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Process Improvement for a Materials Perspective

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					 Process Improvement from a
    Materials Perspective
          Solutions looking for problems
                        or
          Problems looking for solutions?




Manufacturing                      Waste Management
Extension                         and Research Center
Partnership
    Process Improvement from a
       Materials Perspective
   Materials utilization
   How can processes be improved
    – Eliminating/Replacing materials
           Replacing Solvent with Aqueous Cleaners
    – Reusing materials
           The Army has recently authorized the use of re-refined used
            motor oil for use in ground equipment
    – Recycling materials, and
           paper waste
    – Consolidating/eliminating process steps.


Manufacturing                                       Waste Management
Extension                                          and Research Center
Partnership
    Expanding the Relationship
   Gather information
    – Industrial or Manufacturing Directory
          SIC code
          Sales

          Size

    – Dun & Bradstreet
          Company history
          Personnel profiles

          Financial report

    Manufacturing                      Waste Management
    Extension                         and Research Center
    Partnership
        Expanding the Relationship
   Made several visits to the facility
     – Observed what they do
     – Met the Facility Manager and supervisors
   Implemented Several Pollution Prevention
    Projects
     – Replaced Solvents with Aqueous Cleaners
     – Introduced Membrane Filtration on Aqueous Cleaners
     – Implemented Rag Recycling to Reduce the Volume of
       Solid Waste

    Manufacturing                           Waste Management
    Extension                              and Research Center
    Partnership
    Expanding the Relationship
 Trusted
 Useful
 Cost effective, and
 Credible.




    Manufacturing        Waste Management
    Extension           and Research Center
    Partnership
                               Follow Up Call
   Bumpers-R-Us Corporation
     – Mr. Sid E. Ways
                Process line manager


   This scenario is an example only and is not used to imply
    that any member of NIST, IMEC, or any other organization
    affiliated with NIST is not fully capable in the performance
    of their duties.




    Manufacturing                                                   Waste Management
    Extension                                                      and Research Center
    Partnership
                    Good Job!
   Solved another problem
     –   Increased client satisfaction,
     –   Gained more trust and influence,
     –   One more bean to count, and
     –   Big project is on the horizon!!




    Manufacturing                        Waste Management
    Extension                           and Research Center
    Partnership
                    Follow-Up
 3 months later
 Pitch the “Big project”
     – Programmable Logic Control (PLC)




    Manufacturing                    Waste Management
    Extension                       and Research Center
    Partnership
             Solutions Looking for
                   Problems
 “If the shoe doesn’t fit -
   – there’s something wrong with your foot”
 Promoting inappropriate changes
     – Don’t see the whole picture
          Don’t understand the problem
          Don’t understand the solution

   Solving the problem at the source.
    Manufacturing                           Waste Management
    Extension                              and Research Center
    Partnership
               Project Opportunity
                  Assessment
   Set up a meeting
     –   Reviewed the problem,
     –   Mapped the process,
     –   Found the root cause of the problem, and
     –   Brainstormed a solution as a team.



    Manufacturing                         Waste Management
    Extension                            and Research Center
    Partnership
                    Coming Up
 How to develop a problem statement,
 How to map a production process,
 How to identify loss reduction opportunities,
 How to use a material loss assessment, and
 How to present your information.




    Manufacturing                 Waste Management
    Extension                    and Research Center
    Partnership
                    Next Up
   Process Mapping and Root Cause Analysis




    Manufacturing                 Waste Management
    Extension                    and Research Center
    Partnership
A                                         B




    Manufacturing    Waste Management
    Extension       and Research Center
    Partnership
A                                         B




    Manufacturing    Waste Management
    Extension       and Research Center
    Partnership
A                                         B




    Manufacturing    Waste Management
    Extension       and Research Center
    Partnership
  “When the map is
complete…..the route
   becomes clear”
      Ancient Chinese Proverb
     Process Analysis Techniques
 Problem Definition
 Process Mapping
 Root Cause Analysis
 Site Assessments
 Identifying Loss Reduction Opportunities



    Manufacturing               Waste Management
    Extension                  and Research Center
    Partnership
                Problem Definition
   Involves defining the…
     –   What?
     –   When?
     –   Where?
     –   Significance



    Manufacturing               Waste Management
    Extension                  and Research Center
    Partnership
        Problem Definition Step 1:
                 What?
    What opportunity will you address?
      – What issue keeps facility manager awake at night?
          What is their pain?

          What is their passion?

    Key tools…
      –   TOP 10 Self-Assessment
      –   Opportunity Prioritization Matrix
      –   Interviews/Surveys
      –   Scrap/reject reports
      –   Functional Assessments

    Manufacturing                              Waste Management
    Extension                                 and Research Center
    Partnership
      Problem Definition Step 2:
              When?
 When did the problem appear?
 Try to pinpoint precise dates/times
 Did problem coincide with something
  recently implemented?




