:** $/hr

#### Containment duration

**Key:** days

**Type:** slider

**Default:** 30

**Min:** 5

**Max:** 120

**Step:** 5

**Unit:** days

#### Defect rate before containment

**Key:** ppm

**Type:** number

**Default:** 2500

**Min:** 0

**Step:** 100

**Unit:** PPM

#### Inspection effectiveness

**Key:** eff

**Type:** slider

**Default:** 85

**Min:** 50

**Max:** 100

**Step:** 1

**Unit:** %

**Help:** Share of defective parts a human inspector will actually catch. Visual inspection is rarely above 90 percent.

**Outputs:**

#### Inspection hours per day

**Key:** hours_day

**Expr:** qty * sec / 3600

**Format:** decimal

#### Inspectors required

**Key:** inspectors

**Expr:** ceil(hours_day / shift_h)

**Format:** integer

**Primary:** true

#### Total containment labor cost

**Key:** labor

**Expr:** hours_day * rate * days

**Format:** currency

**Primary:** true

#### Defective parts caught

**Key:** found

**Expr:** qty * days * ppm / 1000000 * eff / 100

**Format:** integer

#### Cost per defect caught

**Key:** cost_def

**Expr:** if(gt(found, 0), labor / found, 0)

**Format:** currency

**Description:** High values suggest fixing the process is cheaper than sorting.

#### Residual defect rate shipped

**Key:** escape_ppm

**Expr:** ppm * (1 - eff / 100)

**Format:** integer

**Description:** PPM that still reaches the customer even with 100 percent inspection.

**Chart:**

#### Containment labor cost vs duration

**Type:** line

**X:** days

**From:** 5

**To:** 120

**Steps:** 24

**Series:**

- labor

**Disclaimer:** Excludes gages, fixtures, training, reinspection of rework and any customer-mandated third-party sorting charges.

## Content

**Intro:** When a customer places you in controlled shipping, extra inspection starts immediately and nobody has priced it. This calculator estimates headcount, labor and defects caught for 100 percent inspection, and shows the residual defects that still escape because inspection is never perfect.

**Sections:**

#### How to use it

**Body:** Enter daily shipped quantity, the seconds needed to inspect one part and productive hours per inspector. Add the loaded labor rate, expected duration and the defect rate you saw before containment. Set an honest effectiveness figure. The output gives inspectors required, labor cost over the period, the number of defects caught and the cost per defect found. If the customer sets an exit criterion such as a number of clean shipments, set the duration to the time you expect to need.

#### The formulas

**Body:** Inspection hours per day equal quantity times seconds per part divided by 3600. Inspectors are that figure divided by productive hours, rounded up. Labor equals hours per day times rate times days. Defects caught equal quantity times days times defect PPM over a million times effectiveness. Residual shipped PPM equals the original PPM times one minus effectiveness. Cost per defect is labor divided by defects caught.

#### Reading the result

**Body:** A cost per defect found in the hundreds or thousands of dollars is a strong argument to fix the cause. Containment buys time, not quality. Also read the residual PPM: with 85 percent effectiveness, 2,500 PPM becomes about 375 PPM, which may still be unacceptable. If so, consider automated inspection, a second independent check or a smaller scope aimed at the failing characteristic.

#### Common mistakes

**Body:** People assume 100 percent inspection is 100 percent effective. Human inspectors lose accuracy with fatigue and repetition, so effectiveness falls over a shift and with low defect rates. Another error is ignoring that inspection time per part grows when the inspector must also record data or segregate suspect parts. Finally, forgetting to include supervision and the extra floor space and containers for quarantined parts.

**Cta:** Netray can help link containment records, lot data and defect history in your ERP, so exit criteria can be shown from the record instead of a spreadsheet.

**Faq:**

#### What is controlled shipping?

**Answer:** Controlled shipping is a customer-imposed process where a supplier adds an extra inspection or containment step on shipments after a quality escape. Levels and rules are defined by each customer, so follow their procedure.

#### How effective is visual inspection?

**Answer:** Effectiveness varies widely by defect type, lighting and fatigue. Many studies of manual visual inspection show results well below 100 percent, so planning on 80 to 90 percent is more honest than assuming perfection.

#### How long does containment last?

**Answer:** Duration is set by the customer's exit criteria, for example a number of consecutive shipments with no defects found. Use a realistic length rather than the minimum when estimating cost.

#### Is containment the same as corrective action?

**Answer:** No. Containment protects the customer in the short term. Corrective action removes the cause. This calculator helps show why corrective action is usually cheaper than long containment.

## Search terms

controlled shipping level 2 cost, containment cost calculator, 100 percent inspection cost, sorting cost calculator, inspection effectiveness calculator, containment inspectors needed, csl cost calculator, cost per defect found

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