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The Hidden Cost of Worker Turnover: Attributing Product Reliability to the Turnover of Factory Workers
Working Paper

Product reliability is a long-standing concern among product manufacturers, and researchers have identified a number of factors that significantly affect product reliability. In this paper, we examine a previously under-recognized yet impactful determinant of product reliability: a high rate of turnover on the manufacturing line when the product was assembled. Even when assembly lines are designed to minimize product defect rates through simplified tasks and stringent quality control tests, quality variations may exist in the manufactured units that are only revealed after they have been used repeatedly. If this is the case, then the disruptiveness of high turnover may directly lead to product reliability issues. To evaluate this possibility, we link four post-production years of field failures for tens of millions of consumer mobile devices back to their production lines. After controlling for known factors affecting reliability (workloads, learning, and component quality), we find that the likelihood of field failure increases by 7-8% when a device is produced in the monthly high-turnover weeks following paydays; and that even in other weeks, product reliability responds significantly (2-3%) to the individual assembly lines' weekly turnover rates. Together, we demonstrate that staffing and retaining a stable factory workforce critically underlies product reliability, and we show the value of connected field data in informing manufacturing operations. Ultimately, products are more reliable when workers are more reliable.

Keywords: Data-driven workforce planning, Empirical operations management, Employee turnover, People 

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