    Manufacturing               Waste Management
    Extension                  and Research Center
    Partnership
      Problem Definition Step 3:
              Where?
 Narrow the boundaries!
 Did problem occur on …
     –   One shift?
     –   One activity?
     –   One supplier?
     –   One material?
     –   One machine?
    Manufacturing           Waste Management
    Extension              and Research Center
    Partnership
 Historical vs. Newly-Emerged
            Problems
                            6
          Reject Rate (%)   5
                            4
                            3
                            2
                            1
                            0
                                1   2   3   4   5   6   7   8   9 10 11 12 13 14 15 16 17 18 19 20 21 22
                                                                 Week Number


         Historical Reject Level                                                     Anomaly


                   Question: Where is the opportunity!?
Manufacturing                                                                   Waste Management
Extension                                                                      and Research Center
Partnership
      Problem Definition Step 4:
            Significance!
 Measure the impact of the problem
 Is it important to the company?
 Is it defined in terms of the company’s
  decision maker can understand?
 Will the elimination of the problem improve
  the company’s bottom line?

    Manufacturing                Waste Management
    Extension                   and Research Center
    Partnership
Problem Definition Summary
   Combine the…
     –   What?
     –   When?
     –   Where?
     –   Significance
   Develop a problem statement or effect

    Manufacturing                  Waste Management
    Extension                     and Research Center
    Partnership
       Initial Problem Statement
 NOTE: This is the problem as they
  PERCEIVE it
 May only be a symptom of the actual root
  cause
 Provides insight regarding parameters to
  monitor in process mapping

    Manufacturing                Waste Management
    Extension                   and Research Center
    Partnership
                    Process Mapping
   Why should we map a process?
     –   Improve process knowledge and understanding
     –   Identify and correct problem areas
     –   Identify loss reduction opportunities
     –   Determine usage and fate of raw materials and
         other resources


    Manufacturing                        Waste Management
    Extension                           and Research Center
    Partnership
       Three Questions Used in
          Process Mapping
 What happens next?
 What are the inputs?
 What are the outputs?




    Manufacturing          Waste Management
    Extension             and Research Center
    Partnership
            Complicating Factors
 General vs. Detailed Processes
 Ancillary Processes
 Intermittent Processes
 Process Upsets
 Looping Processes
 Splitting Processes

    Manufacturing                   Waste Management
    Extension                      and Research Center
    Partnership
      Military Root Cause Analysis

 Vehicle Maintenance
 Repair of Vehicle Sent from Organizational
  Shop
 Stated Problem (according to
  Environmental Manager):
     – “Too Much Oily Wastewater is Being
       Generated”

    Manufacturing                    Waste Management
    Extension                       and Research Center
    Partnership
            General Process Map



Organizational       Transportation   Higher Level           Organizational
Shop                 to Higher        Shop                   Shop
                     Level Shop




     Manufacturing                                    Waste Management
     Extension                                       and Research Center
     Partnership
                        Repair Need Identified
                            by Operator
                  Vehicle Washed to       Vehicle Released
Repair Verified    Identify Source
                                          to Organizational
                     of Problem
Vehicle Washed                                   Unit
   At Shop         Parts Ordered
                                         Vehicle Transported
Transported to
                   Repair is Made           Back to Unit
 Higher Shop
  For Repair
                    Road Tested              Vehicle
 Inspected at
 Higher Shop       Vehicle Washed            Repair
                  to Check for Leaks         Process
    Process loss problem example

 Bumper manufacturer
 Stamping and electroplating operations
 Stated Problem (according to plant
  manager):
     – “Electroplating operations can’t keep up with
       stamping operations”


    Manufacturing                        Waste Management
    Extension                           and Research Center
    Partnership
            General Process Map


                                      Powder Coating
                                      20,000 units/yr
Receiving           Stamping                                         Shipping
                                                                     50,000 units/yr
                    50,000 units/yr   Electroplating
                                      30,000 units/yr




    Manufacturing                                        Waste Management
    Extension                                           and Research Center
    Partnership
                          Soak Cleaner
Electroplating   T1    (Plans for prewash after
                              stamping)
                                                  380 sec.
Process
(Time Study)     T2    Spray Clean Rinse          170 sec.


                 T3       Electro Clean           380 sec.


                 T5    Counterflow Rinse          Dip 45 sec.


                 T6       Acid HCL Dip            35 sec.


                 T7            Rinse              Dip 10 sec.


                 T10      Electro Clean           145 sec.


                 T12   Counterflow Rinse          Dip 10 sec.


                 T13      Acid HCL Dip            40 sec.


                 T14   Counterflow rinse          35 sec.


