Scrap Levels Benchmarked - Continuous Improvement not necessary?

[Shiv]

Hello All,
I am writing this in order to get some idea or some real hard facts about an issue which is getting to be very crucial in our organization where we manufacture cables.

In our recent attempt to certify our plant to the new ISO 9001 2K standard I suggested that we look into scrap levels in our industry as an area of improvement. The present levels as it stands in our industry is about 4% per month (of the monthly sales in value).

I was told (by some of the managers) that we are well at par with the some of the European firms manufacturing similar products and do not need to improve on that front. Although I could see the scrap levels are increasing steadily (continually is more apt).

However, I am not convinced on this line of logic. I would appreciate if anybody out there (preferably from cable a industry) could throw some light on the scrap percentage levels monthly or annually in their factories.

At least that would give me some ideas and facts to work on with the managers.

Thanx in advance

Shiv

[Claes Gefvenberg]

Hello Shiv,

I have no idea about what would be considered a normal scrap level in your industy, but there is certainly nothing wrong with your reasoning.

4% of the sales value ought to be a lot of money, and even if that level is considered "normal" perhaps you are able to do better. If so, it would give you an edge...

I think you are on the right track.

/Claes

[Craig H.]

Shiv:

Why not try presenting the 4% as a monetary figure instead? In the U.S., we would say dollars, but I have to admit I have no clue what you use in the U.A.E.

Anyhow, 4%, while a good and precise measurement, is kind of abstract. Throwing out a monetary figure that would buy several Ferraris (or lots of steak dinners) should tend to bring things down to earth.

Just a thought.

Craig

[Mike S.]

Craig's idea is a good one, talk in money. Also, if you can show some simple graphs showing the increase in scrap, and then maybe show them one or two areas of "low hanging fruit" that might be easily fixed to reduce that scrap with a certain monetary payback in a certain time, you might get their attention. Then again, you might not.

[ben sortin]

Reducing scrap is one of best ways to better understand your processes and products. The fact that the metric is calculated as a percentage of sales tells me that "some of your managers" don't have the competitive pressures that always (did I say always) measure scrap as the number of defects and the cost per defect.

Note to file: Ben will not swing from cables that have not been sorted.

[mshell]

When scrap is produced at our organization, a corrective action is issued. The CAR includes the quantity, sales dollar amount, machine time costs, raw material costs, re-run costs and operator costs. This information is given to the supervisors who inform the responsible party (operator). In addition, I have used graphs to track the dollar value of scrap by shift/production line and posted the information for all to see. I have found that including all cost associated with poor quality (scrap) is a real eye opener for everyone involved. You will probably get more cooperation and suggestions for improvement from the operators if they are informed.

mshell

[Shiv]

I am sorry I could not write earlier, beacuse of an extended leave from my work. I would like to thank all who have replied to my posting.