# Medical Device Nonconformance (NCR) Cost Calculator

> Source: https://netray.co/tools/medical-device-ncr-labor-rework-scrap-cost-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Builds a cost per NCR and an annual cost from NCR volume, burdened labor, MRB time, rework and scrap mix, and CAPA escalation rate. Includes a volume sweep.

## Category

cost-finance

## Industry

Medical Devices

## Audience

- Quality manager
- Operations manager
- Controller
- Quality engineer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### NCRs opened per month

**Key:** ncr_month

**Type:** number

**Default:** 18

**Min:** 0

**Step:** 1

**Unit:** NCRs

**Help:** Count from your NCR log, including supplier and in-process NCRs.

#### Burdened labor rate

**Key:** rate

**Type:** number

**Default:** 68

**Min:** 0

**Step:** 1

**Unit:** $/hr

**Help:** Wage plus benefits and overhead for the mix of quality, engineering and operations staff involved.

#### Triage, investigation and paperwork per NCR

**Key:** admin_hrs

**Type:** number

**Default:** 5.5

**Min:** 0

**Step:** 0.5

**Unit:** hrs

**Help:** Segregation, tagging, root cause, record writing and closure review.

#### MRB person-hours per NCR

**Key:** mrb_hrs

**Type:** number

**Default:** 4

**Min:** 0

**Step:** 0.5

**Unit:** hrs

**Help:** Meeting time multiplied by the number of attendees.

#### NCRs dispositioned as rework

**Key:** rework_pct

**Type:** slider

**Default:** 45

**Min:** 0

**Max:** 100

**Step:** 5

**Unit:** %

#### Rework and re-inspection hours per reworked NCR

**Key:** rework_hrs

**Type:** number

**Default:** 6

**Min:** 0

**Step:** 0.5

**Unit:** hrs

#### NCRs dispositioned as scrap

**Key:** scrap_pct

**Type:** slider

**Default:** 20

**Min:** 0

**Max:** 100

**Step:** 5

**Unit:** %

#### Average scrapped value per scrapped NCR

**Key:** scrap_value

**Type:** number

**Default:** 850

**Min:** 0

**Step:** 25

**Unit:** $

**Help:** Material plus conversion cost already spent on the scrapped units.

#### NCRs escalated to CAPA

**Key:** capa_pct

**Type:** slider

**Default:** 10

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

#### Labor hours per CAPA

**Key:** capa_hrs

**Type:** number

**Default:** 40

**Min:** 0

**Step:** 5

**Unit:** hrs

**Help:** Investigation, action plan, implementation and effectiveness check.

**Outputs:**

#### Handling cost per NCR (triage plus MRB)

**Key:** admin_cost

**Expr:** (admin_hrs + mrb_hrs) * rate

**Format:** currency

**Description:** Labor that every NCR consumes regardless of disposition.

#### Expected rework cost per NCR

**Key:** rework_cost

**Expr:** rework_pct / 100 * rework_hrs * rate

**Format:** currency

**Description:** Probability-weighted rework labor.

#### Expected scrap cost per NCR

**Key:** scrap_cost

**Expr:** scrap_pct / 100 * scrap_value

**Format:** currency

**Description:** Probability-weighted value of scrapped product.

#### Expected CAPA cost per NCR

**Key:** capa_cost

**Expr:** capa_pct / 100 * capa_hrs * rate

**Format:** currency

**Description:** Escalation rate multiplied by CAPA labor.

#### Fully loaded cost per NCR

**Key:** cost_ncr

**Expr:** admin_cost + rework_cost + scrap_cost + capa_cost

**Format:** currency

**Primary:** true

**Description:** Sum of the four expected cost elements.

#### Annual cost of nonconformance (internal failure)

**Key:** annual

**Expr:** cost_ncr * ncr_month * 12

**Format:** currency

**Primary:** true

#### Labor hours consumed per year

**Key:** hours_year

**Expr:** ncr_month * 12 * (admin_hrs + mrb_hrs + rework_pct / 100 * rework_hrs + capa_pct / 100 * capa_hrs)

**Format:** number

**Description:** Excludes the scrap value, which is material and conversion cost.

#### Equivalent full-time people (1,800 productive hrs/yr)

**Key:** fte

**Expr:** hours_year / 1800

**Format:** decimal

**Chart:**

#### Annual NCR cost vs NCRs per month

**Type:** line

**X:** ncr_month

**From:** 2

**To:** 60

**Steps:** 30

**Series:**

- annual

**Disclaimer:** Internal failure cost only. It excludes complaints, field actions, regulatory exposure and lost customer confidence. Dispositions are modeled as mutually exclusive shares, so rework plus scrap should not exceed 100%.

