Your factory uses ProFicient statistical process control (SPC) software to control the quality of production. Still, the factory is producing an excess amount of waste—and it is starting to add up.
While the manufacturing quality control software is doing its job, you can’t seem to leverage the SPC data that it is giving you to find out how much money you are losing. What you need are some ways of taking that raw data and translating the numbers into financial statistics.
In a video titled “Measuring the ROI of your SPC Software,” InfinityQS Vice President of Statistical Methods Steve Wise explains how executives can better understand the financial realities behind the data that is produced by SPC software solutions like those from InfinityQS.
Waste, as Wise explains, can be measured in time, materials or resources. And according to Wise, all operations produce waste. By keeping track of parts lost during manufacturing, it is possible to gauge how much you are spending on products that do not generate you any profit. This is what SPC software is designed to do.
While basic losses can be calculated by multiplying parts lost by the individual cost of each piece,it is not the most accurate way of generating the information you need. Wise shows how the Taguchi Loss Philosophy is an efficient way of converting SPC data.
The Taguchi Loss Philosophy shows that any time there is deviation from a target goal, excess costs will be generated. For instance, if you have a can of soup that must weigh 587 grams, anything below will be considered a violation and anything over would be considered a product giveaway. The “target” in this instance, is the middle ground between the two specifications.
“Conventional philosophy says that anything that falls within an upper and lower spec limit is 100 percent good,” Wise says. “There is no loss whatsoever. Only when it goes outside of the spec limit does total loss ensue.”
To see exactly how you can use mathematical functions such as the Taguchi Loss Philosophy to turn your SPC data into easily accessible cost reduction charts, check out Wise’s presentation here.