Boosting Quality Eliminates Scrap and Accelerates Throughput
We received a phone call from a large metal forming manufacturer, and they said that they were they're in trouble. They had some quality problems. And so, I flew out there with some colleagues and took a look at what they're dealing with.
And they were forming very large aluminum products that were very complex. And the issue that they finally told us was that they had about 45% manufacturing scrap rate, which was amazing because these are enormous pieces of aluminum, you know, 40 or 50 feet wide by 70 feet long or so.
And the issue there was that they had extreme costs in terms of quality: costs of scrapping these products, inspecting them, and all that. And so, they said, “We really need some help with this.”
And so, what we did is we allowed them, with our software, to gather the data so they could be informed as to what's happening with these products that they're making and where the opportunities for improvement were. Long story short, what they able to do is: over a three-month period, they were able to completely eliminate their out-of-spec product. It was amazing; they went from 45% out-of-spec to zero in less than three months.
And it wasn't just that they saved an enormous amount of money on the quality costs for scrapping those products, and inspecting those products, and all the quality costs associated with that. But what they also did, and they didn't realize this, was that as soon as they got rid of all the scrap their throughput increased by 54 percent.
So, this enormous plant was able to not just eliminate their quality issues, but also dramatically increase the throughput and how fast they're making these products throughout this enormous plant. It was so incredible—the results they got—that they had vice-presidents from this company coming down the shop floor and go, “What are you guys doing?” because they could see the quality improvements on the bottom line in terms of costs avoided and throughput and how quickly they were getting things through that plant.
So, there was this… what really got the vice president's attention was that they were true bottom line cost savings that happened in a very short period of time all through just looking at data, getting information from it, and then acting upon it to eliminate quality issues.