Defect detection rollout on the line

Context

A manufacturer builds the case for AI defect detection on a production line. The value is scrap rate reduction, but the assumed baseline scrap rate and the improvement are estimates, and the case lives or dies on them.

The decision

The tornado shows the annual value (scrap rate) assumption dominates; fund on the band and instrument the baseline before scaling.

What most miss

Teams present a crisp NPV built on an un measured baseline scrap rate. The honest move is to widen the band on that one assumption and measure it in the pilot.

Stakes

A defect detection case built on an optimistic scrap baseline can miss its number by half once the real rate is measured.