                 T16      Rinse Shuttle           170 sec.
                 T17       Semi Brite Ni Plate         46 min.
Electroplating                          OR

Process          T18       Semi Brite Ni Plate         46 min.
                                        OR
(Time Study)     T19       Semi Brite Ni Plate         46 min.


                 T20           Tri Ni Nickel           120 sec.


                 T21             Brite Ni              490 sec.


                 T22         Dura Ni (Strike)          170 sec.
                                        dwell 3 sec.

                 T23
                                  Rinse
                                                       45 sec.
                                  Spray

                 T24
                       a                               5 sec.
                       b   Counterflow Rinses          5 sec.
                       c                               5 sec.


                 T25             Pre-dip               130 sec.


                 T26             Deco Cr               180 sec.

                       a                               35 sec.
                 T27   b
                       c
                            Counterflow Rinses         35 sec.
                                                       35 sec.
            Root Cause Analysis
   Used to establish “cause-and-effect”
   Theory - there is a direct cause for a problem
   Determine the sources of problems
     –   Personnel
     –   Machine
     –   Method
     –   Material
     –   Management
     –   Environment

    Manufacturing                        Waste Management
    Extension                           and Research Center
    Partnership
    Personnel Oriented Problems
 Lack of training
 Manpower availability
 Safety/Industrial hygiene
 Labor Relations




    Manufacturing              Waste Management
    Extension                 and Research Center
    Partnership
    Machine Oriented Problems
 Antiquated Equipment
 Wrong equipment for Application
 Under/over sized equipment
 Worn out equipment




    Manufacturing              Waste Management
    Extension                 and Research Center
    Partnership
    Method Oriented Problems
 Productivity (cycle time) Problems
 Bottlenecks
 Downtime and tool change time
 Wrong SOPs
 Lack of measurement
 Poor paperwork flow
 Delivery problems


 Manufacturing                  Waste Management
 Extension                     and Research Center
 Partnership
          Management Oriented
               Problems
 Increased Costs
 Poor quality of Parts
 Customer relations
 Vendor relations
 Labor relations



    Manufacturing          Waste Management
    Extension             and Research Center
    Partnership
    Material Oriented Problems
 Too many rejected parts
 Excessive cost increases
 Too much waste generation
 Regulatory problems
 Inventory Control Problems
 Energy Efficiency
 Work in Progress

    Manufacturing               Waste Management
    Extension                  and Research Center
    Partnership
           Environment Oriented
                 Problems
 Government Regulations
 Competition
 Transportation Access
 Utility Access




    Manufacturing           Waste Management
    Extension              and Research Center
    Partnership
                             Too Much Oily Wastewater
                                 Is Being Generated


    Vehicles Washed Before Repair             Vehicle is Washed After Repair

                  SOP                                         SOP

     So Mechanic Can See                                   To Make Sure
        Source of Leak                                   Repair is Complete

     So That The Right
     Parts Are Ordered                                   So the Vehicle Can Be
                                                        Fixed Right the First Time
 So the Vehicle Can Be
Fixed Right the First Time




  Manufacturing                                          Waste Management
  Extension                                             and Research Center
  Partnership
                      Electroplating Can’t Keep Up


                               Not enough capacity


          Can’t run 2nd line         Process takes too long


      WWTP can’t handle it               Too many steps

   WWTP not big enough                           Parts don’t get clean
                                           (Buffing compound residue on parts)
Too much waste to treat
                                                     Cleaning process inefficient




      ?
                                        Cleaning process             Buffing compound
                                           inadequate                 hard to remove




                                                                                 Fish
                                                                                 WMRC
                                                           3,140 gal
                             Soak Cleaner
                    T1
                                                           10-12 oz/gal
Electroplating             (Plans for prewash after
                                  stamping)
                                                           180° F, pH 14
                                                           30 day dump
Process
                    T2
                                                      R.O. water rinse
(Materials Study)          Spray Clean Rinse          ambient temp.
                                                      3gpm bleed

                    T3       Electro Clean            3,920 gal. caustic NaOH
                                                      10-12 oz/gal; 170-180° F
                                                      Dumped every 45 days

                    T5     Counterflow Rinse          4.1 gpm

                    T5a
                                                      removes electroclean residue



                    T6        Acid HCL Dip            Etches surface; 10-15% HCl
                                                      dumped every 1-2 weeks


                    T7             Rinse              6 gpm optimum
                                                      runs less


                    T10      Electro Clean            2300 gal.
                                                      dumped every 60 days to T3


                    T12    Counterflow Rinse
                                                      5.4 gpm
                    T12a
                    T13
                                                      1,832 gal
                              Acid HCL Dip            10-15% HCL; dumped every
                                                      2 weeks to acid dump tanks

                    T14    Counterflow Rinse          5.4 gpm
                    T14a
                    T16       Rinse Shuttle           1-3 gpm
                    T17       Semi Brite Ni Plate
Electroplating                             OR

Process             T18       Semi Brite Ni Plate
                                           OR
(Materials Study)   T19       Semi Brite Ni Plate

                    T20
                                                          High sulfur
                                  Tri Ni Nickel           Ni strike
                                                          3:59 cycle; 7,250 gal.


