Why You Need a Manufacturing Software Tool to Manage Scrap

We’ve talked about waste in your manufacturing facility stemming from misconnected or even unconnected people, processes, materials, and job information. These are problems that are exceptionally difficult to solve; there are so many pieces to the puzzle and all of it is moving constantly. However, these are sometimes the easiest problems for a manufacturing software tool to solve. This can be because they are more obvious – they touch everything – or perhaps because changing one area can have a cascading effect elsewhere.

We’ll move on to a more difficult issue – one that’s prominent, easier to spot, and tracked on your bottom line. In one word, SCRAP.   Scrap is something that your finance team will actually track. This is mostly so they can take a write-off on the materials. What’s missing from that calculation is the lost manpower to produce it twice – wrongly the first time and then again to do it right and get it to the customer.  If you’re like any of the manufacturers that we work with, you don’t have that money to spend, and it's monumentally difficult to claw back from the customer later or from other jobs.

Production control for your process

Scrap can be viewed as something that just happens in manufacturing. Things go wrong. Jobs go wrong. Scrap is the result and manufacturers will often accept a certain scrap rate as the cost of doing business.

We mentioned that scrap cost is often difficult or impossible to recover. All of your competitors are bidding on the same jobs and if you build in a cushion to account for scrap, you may lose the work to them. If you’re losing money on one job with scrap, you’re likely doing it across them all. Doing more of something doesn’t solve the issue; only changing what you’re doing will accomplish that. Changing your process, whether it’s production, sourcing, scheduling, or something else, is the only way to drive down scrap.

Why manufacturing with paper job packets does not work

A paper packet is not ever really guaranteed of being correct. Paper inherently has its challenges – pulling a wrong file can start a cascade of issues on your shop floor. Mere access to Microsoft files on the network means your team could accidentally pull an old copy – a challenge that no filing or naming system can ever permanently solve. Can you really ensure that your team has the right information available and as planned?

Let’s assume you have provided them with the right information. How’s it making it through the paces of production? I’ve been on many shop floors and I can tell you from experience that what I've seen is old, smudged packets, papers taped on the side of random objects, papers next to bins of work. I’ve seen sticky notes, magnets, and even chalked instructions. I’ve seen paper packets burned in ovens to ash and parts lying in aisles because no one knew what they were or where they went next. I’ve opened binders of instructions that didn’t match the work being done. It all happens when you don’t have a system that controls the information.

The use of paper in the shop might be one of the heaviest causes of scrap. It’s tough to do the job right if you don’t know what you’re supposed to do; even more difficult if you usually do something one way and you’re supposed to change that up for a customer request or because the material wasn’t available. Paper isn’t flexible to the work or the issues that are going on as you produce your product. And if there’s one thing you need in manufacturing, it’s flexibility.

Why an ERP can't handle it 

Almost every ERP and even some smaller front-office finance packages can provide a routing and a list of work to be done. Some can do this in a proscribed order. All fall short of the dynamic, rules-based schedule you need to do your work. The schedule that you set in the morning before the huddle or at the beginning of the week when you process orders is never the one that actually hits the shop. If something can go wrong, it will. And something always does go wrong.

An ERP can list a BOM. The vendor may have even worked with you to have your operators clock on and off jobs so that you can mark things “done” on the route. It will not give you the ability to lock what they see or do while keeping your options open for routing and re-routing work. So the minute your team member finishes their current work, you are at their mercy to ensure that they do the next thing you want or need them to do. Perhaps you could go so far as to say that the ERP handles your first shift breakfast work but not through lunch.

Selling more of the same product without solving the issue is trying to make up in volume what you’re losing on one job. It’s nonsense. Even Benjamin Franklin was known to say “beware of small expenses; a small leak will sink a great ship.”

What you need for a manufacturing production schedule

A manufacturing production schedule is a time-based, complicated series of dance steps to complete one or more pieces of work in the standard way you always do or adjusted for the complex nature of what your customers demand of you. You will need an understanding of the work to be done, complete knowledge of what’s in process at the moment, an awareness of when all that work will be finalized, and what your next steps should be.

It would also be helpful if the tool could predict work into the future and the time that it will take based on prior history. All of this said we want you to consider a schedule that moves and shifts with you, not against. One that accounts for people “in the room” as well as the maximum schedulable time for each.

We’ve started the discussion here, but we’ll dig into the various issues we see, what’s causing them and what you can do to stop them. We’ll go through almost 20 areas before we end this series on how to buy a system. These pieces should serve as a step-by-step guide to get you there.

Ready to move forward faster? Engage with us to talk about assessing or mapping your systems and processes.  We’re only an email away, info@cimx.com.  

Contact CIMx Software to see how paperless manufacturing can reduce scrap for you.