Recently, automobile manufacturing companies, which are major customers of them, are requiring IATF 16949 (ISO/TS 16949) certification as a mandatory requirement to secure product quality. In particular, IATF 16949 : 2016, revised in October 2016, was reinforced product traceability requirements for production information management by lot in the production process. Therefore, small and medium-sized precision parts processing companies in the automobile industry are very difficult to survive due to quality and price competition for customers satisfaction. MES (Manufacturing Execution System) is required to solve this problem. However, small and medium sized precision parts processing enterprises are reluctant to introduce the MES which is not suitable for the manufacturing environment of them such as high cost and low utilization. Even if the system is introduced, it is difficult to operate and maintain the system because the lack of computer manpower. In this paper, we propose a method for building a lot tracking system for small and medium precision parts processing companies by reviewing relevant literature and analyzing cases. In addition, by managing the production history for each lot of the final product in the system, we will grasp the effect of reducing the quality failure cost obtained by minimizing the range of defect selection.

The successful and sustainable growth of SMEs depends on their ability of strengthen their competitiveness in quality and cost and service more than anything else as a fundamental of operation. Among these key competitive factors of SMEs, quality is the most critical factor in manufacturing business fields. There are many different ways to improve the quality performance but it needs proper management decision to choose the best way what can maximize outputs with minimum inputs. And it needs effective measurement methods and some indicators to analysis the quality performance properly. The quality cost is one of the simplest key indicators to measure the quality performance and the effectiveness of quality related management decisions. In this study, through survey on local SMEs, we found that their average annual quality cost ratio versus turnover - total amount of annual quality cost divided by annual turnover - is around 3.69% excluded some SME's performances what have different quality control measures with others. And we found some results what corresponded with the early studies on the correlations between those categorized quality costs factors and some discrepancies between some of the literature model and the early case study results as follows. There were negative correlations between the Prevention costs and the External failure costs, and the Appraisal costs and the External failure costs, and there was positive correlation between the Appraisal costs and Internal failure costs same as early studies. But, we couldn't found any strong negative correlations between the Cost of control - Prevention costs & Appraisal costs - and the Cost of Failure of control - Internal & External failure costs -.