                    T21             Brite Ni              8,700 gal; 4 bays
                                                          pH = 4.0


                    T22
                                                          2,100 gal, Ni bathdeposits
                                Dura Ni (Strike)          particles (non-conductive)
                                                          with Ni
                                                          3-4 sec.; 64,000 pores/in2
                                           dwell 3 sec.

                    T23
                                     Rinse                Not functional; will be used
                                     Spray                to replace dragout & evap.




                    T24
                          a                               5-10 gpm
                          b   Counterflow Rinses          1,300 gal each
                          c


                    T25
                                                          1,832 gal
                                    Pre-dip               chromic - 202 gal. &
                                                          sulfuric - minimal .01oz./gal


                    T26
                                                          2,620 gal
                                    Deco Cr               35-40 oz/gal hex Cr
                                                          sulfuric acid

                          a
                    T27   b
                          c
                               Counterflow Rinses         5.4 gpm
                             Electroplating Can’t Keep Up


                                      Not enough capacity


                 Can’t run 2nd line           Process takes too long


             WWTP can’t handle it                 Too many steps

          WWTP not big enough                             Parts don’t get clean
                                                    (Buffing compound residue on parts)
      Too much waste to treat
                                                              Cleaning process inefficient
    Cleaning & acid     Too much metals
   tanks dumped too
         often              drag out
                                                  Cleaning process            Buffing compound
                          Dwell times over           inadequate                hard to remove
    Tanks become
    contaminated          plating tanks are
                              too short
Cleaning & pickling
    processes                 Not enough capacity
      cause
  contamination
         Identifying Loss Reduction
                Opportunities
 Discuss/challenge sub-causes
 Multi-vote to prioritize problems
 Generate Loss Reduction Opportunities
     –   Brainstorm ideas
     –   Select & implement best solution(s)
     –   Monitor results
     –   If problem persists, implement alternative
         solutions
    Manufacturing                          Waste Management
    Extension                             and Research Center
    Partnership
    Loss Reduction Techniques
            Personnel Oriented Problems
 Improve employee training
 Improve employee participation
 Develop quality circles
 Improve safety conditions
 Improve employee supervision



    Manufacturing                  Waste Management
    Extension                     and Research Center
    Partnership
    Loss Reduction Techniques
            (Machine Oriented Problems)
 Modify existing equipment
 Adopt new processes and technology
 Redesign/reformulate products
 Implement preventative/predictive
  maintenance
 Recycling of by-products and wastes


    Manufacturing                  Waste Management
    Extension                     and Research Center
    Partnership
    Loss Reduction Techniques
             (Method Oriented Problems)
 Improve operating practices
 Improve inventory control
 Improve housekeeping
 Process optimization
 Standardize procedures
 Waste segregation
 Process water reduction
    Manufacturing                  Waste Management
    Extension                     and Research Center
    Partnership
    Loss Reduction Techniques
       (Material Oriented Problems)
 Raw material modification/substitution
 Improved inventory control
 Implement Statistical Process Control (SPC)
  methods
 Process optimization




    Manufacturing                Waste Management
    Extension                   and Research Center
    Partnership
    Loss Reduction Techniques
       (Management Oriented Problems)
 Better planning and scheduling
 Improved cost allocation and accounting
 Implement continuous improvement
  strategies
 Improve communications to employees




    Manufacturing                Waste Management
    Extension                   and Research Center
    Partnership
     Loss Reduction Techniques
          (Environment Oriented Problems)
 Relocate operations
 Develop alternative shipping methods
 Energy Efficiency




    Manufacturing                 Waste Management
    Extension                    and Research Center
    Partnership
                                    Electroplating Can’t Keep Up



                                               Not enough capacity


                       Can’t run 2nd line                  Process takes too long



                WWTP can’t handle it                         Too many steps


            WWTP not big enough                                           Parts don’t get clean
                                                                     (Buffing compound residue on parts)

         Too much waste to treat
                                                                                 Cleaning process inefficient

 Cleaning & acid tanks          Too much metals
   dumped too often                 drag out
                                                               Cleaning process                       Buffing compound
    Tanks become                Dwell times over plating          inadequate                           hard to remove
    contaminated                  tanks are too short


 Cleaning & pickling                Not enough capacity
     processes
cause contamination



