Business Case Solutions - 16 - Production Attrition & Scrap


Business Case Solutions

To effectively reduce attrition and scrap, NE Company must be able to identify, track, and eliminate common sources.  In order to realize a benefit of this effort, they must be able to complete these steps at a significantly lower cost than the cost of the attrition and scrap.
 
Identify-
  • Cycle Count and Physical Inventory - Many companies rely on these to find inventory discrepancies.  While these methods can keep inventory levels more accurate, they cannot identifying sources of attrition and scrap without additional work.  However, companies looking to keep costs down, may use these methods to identify components with the greatest attrition problems.  Once they identify a problem part, they can use the subsequent methods to identify sources and reduce or eliminate attrition. 
  • Spot counting components upon kit completion - If companies count components upon kit completion, they will immediately know which kits are responsible for the attrition and scrap.  While it doesn't specifically highlight the cause, it does narrow it down and make it much easier to make improvements.  This process increases in value if the parts are separated by work center.  Ideally, users would be able to choose which parts are counted and which are left for cycle counting.
  • Process review - Companies should review the production processes for work centers responsible for attrition.  Companies should give special attention to identify when the attrition is isolated to a single job or across multiple jobs.  Processes that consistently exceed attrition expectations, regardless of the job, should be reviewed and updated or result in an increase in charges to the customer.

Additional methods (if applicable)

  • Employee review - If needed, companies may need to review the practices of specific employees.  This is made easier when defects and shortages can be connected with specific employees. 
  • Machine Information - If available, machine consumption information can be an invaluable tool for identifying attrition and scrap.  If done real-time, this may also identify bad feeders, nozzles, programming, etc.
Track-
 
Once a company identifies a possible source of attrition and scrap, they should make any obvious corrections, and track that source over time.  This will indicate the seriousness of the issue and whether additional steps are required.  Reports and updates from each of the steps listed above can provide the needed information to view the impact of the issue and the improvements from changes.
 
Eliminate-
 
The preferred method for eliminating or reducing the source of a shortage varies greatly depending on the source and situation.  Communication is critical to successfully improving attrition and scrap levels.  Companies must ensure that production is using the latest process instructions, problem machines, and feeders are avoided, and employees are properly trained.