June 12, 2003
Any manufacturing process that goes awry can result in waste in many forms, both obvious and hidden. A simple project in which tube is cut, bent, formed, and welded can result in large amounts of wasted money and time if one of the processes goes wrong.
How good are tube fabricators at finding hidden waste? Uncovering and eliminating hidden waste has as much to do with being profitable as any other manufacturing cost. We all know how to quote and define the structured costs involved in a job, but what can we do to take care of waste that continuously creeps into the picture, yet is not accounted for? When we do identify it, how thoroughly do we prevent it from recurring?
To understand how a simple mistake can cause waste to multiply and spread throughout a manufacturing environment, consider a simple incident: An order of tubing is cut to length, bent, end-formed, welded, and inspected. The inspection reveals that the tube was bent 2 degrees out of tolerance. In addition to the obvious waste, both in time and materials, this project has incurred many other forms of waste, many of them hidden:
While it's true that we lump these costs into our overhead cost of doing business, if we took care at the beginning, a high percentage of such waste could have been eliminated. We all know how this affects the hourly burden rates for operation of the company. Continuous improvement in these areas will lead to more profits, better products, and satisfied customers.
In truth, we probably should have had the meeting—the last step in the process—before starting the job. It turns out we didn't have a very good checking fixture that the operators could use with ease to complete inspections as the tubes were processed. We failed to give our operators the proper equipment to prevent this problem.
This is a frustration production personnel often experience.
It is well-known that every time a job is started incorrectly it's going to cost the company money. When we look at the number of people involved, it's easy to see why. Of course, the sooner a problem is caught, the less expensive it is to fix. The cost for tube fabricators generally is higher because of the many operations required to complete a job. The costs are incredible when we really analyze them, and the farther we get down the previous list, the more expensive the job gets. Costs can range from 110 percent to as high as 300 percent to complete a job if it's done wrong the first time, depending on how far into the job we were. Think about what this means to the company. We would have to run that job two more times before it would be profitable.
In addition, the increasing use of more expensive stainless steel and titanium means that the cost of material wasted also will increase, leading to additional expense every time the system fails. Getting rid of some hidden wastes can help prevent these expenses down the road.
How could this incident have been prevented? We simply should have spent a small amount of money on a better checking fixture.
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