Finding Cost Savings in Challenging Economic Times: Reduce your Scrap, Rework, and Waste with a CMMS
In 2023, inflation, challenging supply chain, the aging and changing workforce impact, and other factors create complications for your budget. Those headwinds are typically uncontrollable factors for most of us, yet you still need to find a way to be profitable. What can you do? Find areas that you can control that have proven to lower costs in your operations. Reducing “scrap,” “rework,” and even “waste” is under your control if you have the right tools and processes.
A computerized maintenance management system (CMMS) helps manufacturers and other industrial organization in a plethora of ways, including:
- Optimizing your teams through smarter and better managed work orders (preventive and corrective)
- Managing all your assets and facilities – day-to-day operations, especially reducing unplanned downtime
- Superior management of spare parts inventory – especially in these evolving supply-chain times
- Safety and compliance
- Reducing scrap and work by improve end-to-end quality, reducing inefficiencies, improving process, and overall communication
Scrap, Rework, and Waste Defined
A high-level definition of scrap, rework, and waste:
- “Scrap” is the leftover or unused materials in the production process. The physical properties (or performance) of the product are out of design specification. This could be anything from metal shavings all the way to unused parts. Often scrap can be reused, but at a cost.
- “Rework” are parts created that do not pass quality inspections (defective, non-conforming, failed, etc.). The product's physical characteristics can be brought within specification by additional processing, usually at additional cost.
- “Waste” is different than “scrap” as it has no value except possible recycling. Waste is obviously the highest cost.
Basically, if it comes off your line or manufacturing process and cannot be used, it raises costs, and hurts profit. You need to reduce where you can.
Causes of Scrap, Rework, and Waste
Scrap, rework, and waste come from many origins. These could people, process, and/or environmental related. Given this is a CMMS-focused blog, not all of the sources can be remedied by a CMMS, so I encourage you to review all aspects of your production process to reduce. For example, “human error” can be a common source. Training, proper processes, and similar are essential. “Poor quality materials” can be another source. We all look to save money, but if those savings accelerate scrap/rework, and waste, analysis must be done to see if is worth it.
There are plenty of methods where a CMMS can have direct benefit to reducing scrap, rework, and waste:
- Machine malfunction
- Miscalibration of assets
- Installing incorrect parts
- Improperly maintained assets and productions lines
Using a CMMS to reduce Scrap, Rework, and Waste
Avoiding an asset from “malfunctioning” is an imperative to have smooth operations. This goes together with “improperly maintained assets/lines.” Proper maintenance, including a healthy dose of preventive, and even predictive maintenance. This is especially aided by IoT sensors on your assets to catch problems when they are super small, avoiding not only scrap and rework, but also profit-killing unplanned downtime. Better maintained assets and facilities are far more likely to create better quality end-result products or parts. Not to mention all the other benefits of a CMMS, each of which can reduce costs. A commitment to calibration (which can be aided in a CMMS) can be essential to reducing scrap, rework, and waste.
A quality assurance program, which should be harmonious with a CMMS, is essential. In the case of scrap, rework, and waste, you need to make a commitment to continuously measure all sources by the hour, shift, part, material, operator, and more. By building analysis showing your scrap, rework, and waste “bad actors,” you can take proactive steps to remedy and reduce.
For those of you that measure overall equipment effectiveness (OEE), you likely understand that one of the three key metrics is focused on waste. If you have too much scrap, your OEE is directly affected and conversely, clean up your scrap and you get a better OEE score. Scrap is also considered one of the “Six Big Losses” around improving OEE. In all events, scrap, and possible subsequent rework, will hurt manufacturing productivity, raise costs, and negatively affect productivity.
There are lots of benefits when you take initiatives to reduce scrap, rework, and waste, including:
- Improved quality of finished produced parts, products, and goods
- Help production stay on schedule
- Reduce the amount of rework
- Decrease line stoppages due to fewer missing parts
- Overall reduction of costs and improved profitability
- Reduced environmental footprint due to less waste
Recent economic and operational headwinds affect all aspects of society, especially manufacturing and industrial organizations. In this hyper-competitive manufacturing world, we need to be efficient, smart, and productive everywhere we can — especially with controllable factors. Reducing scrap, rework, and waste is one of these areas where direct improvements can be made. The combination of best-practices and CMMS technology will not only help reduce but have other general benefits to the organization, controlling costs, and ultimately improving profitability.