The Soft Cost of In-house Rework
Why it pays to get it right the first time
The easier it is for your team to rework a nonconforming part, the more rework your operation will have. If you want to increase productivity, reduce cost, make your operation more competitive in the market, improve employee morale, improve lot control and create more space on your shop floor, make rework a pariah and make reworking a bad part as difficult as possible.
Why is rework so horrible? The most obvious answer is that at least twice as many direct resources (labor, chemistry, materials, electricity, etc.) are consumed for every part that runs twice. Even if your gross profit margin is as high as 50%, running a part just twice erases your entire profit for that part. This answer, however, is just the tip of the iceberg.
Consider these other costs of rework:
Rework sucks equipment capacity away from new work. Every part that is reworked takes the place on the line of a raw substrate. Reworking a part for one customer or order makes you less able to respond to the needs of another. When rework occurs, lead times suffer.
Running high volumes of rework is demoralizing to good coating line employees.
An employee who takes pride in his or her work knows that when parts are run a second time, his or her time consumed in running them the first time was wasted. Allowing high volumes of rework in your operation sends the message to your employees that their time and efforts are not important.
Every part run on your line, even the first time, is subject to damage. Running parts more than once increases the chance that a substrate will become damaged. The methods used to prepare a part to be reworked (stripping, etc.) further increase the risk that a part could be damaged. The cost of the damaged part must be absorbed indirectly by various segments of the supply chain.
The process of preparing a part for rework adds variables to the finishing process in the form of material left on the substrate and possible changes in the substrate itself. Adding variables to any process adds complexity, which in turn can lead to even more rework.
Processing rework often requires that orders be split up—good parts over here, bad parts over there. When orders are split, lot control often goes out the window, creating the possibility that parts will be included with the wrong order or even mixed with a different part.
Segregating bad parts for rework takes up space, a precious commodity in most coating operations.
I alluded to the solution to rework in the opening paragraph of this column. Take the ability to rework a part away from the people who ran it. In my years of running a metal plating operation I found that the cost of non-conforming parts was much easier to capture on a nickel line (where parts had to be taken somewhere else to be stripped) than it was on a zinc line, where all the line operator had to do was leave a non-conforming part on the line and run it again. When we began to capture just the direct cost of rework (not including the soft costs listed above), we were astounded at the magnitude.
The benefits of moving the ability to rework out of the finishing operation were summarized very well by Mike Wolf, a Production Coordinator with Miller Electric Manufacturing Co. in Appleton, WI.
Wolf agrees that the ability to strip a rejected part in-house blurs the true cost of quality and can even send the message to the shop floor that rework is OK. Requiring rejects to be reworked off-site—thereby giving quality problems the exposure they deserve—forces root causes to the surface and gives them immediate attention. In short, it reduces cost. “Since we have started tracking the costs of outside stripping, our focus has been on root cause and cost.” Wolf said.
To eliminate the soft cost of rework in your operation, move the ability to rework as far away from the production line as possible.