Business associates reviewing notes together in a meeting.

Operations Improvement: Reduced Rework from 55% to 20%, Saving $325,000 Annual

January 3, 2016

Industry Department:

Manufacturing- Assembly

Process:

Production

Objectives:

  • Reduce the rework rate
    • This also involves an examination of what requires rework
    • Goal of reducing from 55% to 27% of output requiring rework
  • Increase the output
    • 3,500 to 5,000 units per day
  • Decrease labor costs
    • $1.60 to $1.36 per unit

Timeline:

  • This project spanned a few months.

Key Tools Used:

  • Black belt skills were used here. Some of which were:
    • Process Mapping
    • Cause and Effects Matrix
    • Process FMEA
    • Hypothesis Testing
    • Process Capability Study
    • Design of Experiments
  • SBTI can teach your company and employees these skills

Deliverables:

  • One inspection process was removed
  • A direct link to product performance was established

Metrics or Results:

  • Rework rate was reduced from 55% to under 20%
  • $325,000 Annual Savings to the Company
  • Reduction on the amount of inspection required by over 5 people

Lessons Learned:

  • Previous definition of what requires rework was very subjective and had no direct link to performance
  • Before project, there was no clear definition of “good” and “bad”
  • Before the project, different levels of defect detection were present

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