            Brainstorm Ideas for Loss Reduction
Personnel Machine Method Material Management Environment
                             Electroplating Can’t Keep Up


                                      Not enough capacity


                 Can’t run 2nd line         Process takes too long


             WWTP can’t handle it               Too many steps

          WWTP not big enough                           Parts don’t get clean
                                                  (Buffing compound residue on parts)
      Too much waste to treat
                                                            Cleaning process inefficient
     Cleaning & acid tanks
       dumped too often
                                               Cleaning process             Buffing compound
  Tanks become contaminated                       inadequate                 hard to remove

Cleaning & pickling processes
    cause contamination
                                                    20% of the solutions solve
                                                    80% of the problems
 Materials Loss Assessments
From Webster’s Dictionary:
 Map - to explore or make a survey of
 Assess - to evaluate or appraise
 Audit - an examination of records or
           accounts to check their accuracy


  Manufacturing                   Waste Management
  Extension                      and Research Center
  Partnership
    Materials Loss Assessments
Aspects of Assessments (Audits)

 Materials Balance-what comes out should
  equal what goes in
 Improved Process Knowledge-better
  general understanding of how the system
  works
    Manufacturing                  Waste Management
    Extension                     and Research Center
    Partnership
    Materials Loss Assessments
Goals and Products of the Assessment

 Accurate Process Map
 Accurate Facility Layout
 Compilation of Inputs and Outputs
 Ideas on How to Improve the Process

    Manufacturing               Waste Management
    Extension                  and Research Center
    Partnership
    Materials Loss Assessments
   Opening Meeting-discuss what you will do

   Walkthrough/Process Examination-do it

   Closing Meeting-discuss what you did and
    future actions

    Manufacturing                 Waste Management
    Extension                    and Research Center
    Partnership
    Materials Loss Assessments
Aspects of the Opening Meeting
   The right people: management, labor, line
    personnel, EH&S
   An initial process map
   An initial plant layout
   Pertinent data and records
   Organization of the visit’s activities

    Manufacturing                       Waste Management
    Extension                          and Research Center
    Partnership
 Materials Loss Assessments
The right people
 Management-authority to act
 Labor
 Shop Supervisor or Area Manager
 EH&S-to ensure regulatory compliance



 Manufacturing                 Waste Management
 Extension                    and Research Center
 Partnership
    Materials Loss Assessments
   Process Map

   Plant Layout

These are not the same thing!! For example:


    Manufacturing                Waste Management
    Extension                   and Research Center
    Partnership
    Materials Loss Assessments
Pertinent Data and Records
   Standard Operating Procedures
   Production Specifications
   Production Logs
   Vendor Information
   Purchasing Records
   Inventories
   MSDS’s
   Manifests, air data, sewer data, TRI data, etc.

    Manufacturing                                      Waste Management
    Extension                                         and Research Center
    Partnership
    Materials Loss Assessments
Organization
   Safety requirements-PPE
   Single or multiple groups
   Who goes where?
   Who does what?
   When and where does the group reassemble?


    Manufacturing                    Waste Management
    Extension                       and Research Center
    Partnership
    Materials Loss Assessments
Walkthrough/Process Examination
   Managing Inventory
   Production Processes
   Operating Practices
   Material Substitution
   Equipment Modification or Substitution
   By-product Concentration, Reuse, and Recycling

    Manufacturing                     Waste Management
    Extension                        and Research Center
    Partnership
    Materials Loss Assessments
Managing Inventory
   “First in First Out” to reduce out of date
   Process and inventory by-products the same as raw
    materials
   Control access to raw materials-pharmacy concept
   Purchase in appropriate quantities and containers
   Continuously evaluate less hazardous substitutes
   Implement Just-in-time delivery

    Manufacturing                            Waste Management
    Extension                               and Research Center
    Partnership
    Materials Loss Assessments
Production Processes and Operating Practices
   Spill/leak prevention
   By-product segregation
   Improved raw material handling
   Preventive and predictive maintenance
   Employee training
   Effective supervision
   Employee participation programs
   Production planning and scheduling
   Cost allocation and accounting
    Manufacturing                            Waste Management
    Extension                               and Research Center
    Partnership
 Materials Loss Assessments
Material Substitution
 Use more efficient raw materials
  e.g. switch to aqueous cleaner
  use dry machining to eliminate waste
      coolant
 More transfer efficient coatings
    (e.g. powder coat)

  Manufacturing                  Waste Management
  Extension                     and Research Center
  Partnership
    Materials Loss Assessments
Equipment Modification/Substitution
   Modification
e.g. New parts racking
     Improved seals-teflon for neoprene
     Better controls-Automated or PLC
   Substitution (new equipment)
e.g. Energy efficient dryer
     FRP tanks for steel
     Phase out obsolete equipment

