Speaking of Precision Blog

Speaking of Precision

Speaking of Precision is a knowledge preservation and thought leadership blog covering the precision machining industry, its materials and services. With over 36 years of hands on experience in steelmaking, manufacturing, quality, and management, Miles Free (Milo) Director of Industry Research and Technology at PMPA helps answer "How?" "With what?" and occasionally "Really?"

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Reducing Variation: Only Way To Reduce Cost

Posted August 23, 2011 9:05 AM by Milo

Hidden variation is what increases your costs. Permanently eliminating the causes of variation is the only way to truly reduce your costs.

Been there? Done that? Get the T-Shirt!

The goal of management is to achieve certain objectives. The way of smart managers is to intelligently manage risk. The means of intelligently managing risk is through reduction in variation in the processes in your control.

Variation increases your costs. Think about a chucker with a worker loading and unloading it. The greater the variation of time of the worker, the fewer parts will be produced at the end of the shift. The closer that the worker's 'cycle time' matches that of the machine, the greater number of parts at the end of the shift.

Variation affects more than just direct costs. Variation in yield can affect order patterns and thus scheduling. Variation in scheduling affects lead times, thus causing order quantities and frequencies to vary. Variability in quality, yield, scheduling and releases all cause more variability which causes risk to all parties to increase. Eliminating variability is the key to reducing risk and reducing the complexity of all the issues that we have to manage in our businesses. Here are 4 tips for reducing variability in your operations:

  • Standardize materials and sourcing,
  • Standardize work,
  • Standardize gaging,
  • Do not be seduced by 'Low cost' or 'Magic Solutions,'

Standardize materials and sourcing was the first lesson that I documented as a Quality Manager in the steel industry. Our VP of Purchasing was convinced that he could chase low prices to get profitability. However those low prices brought us non conforming material, huge in process rejections, and suspicion about the status of material that passed inspection. Not to mention short or late deliveries, or heroics to expedite replacement material, which increased costs. Failure to standardize sourcing exposes your processes to the full range of global variation. Lock in on a supplier and reduce your variation, risk, and costs.

Standardize work to reduce in process variation. I was involved in an investigation at an automotive supplier who blamed the steel for 'poor machinability.' This was truckload, round the clock, running on multiple machines business. And the fact that our steel ran above rate on five of the machines was conveniently ignored by the customer, who was fixated on the four machines that were running below plan. A quick look at control charts, tool replacement records and drill grinds on the four underperforming machines vs. the ones achieving plan showed major differences- variations that cost the customer a production shortfall on four machines times three shifts. It wasn't the Steel!

Standardize gaging. Actually this is a subset of standardize work. Let's go back to that chucker job. If there are multiple ways to gage the part on the bench- say an assortment of mikes and calipers- the decision over which to use could cost the operator a second or two with each part to be gaged. That means fewer parts per shift. Increasing cost per part.

Do not be seduced by 'Low cost' or 'Magic Solutions.' Remember consistency is the goal. How does throwing more variation into your operations improve consistency? Alternative materials, tools , or methods should be proven by testing before being adopted in the shop. Failure to control the self inflicted variability of 'New,' 'Cheaper,' or 'Magic' improvements have increased shops costs far more than the routine normal variability of your existing source. Careful experiments can be an important way to discover better processes, but reckless adoption of unproven inputs will assure increased variation, increased costs, and missed deliveries.

Variation is a synonym for risk, increased cost, missed deliveries, and loss of customer confidence. Variation can require you or your customer to increase order quantities, increase order frequencies, only to dramatically cause orders to be cancelled. How do you intelligently manage risk? By intelligently reducing variation.

P.S. You can buy the T-Shirt at Zazzle (Photo credit)

Editor's Note: CR4 would like to thank Milo for sharing this blog entry, which originally appeared here.