## Content

**Intro:** Quality managers at device contract manufacturers are often asked to justify headcount, tooling or process improvements, and the request lands better in dollars. This calculator turns your NCR volume and disposition mix into a cost per nonconformance and an annual figure you can take to the controller.

**Sections:**

#### How to use the calculator

**Body:** Start with the number of NCRs opened per month from your log, then enter a burdened labor rate that reflects the people who actually touch an NCR. Estimate triage hours, MRB person-hours (meeting length multiplied by attendees), and the share of NCRs that end in rework, scrap or CAPA. If you do not know the disposition split, sample the last 30 closed NCRs and count. Use the primary outputs to see cost per NCR and cost per year, then drag the volume input to see how savings scale if you halve your NCR rate.

**Bullets:**

- Use your own closed NCR records for hours, not guesses
- Include supplier NCRs if your team handles them end to end
- Keep rework and scrap shares at or below 100% combined
- Re-run with a reduced NCR rate to size an improvement project

#### The cost model and its assumptions

**Body:** The model is an expected-value cost build. Each NCR incurs handling labor (triage, investigation, record work and MRB). With probability equal to the rework share, it also incurs rework and re-inspection labor. With the scrap share, it incurs the value of scrapped product. With the CAPA share, it incurs CAPA labor. Cost per NCR is the sum, annual cost is that value times NCRs per month times twelve, and full-time equivalents divide annual hours by 1,800 productive hours. This follows the standard cost-of-poor-quality internal failure category used in quality costing practice.

#### Reading the results

**Body:** Two patterns show up repeatedly. First, handling labor often exceeds the scrap value, because small-value NCRs still consume investigation and MRB time. That argues for pre-approved dispositions and a lightweight path for minor, low-risk findings, while keeping the documented evaluation ISO 13485 clause 8.3 requires. Second, a modest CAPA escalation rate can dominate hours. If CAPA labor is your largest slice, review whether escalation criteria are risk-based or reflexive. Compare the annual figure to the cost of the corrective project it would justify.

#### Common mistakes

**Body:** Teams under-count hours by ignoring the operators who segregate and tag product, the quality technicians who re-inspect, and the engineers pulled into MRB. They also forget that every held lot has a carrying cost and may delay shipment, which is a real cost not captured here. Do not use this figure for external failure cost, because complaint handling, MDR reporting and field actions follow different economics. Treat the output as a conservative internal floor and state the assumptions beside the number when presenting it.

**Cta:** If your NCR data sits in an ERP quality module or a spreadsheet, we can pull the hours, dispositions and scrap values automatically so this number updates itself every month.

**Faq:**

#### What does a typical NCR cost a medical device manufacturer?

**Answer:** It varies widely with product value and process complexity. Handling labor alone is often a few hundred dollars once triage, investigation and MRB time are counted, and scrap or CAPA escalation can multiply that. Use your own hours and dispositions rather than an industry average.

#### Should I include CAPA cost in the NCR cost?

**Answer:** Yes, but only the share of NCRs that actually escalate. The calculator weights CAPA labor by your escalation rate, so a 10% escalation rate adds 10% of the CAPA hours to the average NCR rather than all of it.

#### Why are rework and scrap percentages separate inputs?

**Answer:** Because they have very different cost structures. Rework consumes labor, scrap consumes the value of material and conversion already spent. The remainder, such as use as is or return to supplier, is modeled as handling cost only.

#### Does ISO 13485 require this calculation?

**Answer:** No. ISO 13485 requires controlling nonconforming product and keeping records, but it does not require costing. Management can use the cost figure as an input to management review and to prioritize corrective action.

## Search terms

nonconformance cost calculator, cost of NCR medical device, cost per nonconformance report, MRB cost calculator, cost of poor quality medical device manufacturing, rework and scrap cost calculator, ISO 13485 nonconforming product cost, NCR cycle time cost

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