    Manufacturing                          Waste Management
    Extension                             and Research Center
    Partnership
 Materials Loss Assessments
By-product Concentration/Reuse/Recycling
 Concentration-Membrane Filtration to
  Concentrate Wastes in Aqueous Cleaners
 Reuse- potato starch from rinse water, peels
  for animal feed
 Recycling-cleaning agent recovery from
  aqueous cleaning baths
  Manufacturing                   Waste Management
  Extension                      and Research Center
  Partnership
    Materials Loss Assessments
   Closing Meeting
     –   Break to get organized
     –   Discuss what happened
     –   Correct inaccuracies in maps and data
     –   Generate loss prevention options
             Brainstorm ideas
             Team discussion

   Determine next actions and assign tasks
    Manufacturing                                 Waste Management
    Extension                                    and Research Center
    Partnership
            Keys to a Successful
               Assessment
   Asking Questions
Do you have to dump that coolant every two weeks?-closed
How do you decide when to dump the coolant?-open

Is there any way to reuse this material?-closed
Why does this material become a waste?-open

Have you tried any substitutes?-closed
What substitutes have you tried? How did they work?-open

    Manufacturing                             Waste Management
    Extension                                and Research Center
    Partnership
            Keys to a Successful
               Assessment
Exploring a Process/System
   Ask many questions, even if they seem stupid
   Use other industries as examples
   Generate many ideas
   Do not overlook the obvious
   Look in avoided places
   Look at the big picture
   Examine a variety of information
   Never explore alone


    Manufacturing                                   Waste Management
    Extension                                      and Research Center
    Partnership
     Loss Reduction Opportunities
   Previous modules
     –   Gathered information,
     –   Mapped process,
     –   Found the root cause of the problem,
     –   Assessed the process, and
     –   Brainstormed some solutions
   Present the solutions as a project.
    Manufacturing                         Waste Management
    Extension                            and Research Center
    Partnership
             Material Loss Presentation
   You could report on the project’s -
    –   Expected cost savings
    –   Expected capital expenses
    –   Expected labor costs, and
    –   Expected project results
 Some projects may be sold before you leave, and
 Others will have to be compared financially with
  completing company projects.
        Manufacturing                  Waste Management
        Extension                     and Research Center
        Partnership
    Corporate Priorities for Fund
            Allocation
   1 – Cost Avoidance projects
    – Reduced head count
    – Reduced water usage
   2 - Profit-sustaining projects
    – Equipment maintenance




Manufacturing                         Waste Management
Extension                            and Research Center
Partnership
                   Case-in-Point
   MARWI USA - Bicycle parts manufacturer
    – Problem - Eliminate WWTP operations
          WMRC Presentation -
            – Use Membrane filtration to replace WWTP
            – Save $$$ on WWTP operations & chemicals
            – Save $$$ on parts washer chemicals
    – Plant Manager had one question?
          How will this change increase my production?
            – Not interested!


Manufacturing                                  Waste Management
Extension                                     and Research Center
Partnership
      Right Ladder, Wrong Wall
 Project focus was wrong
 Root Cause of problem - Increase production
 Should have looked at Production Changes
     – Lost time = Labor Dump/Recharge Tank
           8hrs X 26 dumps per year = 208 hours downtime/year
           Production Loss of 250 units per hour

     – Proposed change = Increase of 52,000 units/year

    Manufacturing                            Waste Management
    Extension                               and Research Center
    Partnership
     Competing with Other Projects
 Cost savings alone won’t compete successfully.
 Characteristics of a project that influence project
  acceptance include:
    – Relative advantage of the project work
            Over idea superseded.
    – Compatibility
            With existing company needs, values, and experiences.
    – Complexity
            Perception of the difficulty to understand and use.
    Manufacturing                                 Waste Management
    Extension                                    and Research Center
    Partnership
Competing with Other Projects
 – Trialability
        Degree to which an implemented change can be
         experimented with.
 – Observability
        How visible are the project’s results.




Manufacturing                                 Waste Management
Extension                                    and Research Center
Partnership
                    Building a Better
                     “Projecttrap”?
   Use Membrane filtration to replace WWTP
     – Save $$$ on WWTP operations & chemicals
     – Save $$$ on parts washer chemicals




    Manufacturing                   Waste Management
    Extension                      and Research Center
    Partnership
                    Building a Better
                     “Projecttrap”?
   Membrane Filtration would -
     – Increase production by 5%
            A relative advantage over the WWTP
     – Increase production floor space by 11%
            Compatible with the company’s needs
     – Extend process cleaning bath life
            Complexibility of operation is minimal


    Manufacturing                               Waste Management
    Extension                                  and Research Center
    Partnership
                    Building a Better
                     “Projecttrap”?
     – Offered a pilot test to demonstrate unit
             Ease of operation compared to WWTP
     – Employed plant personnel to run unit
             Hands on experience for familiarity
   Change Agent gains
     – More trust,
     – More credibility, and
     – More success.
    Manufacturing                                Waste Management
    Extension                                   and Research Center
    Partnership
           Total Cost Accounting
   Total Cost Accounting (TCA) is a generic
    term for the long-term, comprehensive
    analysis of the internal costs and savings of
    loss prevention, energy efficiency, and other
    production projects.



