The Scrap and Rework Reduction Road Map

In most organizations, when a manufacturer produces a product it is inspected at various stages during the production cycle. In some cases, the product is found to be nonconforming. Nonconforming means the product does not meet its drawing or specification requirements. When this occurs, the organization needs to decide what to do with the nonconforming item. The manufacturer can:

• Use it “as is” in the nonconforming condition if the product is deemed acceptable for use in its nonconforming condition and it is acceptable to the customer.

• Rework the nonconforming material such that it meets the drawing requirements. Repair the nonconforming material in a manner that doesn’t exactly meet the drawing requirements, but the repair makes it suitable for use (again, if this is suitable to the customer).

• Scrap the nonconforming item if it cannot be reworked or repaired economically.

The cost of these activities is high. Most people are surprised when they learn how high the costs of poor quality are. Informed estimates consistently place the cost of poor quality between 20 and 50 percent of the total cost of goods sold. That is a huge number, and it represents a huge opportunity. If the organization can reduce the amount of nonconforming material it produces, the cost of reworking, repairing, remaking, and administering nonconforming material will lower costs significantly.

Recommended scrap and rework reduction approach.

Source:Cost Reduction and Optimization for Manufacturing and Industrial Companies