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Home SolutionsManufacturing
 Manufacturing
and Production
Do You Recognize Any of These Situations in Your Company?
The following situations are commonly found in the production areas of many
organizations.
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Too many defective units are produced.
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Scrap and rework levels are too high.
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Delays in filling orders is costing us customers.
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It’s impossible to produce good products when our incoming materials are so
poor.
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The production line is down several times a day. It’s costing us a fortune.
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We seem to be making constant adjustments to the production line, but things
don’t get better--in fact, they sometimes get worse.
Here are some examples of how Booth Associates can help:
Process improvement
An electrical component has been unstable since development. The variation from
unit to unit is high and the company averages about 2.1 percent (0.021)
defective units. The average daily production is 13,200 units with a production
cost of 1.435 dollars per unit. Defective units must be scrapped.
The average number of scrapped units per day is 277.2, with a daily scrap cost
of about $398. A month having 28 production days will suffer a loss of $11,144
per month.
A designed experiment is conducted using one engineer and one technician for one
week (cost = $1,442). Material costs for the experiment are $835. The
experimental results permitted reduction of the scrap rate to about two tenths
of one percent (0.002) defective units.
This results in a monthly scrap loss of only $1,061. This is a monthly savings
through scrap reduction of $10,083, or an annual savings of $120,996 for a
total outlay of only $2,277. This is a return on investment of 53 to one in the
first year alone.
Process downtime
A company that manufactures milled, metal replacement parts, found that changes
occurred gradually in the production process. These changes caused the outgoing
product to fall out of specifications. When this happened, several hundred
non-usable units would often be produced before the problem was discovered. The
entire line would then have to be taken down, and all production workers would
be at a standstill until the faulty parts were located and replaced.
On the average, this type of problem would occur over 7 times per month. When
the problem occurred, the average number of non-usable units produced was 432
units. The average downtime on the line was 1.23 hours, which left 84 workers
standing idle for the entire time. The cost (at $2.584 per unit) for the
non-usable units was $7,814 per month. In addition, the idle time of the 84
workers was 723 hours per month. At an average wage of $8.43 per person, the
wasted labor cost was $6,095 per month. The total of these costs was $13,909
per month.
Statistical process control was put in place that permitted early detection of
the problem (before any defective units were produced) which allowed the
problem to be corrected between shifts-- eliminating virtually all idle time as
well as non-usable units. The annual savings is $166,908 per year.
How Booth Associates Can Help
If you recognize any of these or have other problems in your company, we can
help you. We have helped many companies improve their bottom line, and we’ll do
the same for you. Please see our list of services
and contact us.
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