    Manufacturing                   Waste Management
    Extension                      and Research Center
    Partnership
           Total Cost Accounting
 TCA in less than 8 hours - Not possible!
 Applying the fundamentals of TCA are possible
 See the whole picture
    – Using all costs and expenses involved




    Manufacturing                       Waste Management
    Extension                          and Research Center
    Partnership
         Total Cost Accounting
   Direct Costs
    – Directly linked with project or process
            Capital Expenses
                –   Equipment and Installation,
                –   Project Engineering,
                –   Utility Connections, and
                –   Buildings.
            Operating and Maintenance
                – Raw Materials,
                – Labor, and
                – Utilities.
Manufacturing                                      Waste Management
Extension                                         and Research Center
Partnership
           Total Cost Accounting
   Hidden (Indirect) Costs
     – Costs “lumped” into general admin. accounts
          Value of lost production,
          Value of rejected parts,

          Lost machine time,

          Insurance, and

          Regulatory permits, costs, and monitoring.




    Manufacturing                              Waste Management
    Extension                                 and Research Center
    Partnership
           Total Cost Accounting
   Contingent Liability Costs
    – Categories
          Accidental Releases
            – Superfund sites and other clean-ups
          Legal damages and settlements
            – Fines and penalties
            – Attorney fees
    – Difficult (if not impossible) to quantify
        Event uncertainty, and
        Costs & frequency difficult to estimate


Manufacturing                                        Waste Management
Extension                                           and Research Center
Partnership
           Total Cost Accounting
   Intangible Cost
     – Even harder to quantify
          Increased sales due to product improvement,
          Improved Corporate Image,

          Customer Acceptance, and

          Community Goodwill.

   ISO 9000 and ISO14001 Certification
     – Improved Corporate Image!
    Manufacturing                             Waste Management
    Extension                                and Research Center
    Partnership
               Total Cost Accounting
   4 projects at Bumpers-R-Us
    –   Evaluate spray cleaning to remove buffing compound.
    –   Evaluate alternative buffing compounds
    –   Evaluate membrane filtration for in-process recycling
    –   Evaluate diffusion dialysis for acid recycling



        Manufacturing                       Waste Management
        Extension                          and Research Center
        Partnership
           Total Cost Accounting
   Estimating Costs and Benefits hierarchically
     – If Direct costs are sufficient to warrant a project
            No estimate required for other categories
     – If Direct Costs are not sufficient, then estimate -
          Hidden costs, then
          Contingent Liability Costs, and finally

          Intangible Costs




    Manufacturing                                Waste Management
    Extension                                   and Research Center
    Partnership
     Loss Reduction Opportunities

   Problem: Cleaning Process Inadequate
   Project Opportunity: Evaluate spray cleaning
    step to remove buffing compound - $1.5 k
   Resources: WMRC parts cleaning lab
   Solution: Install spray washing nozzle on
    stamping line



    Manufacturing                     Waste Management
    Extension                        and Research Center
    Partnership
   Install Spray Washing Nozzle
          on Stamping Line
     $900,000.00
     $750,000.00
                                        Hidden
     $600,000.00                        (includes lost
     $450,000.00                        production and
                                        waste disposal)
     $300,000.00                        Direct (includes
                                        2nd HCl dip, 2nd
     $150,000.00                        rinse, & labor)
                $0.00
                        Direct   TCA
Manufacturing                           Waste Management
Extension                              and Research Center
Partnership
  Install Spray Washing Nozzle on
            Stamping Line
         $15,000.00                                 Consultant
                                                    Maintenance
         $12,000.00                                 Water
                                                    New plumbing
           $9,000.00                                Labor
                                                    Chemicals
           $6,000.00

           $3,000.00

                $0.00
                                                       * Less the cost of
                        Project Costs $14,700.00*
                                                       2nd cleaning process
Manufacturing                                        Waste Management
Extension                                           and Research Center
Partnership
    Install Spray Washing Nozzle on
       Stamping Line - Payback
      Direct Costs              TCA Costs
Process Cost = $136,150   Process Cost = $906,150
Investment = $ 14,700     Investment = $ 14,700
Savings      = $122,650   Savings      = $872,000
Payback = 1.5 months      Payback      = 6 days