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#1

Re: Reducing Variation: Only Way To Reduce Cost

08/23/2011 12:03 PM

This is a great list Milo. On the gauging, I would add "verify capability." I have had a couple of projects where it became painfully obvious that we were using our process to check on our gauges instead of the other way around (like a product with viscosity tolerances of 13 +/- 0.3 Cps being measured by a gauge with a standard deviation of +/- 1.1 Cps or a visual inspection process where operators became measurably more critical after finding visual flaws on 5 or more parts in a row).

On the first project, I bought us an extra 1.5 hours of productivity per shift by eliminating double measurements of viscosity that were triggered by a first measure failing. On the second project, I was able to to cut scrap rates in half (with zero increase in customer complaints) by instituting a monthly reminder time (0.5 hours) for inspectors about what defects really look like and about "re-centering" their defect detectors after they encountered a particularly nasty string of visual flaws.

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Re: Reducing Variation: Only Way To Reduce Cost

08/23/2011 3:16 PM

Thanks for sharing your experience.

As you might imagine I share your passion for using process capability information.

That recentering reminder was a good one.

Thanks!

Milo

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#3

Re: Reducing Variation: Only Way To Reduce Cost

08/24/2011 2:57 AM

Great compilation.

Thank you.

One problem remaining is rarely occurring insufficient material quality. I had carbide particles (0.1 to 0.5mm) in Al 7075, nobody could explain why and from where. The tools for the first rough cuts survived but the diamond tools for final cuts did not survive.

The material came from a qualified supplier but this one batch was really bad.

RHABE

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Re: Reducing Variation: Only Way To Reduce Cost

08/24/2011 9:45 AM

I'm not an aluminum guy so I'll not contribute much to the"where'd the carbide come from? question BUT in my experience at the mill(s) those kind of anomalies can occurr in three ways, two of which are deliberate:

1) Experimental batch that is released as commercial material (We used to code "trial" batches at Mill A; When I became head of quality at their customer Mill B, I reviewed their claim history and found a preponderance of "trial " heats involved Changed our spec to forbid trial heats and ourclaim performance immediately improved.

2) Yield improvement programs Trying to increase rolling mill yield by reducing the amount of end crop etc. can result in a lot of "less prime" material being included in final product.

These two are result of deliberate choices made by management.

3) Loss of process control in the process- this can be either by lack of knowledge that it ocurred (Mold level control stopped for a period of time allowing non metallics to entrain in caster is one example) or deliberately inflicted on the customer (we don't have time or money to UT sample or Metallurgically sample all those billets so we'll just ship em and see what happens...)

Thanks for your comment!

Milo

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#5

Re: Reducing Variation: Only Way To Reduce Cost

08/26/2011 2:43 AM

Just to be contrarian, I will suggest that increasing variation is likely to reduce costs (after all, QC does cost money), but will also reduce quality, and ultimately reduce sales.

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Re: Reducing Variation: Only Way To Reduce Cost

08/26/2011 10:25 AM

Reducing variation by buying cheap can reduce immediate cash outlays in the short term ( so the Purchasing agent gets his bonus) butthen the cost of all that variation - increased cycle times, increased downtimes, customer recalls etc. will actually exceed those savings over the long term.

Thanks for the contrarian issue to discuss.

Milo

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#7

Re: Reducing Variation: Only Way To Reduce Cost

05/01/2013 5:21 AM

Great info for all, as usual. Regarding gaging parts on station, it's real money being spent in shops that don't invest a bit of planning and fabrication to be able to jig gage parts that they commonly make any time they don't absolutely have to have mike/caliper. Making auto parts, we'd do our lot QA in far less time overall, as well as being able to gage more parts than required during the all important warmup for a run. A jig for auto or air has to be certified, but you do that when you certify the die set and the test batch. What's also great about jig gages is that their operation can be easily timed. You gotta admit there are a lot of employees that seem to operate mikes very slowly and many times, trying to find some mystical thing apparently. A well made jig either operates or doesn't and is checked with it's own attached template part at tooling setup.

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