Rejection / Wastage
During our implementation for Auto components Manufacturer, the customer had realised that their rejection percent in the components in high and the rejected components must be molten and enters the production process as raw materials.
The challenges were the production process is carried out by different teams and different machineries and the rejection level, it was nearly impossible to identify the cause of the rejection and the relevant data for the rejection to take the corrective measures.
The Impact of Rejection
The rejection had a strong impact on the profitability. The rejection happened at various stages of production process, at 1st Stage (30 % completion) ,2nd Stage ( 40% completion),3rd Stage (60 % Completion) and 4rth Stage (90% Completion) . There was lot of cost associated like Machine time, Labour associated with each rejected product and it impacted the profitability. It also impacted the honouring of customer contracts as the productivity was low due to rejections.
Solution and effectiveness
As part of the implementation, we identified the points of rejection and introduced transfer of quantities and Quality check process. Whenever there is a transfer, the rejected quantity was sent to the rejection warehouse from the respective teams. Also, when the rejected quantity was sent the team also had to enter the reason. Based on the inputs, we automated a report which will show the following
|Date||Department||Rejection Reason||Quantity in Tonnes||Associated Costs||Normal / Abnormal|
With this report, the team was able to self assess themselves and reduce the reduction % drastically. Also the machinery wherever needed was changed. Also process improvements, which will help in reduction was also introduced.