High Rework Rates in Machinery Manufacturing Plants? 3 Segments to Control Steel Suppliers

There are extremely fatal pain points in machine manufacturing: firstly, the quality of raw materials fluctuates greatly; secondly, the qualification rate after processing is very low; thirdly, the cost of rework has been high! A machine tool manufacturer has been on this head planted a big head: due to the lack of control of steel suppliers, resulting in the hardness of raw materials and toughness indicators in the state of fluctuation, in this way, the parts processing pass rate of only 82%, and rework costs in the proportion of 15%, profits were substantially eaten up! Fortunately, the enterprise quickly took action, from beginning to end of the full cycle of supplier control, only after 6 months to successfully reverse the situation: fluctuations in the quality of steel down 70%, rework costs reduced by 80%! **Xinrui Consulting **Core method of dismantling, the manufacturing industry in the raw material control can be copied directly from this method of operation!

First, the previous predicament: the quality of raw materials out of control, triggering a chain of business crisis

First of all, the main machine tool production machinery manufacturing plant shows that the steel as the core raw material, its quality how to directly determine the accuracy of the machine tool colleagues, but also determines the service life of the machine tool. Secondly, before the enterprise for the supplier only basic qualification check review, completely ignored the process control, eventually triggered a series of operational problems, there:

1. Processing pass rate is in the doldrums: steel hardness, toughness and other key indicators show large fluctuations, which leads to the parts for processing, frequent cracking, deformation and other issues, the pass rate of only 82%, a large number of semi-finished products into the scrap.

Second, rework costs at a high level, rework costs in the production costs accounted for fifteen per cent of the original meagre profits were repeatedly reworked to eat up the profitability of the enterprise has declined significantly.

Rework process occupies a lot of equipment, rework process occupies a lot of manpower, rework process disrupts the normal production schedule, the production line frequently switches state, the overall production efficiency is greatly reduced, resulting in low production efficiency.

4. Delivery risk shows an aggravating trend, non-conforming products for rework, resulting in order delivery cycle is extended, the number of customer complaints increased, and even to face the risk of order default.

At the moment of crisis, the enterprise adjusted its strategy in a decisive manner, focusing on the three core aspects of “before - during - after”, and then launched the supplier quality control upgrade programme.

Second, the core breakthrough: the whole cycle of the three links of control, the quality of the raw materials off

Build a closed-loop control system of enterprises, the core of its raw material quality control lies in the “full-cycle coverage, no dead-end supervision”, and from the three links to start, each step to accurately solve the quality of the pain points.

1. Ex ante: front-loading of standards and clarification of quality red lines

Will not blindly go to procurement, but to go first to establish a clear quality standards, to develop "steel procurement technology standards", to clarify the chemical composition of steel, but also to clarify the mechanical properties of steel, which includes hardness, toughness, and strength, and in addition to clarify the size of the steel tolerance and other core indicators, in order to form a quantitative quality requirements, and at the same time, we must ask the supplier to supply before the At the same time, we must require suppliers to provide third-party authoritative test reports before supply, only the test results meet the standards before entering the supply process, so as to avoid unqualified raw materials from the source into the warehouse.

2. During the event: dual oversight to ensure that standards are in place

To eliminate the single mode of “acceptance inspection on arrival” and to implement the dual supervision of “sampling of batches and flight inspection”.

Batch for sampling, each batch of steel after arrival, randomly selected samples sent to the enterprise laboratory to do a comprehensive testing of various indicators, the test passed before they can be put into use in the warehouse, to eliminate unqualified batches into the production line.

Flight inspections are randomly arranged once or twice a month to conduct unannounced inspections at suppliers' factories, focusing on verifying production processes, as well as the source of raw materials and the testing process to see if they meet the agreed standards, thus ensuring that the supplier controls the quality from the production side.

3. Ex post facto: closing the loop of traceability and forcing quality improvement

Establishment of a sound mechanism for tracing and rectifying quality problems to avoid the recurrence of similar problems:

If problems with the quality of steel are detected during the production process, the traceability process is immediately initiated, the problematic batch is identified, and the supplier and the corresponding production chain are targeted for rapid traceability.

Collaborate with suppliers to carry out collaborative corrective action: hold a quality analysis meeting within 48 hours to identify the causes of the problem and develop a targeted corrective action plan, with clearly defined time limits for corrective action and acceptance criteria.

That is, during the rectification period, to make such a dynamic adjustment, for the supplier's supply batch, to increase the proportion of sampling, the proportion is from the conventional ten per cent to 30 per cent, in addition, for those three consecutive months do not have quality problems of quality suppliers, to reduce the frequency of sampling, in order to enhance the efficiency of cooperation.

4. Clear rewards and penalties: binding the interests of suppliers and strengthening quality awareness

By virtue of the reward and punishment mechanism to reverse prompt suppliers to value quality, for three consecutive months there is no quality problems suppliers, to 5% order incremental incentives, for more than two times in six months the quality of the problem suppliers, immediate suspension of co-operation, ordered to rectify the deadline, rectification does not meet the standard, if the termination of co-operation, so as to build a “good in, bad out” virtuous cycle. In order to build a virtuous cycle of "the best in, the worst out".

III. Effectiveness of control: stable recovery in quality and significant improvement in operating efficiency

After the full-cycle control system has been put in place, after 6 months, the problems in the quality of raw materials have been thoroughly improved, and the business situation of the enterprise has returned to a benign track.

Quality fluctuations have decreased to a great extent, including the magnitude of the steel quality fluctuation condition has decreased by 70%, and the stability of the core indicators has been significantly improved.

The qualified rate of parts processing has soared. The original qualified rate of parts processing was 82%, but now it has increased to 97%, and basically eliminated the problem of batch unqualified.

Cost reductions have been significant, with rework costs reduced by 80 per cent, production costs have been compressed significantly, and corporate profitability has recovered.

The increase in productivity is due to the fact that the production line is no longer subject to frequent adjustments due to rework, which allows the production schedule to move forward in an orderly manner, resulting in an overall increase in productivity of 181 TP3T.

Fourth, business revelations: raw materials control, is the core lifeline of the manufacturing industry

Xinrui's view: In the machinery manufacturing industry, which relies on core raw materials, the quality of raw materials plays a direct role in determining the survival and development of enterprises. Supplier control can not just stay in the “after the fact remediation” stage, but to build a set of full-cycle system, so that the standard beforehand can be front, during the process of supervision, in the aftermath of the implementation of closed-loop rectification, with the help of the quality of synergies with the supplier, the quality of the raw materials from the source can be stable, so as to reduce production losses, and thus improve operational efficiency. This will reduce production losses and improve operational efficiency.