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Tuesday, March 5, 2013

Rework Hampers Root Cause Analysis and Improvement

As a customer, you know how you feel when a supplier lets you down by giving you poor service or by failing to deliver the right quantity and quality product at the right time. When the shoe is on the other foot and you are the supplier we see it different.  These situations usually mean that your system has broken down and you need to initiate some form of corrective action, rework, to try to recover the situation.

Nearly every business has some level of ongoing rework. Most product-based businesses have some form of rework when they don’t satisfy the customer with their first effort. It may be that you can’t supply the complete order in one lot, or the quality of the product does not meet the customers’ needs. In service businesses, rework can occur when the customer is not happy with the service and some form of corrective work or follow up is required by the management team. 

Scrap and rework costs are a manufacturing reality impacting organizations across all industries and product lines. No matter why scrap and rework occurs, its impact on an organization is always the same—wasted time and money. Activities that reduce the quality or efficiency of a manufacturing operation or business process, but are not initially known to managers or others seeking to improve the process are referred to as “The Hidden Factory.” Most organizations have some form of a Hidden Factory.

Often, the corrective work occurs so frequently that the management team accepts rework as a normal part of business. This is a very dangerous interpretation of rework as it can hide many problems that should be made to stand out. A close examination of each and every cause for rework can provide improvement opportunities that can really lift business performance.

Instead of trying to fix the rework process (which is Muda), determine the root causes of needing rework/repair and fix those. If priority is given to evaluating and improving your manufacturing processes, it becomes much easier to reduce the amount of scrap and rework in your organization. Remember, Lean is about zero defects.

The first step to understand the size of your rework problem is to set up a monitoring system that will capture the data, including what happened and the reasons why. Building a system to record each individual rework event will establish baseline data that will enable you to assess future progress as your team works to eliminate rework.  This data is also valuable as you can use it to start to understand just how much money is being consumed by the rework process.  It is often surprising to realize the total cost of the hidden factory, but this can provide the strong motivation to attack the causes of rework.

To maintain a competitive edge, manufacturers must constantly find ways to cut costs and improve efficiency. One way companies can save time and money is by preventing scrap and rework. Correcting your systems by finding and eliminating the root causes of rework will result in a much smoother workflow where good days become normal.

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1 comment:

  1. Hi Tim. Once the data is collected, and you've got the relevant cross parties (the ones contributing to your rework problem) together in a room, what's your advice as to the APPROACH to take when they're all together