Non-Recurring Engineering
Meaning ~ Non-Recurring Engineering is the one-time cost itemized in supply agreements to cover custom tooling, design, and testing required to initiate manufacturing.
Run at Rate
Meaning
Production validation exercises that require a manufacturer to demonstrate the ability to produce a specific volume of goods at full speed over a set duration confirm the capacity of the manufacturing process. This run at rate test is a mandatory step in the automotive and electronics industries before a supplier is allowed to begin mass production. It proves that the factory can meet the peak demand of the customer without sacrificing quality or safety.
The test is limited to a continuous shift, usually ranging from four to eight hours, and it must use the actual production tools, workers and materials. It governs the final approval of the manufacturing line, moving the project from the development phase to the execution phase.
Throughput Validation
Success is measured by comparing the number of good parts produced during the test to the target rate required by the contract. This run at rate ensures that the cycle times for each station are realistic and that the transitions between stations are smooth. If the machines break down or the workers cannot keep up, the test is a failure.
The test also tracks the amount of scrap and the number of units that require rework during the high-speed run. A factory might be able to produce ten units an hour with perfect quality, but if they try to produce twenty units and the scrap rate jumps to fifty percent, the process is not stable. The data collected during the run provides a baseline for what the factory should be able to achieve every day.
Process Stability
Observations during the exercise focus on the reliability of the equipment and the supply of materials to the line. This run at rate identifies the hidden bottlenecks that only appear when the factory is running at full capacity. For example, the forklift might not be able to bring raw materials fast enough, or the cooling system for a machine might overheat after several hours of constant use.
These problems must be fixed before the buyer will sign the final contract. The test is usually performed under the supervision of a quality engineer from the buyer’s company. They watch for any signs of stress in the system that could lead to a failure later on.
A stable process is one that can repeat the same results hour after hour without any intervention from the engineers.
Capacity Assurance
Risk for the buyer is reduced because the test provides physical proof that the supplier is ready to deliver. This run at rate is the best defense against a supplier who overpromises how much they can build. If a supplier fails the test, they must pay for the changes needed to improve the line and then run the test again.
The cost of these delays is high, so the supplier is motivated to get it right the first time. For the buyer, the test ensures that they will not face a shortage of parts once they launch their new product. It also sets the standard for future audits of the factory.
If the daily production ever falls below the rate achieved during the test, the buyer has the right to demand an explanation and a corrective action plan.