The effectiveness of statistical techniques in the management of manufacturing processes is reviewed, and difficulties in applying these techniques in the automotive stamping and assembly environment are discussed. The use of machine vision measurement to overcome these difficulties is described and examples of functioning installations are shown. The problem encountered in evaluating such systems in terms of quality improvement is explained, costs of product specification conformance and nonconformance are defined, and quality costs for U.S. and Japanese industry are compared. Reduced nonconformance cost is identified as the probable explanation for the Japanese advantage in the cost of quality comparison, and Japanese use of Taguchi's loss function is proposed as one of the mechanisms by which this has been accomplished. Examples of loss function analysis using actual production data recorded by a machine vision measurement station are presented to illustrate the potential of this method to quantify process improvements.