Manufacturers Cut Rework Costs with Process Improvement

recent study revealed that 20% of finished products need rework after not passing first inspection. On top of this, 20% of those included in the study admitted to not reworking the finished product. Why would the seemingly needed rework be neglected?

Rework may as well be synonymous with expense. Rather than viewing rework as an obstacle, it has potential to be viewed as a way to create savings. How? It is true that rework harms manufacturing business. However, understanding the factors that create rework can help improve manufacturing processes with the goal to make every product correctly the first time. An effective Enterprise Resource Planning (ERP) system, like Manufacturing 20/20 will provide precise data to improve production.

Defining Rework

Rework is the process of revising and making changes to a product during manufacture so it will meet expectations. Whether attaching a different label or welding extra material, the decision to scrap or rework the product must be made.

The direct cost of rework:

1.    Labor

2.    Materials/Supplies

3.    Overtime payments

4.    Expedited shipment expenses

The indirect cost of rework:

1.    Customer satisfaction

2.    Consumes capacity

3.    Irregular production schedules

Reducing rework

Without precise data, efforts to implement an effective rework scheme will be in vain. Accurate data shows where and when mistakes happen. With current and reliable statistics of production, Pareto analysis can be utilized to fix the error directly at its source.

The primary cause of frustration in manufacturing is machine downtime. Regularly scheduled maintenance remedies this frequently encountered hassle. Job completion rates increase when industrial operations follow all scheduled and planned machine maintenance due to avoid unscheduled downtime.

The operation standardization ERP implements assists employee performance evaluation and supplementary training programs. The backbone of a successful business is employees that are well trained. Employees who offer optimal performance also offer quality assurance and a more consistent finished product.

Properly trained and educated machine operators have had formal step-by-step training mixed with an informal peer shadowing process. All equipment operators should be trained on all standardized equipment and continually monitored. Safety education is also an important facet to increase employee stability and avoid unscheduled downtime.

ERP cuts rework costs by:

  1. Providing statistics to monitor production improvement efforts
  2. Implements operation standardization from the management of inventory to BOM maintenance scheduling
  3. Makes data available to employees to make informed decisions
  4. Eliminates mistakes due to inconsistency

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