Journal
MANAGEMENT SCIENCE
Volume 68, Issue 5, Pages 3755-3767Publisher
INFORMS
DOI: 10.1287/mnsc.2022.4311
Keywords
data-driven workforce planning; empirical operations management; employee turnover; people operations; product quality; productivity; quality management; supply chain management
Funding
- Wharton Global Initiatives
- Wharton Dean's Research Fund
- Claude Marion Endowed Faculty Scholar Award of the Wharton School
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This study examines the impact of worker turnover on product reliability. The data collected from a major consumer electronics producer's supply chain reveals that each percentage point increase in the weekly rate of workers quitting from an assembly line leads to a 0.74%-0.79% increase in field failures. The study also finds that high turnover weeks, especially those following paydays, result in significantly more field failures compared to low turnover weeks. The findings highlight the importance of a stable factory workforce in ensuring product reliability.
Product reliability is a key concern for manufacturers. We examine worker turnover as a significant but underrecognized determinant of product reliability. Our study collects and integrates (1) data reporting factory worker staffing and turnover from within a major consumer electronics producer's supply chain and (2) traceable data reporting the component quality and field failures-that is, replacements and repairs-of nearly 50 million consumer mobile devices over four years of customer usage. Devices are individually traced back to the factory conditions and staffing, down to the assembly line-week, under which they were produced. Despite the manufacturer's extensive quality control efforts, including stringent testing, each percentage point increase in the weekly rate of workers quitting from an assembly line (its weekly worker turnover) is found to increase field failures by 0.74%-0.79%. In the high-turnover weeks following paydays, eventual field failures are strikingly 102% more common than for devices produced during the lowest turnover weeks immediately before paydays. In other weeks, the assembly lines experiencing higher turnover produce an estimated 2%-3% more field failures on average. The associated costs amount to hundreds of millions of U.S. dollars. We demonstrate that staffing and retaining a stable factory workforce critically underlies product reliability and showcase the value of traceability coupled with connected workplace and product data in supply chain operations.
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