   Manufacturing                    Waste Management
   Extension                       and Research Center
   Partnership
    Loss Reduction Opportunities
   Problem: Buffing compound hard to remove
   Project Opportunity: Evaluate alternative
    buffing compounds - $2k
   Resources: Buffing compound vendors & WMRC
    parts cleaning lab
   Solution: Switch to alternative buffing compound



    Manufacturing                      Waste Management
    Extension                         and Research Center
    Partnership
  Switch to Alternative Buffing
           Compound
        $1,000,000.00
         $900,000.00                   Hidden
         $800,000.00                   (includes
         $700,000.00                   decreased
                                       production)
         $600,000.00
         $500,000.00
         $400,000.00                   Direct (includes
                                       buffing
         $300,000.00
                                       compound &
         $200,000.00                   2nd stage
         $100,000.00                   rinse)
                $0.00
                        Direct   TCA
Manufacturing                           Waste Management
Extension                              and Research Center
Partnership
  Switch to Alternative Buffing
    Compound - Payback

      Direct Costs              TCA Costs
Investment = $     0.00   Investment = $    0.00
Savings = $134,070.00     Savings = 1,038,140.00
Payback = Immediately     Payback = Immediately




  Manufacturing                     Waste Management
  Extension                        and Research Center
  Partnership
    Loss Reduction Opportunities
   Problem: Cleaning tanks become contaminated
   Project Opportunity: Evaluate membrane
    filtration technology for in-process recycling - $6k
   Resources: WMRC pilot microfiltration system
   Solution: Implement in-process recycling system




    Manufacturing                         Waste Management
    Extension                            and Research Center
    Partnership
          Implement In-process
            Recycling System
      $950,000.00
      $850,000.00
      $750,000.00                  Hidden (loss
                                   production of
      $650,000.00                  15,000
      $550,000.00                  bumpers)
      $450,000.00                  Direct
      $350,000.00                  (cleaning
                                   chemicals)
      $250,000.00
      $150,000.00
       $50,000.00
                    Direct   TCA
Manufacturing                        Waste Management
Extension                           and Research Center
Partnership
       Implement In-process
         Recycling System
        $90,000.00
        $80,000.00
        $70,000.00
        $60,000.00                   Consultant
        $50,000.00                   Chemicals
        $40,000.00                   Maintenance
        $30,000.00                   Capital
        $20,000.00
        $10,000.00
             $0.00
                     Project Costs
                                         *First year costs
                      $81,420.00*
Manufacturing                         Waste Management
Extension                            and Research Center
Partnership
     Implement In-process Recycling
          System - Payback
       Direct Costs                  TCA Costs
Process Cost = $61,400.00   Process Cost = $831,400.00
Investment = $63,000.00     Investment = $ 63,000.00
Savings     = $42,980.00    Savings      = $812,980.00
Payback     = 1.5 years     Payback      = 28 days




    Manufacturing                     Waste Management
    Extension                        and Research Center
    Partnership
     Loss Reduction Opportunities
   Problem: Acid tanks become contaminated
   Project Opportunity: Evaluate diffusion dialysis
    technology for recycling acid - $4.7k
   Resources: WMRC pilot diffusion dialysis system
   Solution: Implement acid recycling system




    Manufacturing                      Waste Management
    Extension                         and Research Center
    Partnership
       Implement Acid Recycling
          System - Payback

       Direct Costs                   TCA Costs
Process Cost = $258,829.00   Process Cost =$1,028,829.00
Investment = $ 74,700.00     Investment = $74,700.00
Savings      = $181,500.00   Savings      = $1,028,829.00
Payback      = 2 years       Payback      = 9 months


     Manufacturing                      Waste Management
     Extension                         and Research Center
     Partnership
                    TCA Advantages
   Most supportable cost estimates
     – Direct or Operational Costs, and
     – Hidden or Indirect Costs.
   Minimizes time spent on uncertain
    estimates
     – Contingent Liability Costs, and
     – Intangible Costs.
    Manufacturing                          Waste Management
    Extension                             and Research Center
    Partnership
      Process Improvement from a
         Materials Perspective
   Understanding the process
      – Process mapping
      – Root cause analysis
   Assessing the process
      – Team approach
   TCA Concepts
      – Hidden or indirect costs
    Manufacturing                   Waste Management
    Extension                      and Research Center
    Partnership
 Process Improvement from a
    Materials Perspective


                Success!!


Manufacturing                Waste Management
Extension                   and Research Center
Partnership
 Process Improvement from a
    Materials Perspective

          Questions and Answers

      Proposed or Actual Projects


Manufacturing               Waste Management
Extension                  and Research Center
Partnership
Process Improvement from a
   Materials Perspective
 Thank You and have a safe trip home.
                        The WMRC Staff

				
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