- 11 October 2017
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Let’s talk about cutting your scrap down to zero parts per million — that is, no material wasted during production. Sound like a manufacturer’s pipe dream? It’s not.
Keeping scrap counts as low as possible has always been a challenge, but with today’s manufacturing tools and systems, it’s a realistic goal for industrial manufacturers to aim for zero PPM of scrap. While you probably won’t hit the zero mark every time, you can implement strategies so your plant reduces scrap to negligible levels on a consistent basis.
The success of your strategy relies on making informed, strategic decisions about your production processes. The more information you collect, the better you can implement changes to improve efficiency across every stage of production. An integrated ERP system offers you detailed insight into your processes, allowing you to see where you are producing the most scrap, and why.
Let’s examine how manufacturing company Southco used an ERP system integrated with a manufacturing execution system (MES), to reduce scrap to zero PPM, as well as what other manufacturers can do to achieve similar results.
A Case Study in Zero PPM Scrap
When Southco, a multinational manufacturing company, implemented Epicor’s MES and ERP systems, the two programs enabled managers to make better-informed decisions that reduced the company’s scrap from around 15,000 PPM to an impressive 0 PPM. Not only that: the company was able to raise its overall equipment efficiency (OEE) levels from around 52% all the way to 85%. The improvements in these numbers speak volumes to the power of tools like ERP.
Analyses of data from the MES and ERP identified areas where accuracy and precision could be improved, which in some cases required the purchase of new equipment to meet tighter tolerances and specifications. Because staff could see what was happening at every point in the process and which materials were being used and in what quantities, they could avoid guesswork and focus on improvements with tangible impacts. Thanks to the increased efficiency, the company was even able to retire old machines, opening up extra floor space for a new production line.
The company originally deployed Epicor MES and ERP in its U.K. plant, where it does injection molding. But after seeing the results that came from tracking critical data and gaining visibility throughout production, Southco rolled the systems out in locations around the world, including the U.S.
3 Basics to Reducing Scrap
Manage Inventory Carefully
Scrap material is one of the most obvious forms of waste in production. An advanced ERP system is your tool for gathering insight into where time, money, and physical material is wasted in production processes.
Utilize the data provided by your ERP system to identify processes that can be automated to reduce equipment downtime and human error. Manufacturing companies find that automating inventory management with ERP allows them to better predict customer demand and monitor what exists in their inventory. This ensures you will always have the right materials on hand when you need them, without a wasteful excess
Improve Equipment Efficiency
Using the right tool for the job is monumental in reducing scrap. Computer-driven, precision machinery that can calculate the tightest of tolerances maximizes the use of raw materials — whether that’s a CNC punch that can bend and cut sheet metal, or a laser cutting machine that enables incredible accuracy. The equipment you use directly affects the amount of waste produced. Your ERP system helps you identify which equipment is being used most efficiently, and which machines are producing the most scrap. Investigation into the highest producers of scrap may reveal that a different machine or an upgrade is called for.
Store All Data in a Centralized Location
Improvements count in the office as well, not just on the factory floor. Relying on incorrect documentation causes errors that ripple and grow across your organization, disrupting everything from material sourcing to delivering a final product. Whether cloud-based or not, ERP allows you to move from manually documented paper trails to a centralized system for storing and communicating your information.
The key benefit of ERP is that it connects to every aspect of your business — from production and inventory management to client communication and scrap material tracking — giving you a wealth of ongoing data that allows you to shape your operations as efficiently as possible. Reducing scrap is one of the many efficiencies that ERP can help an organization realize.