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DMAIC FOR SCRAP REDUCTION

Technical Report · July 2019

DOI: 10.13140/RG.2.2.20734.64325

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 DMAIC FOR SCRAP REDUCTION 2019

QESS PROJECT: REDUCTION IN SCRAP GENERATION

IN PANEL MANUFACTURING COMPANY.
 DMAIC FOR SCRAP REDUCTION 2019
INTRODUCTION
As a problem solving methodology or process improvement framework, Six Sigma makes use of
a series of well-defined steps. This includes definition of the problem (D), measurement (M) of
the problem, data analysis (A) to discover the root causes of the problem, improvement (I) of
processes to remove the root causes of defects and controlling (C) or monitoring processes to
prevent the problem [1]. DMAIC methodology defines lines of strategy and orientation in Six
Sigma projects [2]. The DMAIC methodology is a disciplined approach and well-structured, that
provides a lot of advantages, which includes the study and analysis of the problem, and the
search for the solution [3]. The Six Sigma methodology was initially implemented in
manufacturing industry and in manufacturing processes. The use of the methodology has been
extended to non-manufacturing processes and services such as financial services, health,
education, logistic, human resources, security, customer’s relationship and innovation [4]. For
both processes, manufacturing and non-manufacturing, the Six Sigma plays a role in seeking
continuous improvement and decreasing the number of defects.

PROBLEM DEFINITION
The camming and punching operation is selected for the scrap reduction based on scrap value.
The selected operations generate 12% scrap of the total revenue. The main contribution of
scrap is from 3 major avenues i.e from plate utilization, wrong sheet selection and wrong tool
usage. The products cannot be reworked due to high quality requirements of customer. The
scrap value creates more loss to revenue that the accepted value. The aim of the study is stated
as “To reduce scrap rate from 12% to less than 8% on camming and punching operations using
DMAIC approach”.
*Industry standards for scrap is 5% (Source: Business Insider)

METHODOLOGY
 Literature study on scrap generation on similar studies made to understand DMAIC
approach for problem solving by referring books, journals, quality system manuals and
related documents.
 Collected scrap data and identified areas of improvement using QC tools like Pareto
analyses, Process Mapping, SIPOC etc.
 Studied capability of current process by analysis.
 Analyzed the current process and operating procedures to identify root cause for scrap
generation using various six sigma tools like brainstorming, cause and affect matrix.
 Implementation of viable solution/s by forming across functional team. .
 Benefits through the study are validated and documents are modified with necessary
changes for controlling the identified problem.

A. DEFINE PHASE - Process flow for the fabrication of panels (Camming & Punching) in manufacturing
company. Process flow below shows the process with inputs and outputs involved in scope.
 DMAIC FOR SCRAP REDUCTION 2019

The above flowchart is divided into two parts i.e a) Camming of the sheet & b) Punching of the
sheet.
a) Camming has basic activities wherein the design input is received from the customer. Once
this is received  camming feasibility is checked by the camming engineer Once this is
done, Camming sheet is made where in all the parts are laid on the sheet for minimum
wastage  The cammed sheet is sent to the machine for punching.
b) Punching activity is the second part where in the camming sheet received is sent to the
machine  Tools and the sheet is checked by the operator  Punching of the sheets starts
Once this is complete parts are checked for the defects and cleaned  This is then sent
into the inventory.
 DMAIC FOR SCRAP REDUCTION 2019
SIPOC DIAGRAM
SIPOC Diagram, which is a tool frequently used in Six Sigma project to describe all relevant elements of
the process to be improved

SUPPLIER INPUT PROCESS OUTPUT CUSTOMER

sheet vendor sheet sizes camming of the sheets finished parts QA department
camming
customer drawings drawing punching of the sheets Scrap sheet Bending Department
purchase department remnant sheet Stores
Stores department

B) MEASURE PHASE: Process analysis to identify the areas of waste generation

The main purpose of the measure stage is the focus your improvement effort by gathering the proper
Information or data that is being produced in the process. During the process it is important to know
how much to measure, making sure that enough data is being collected while not taking too much time
collecting unnecessary amounts. The major outputs that should result from this stage include data that
pinpoints where the problem occurs and how often, baseline data that shows how well the process is
and understanding of how the current process operates, and a more focused problem statement.

TABLE – B.1
Sheet Total
Industry
Day Usage Scrap Generated (In ton) scrap %
Standard
Wrong Wrong Scrap
%
(In ton) Utilization Sheet tool others (in ton)
1 51 5.00 0.50 0.20 0 5.70 11.18 5
2 51 5.20 0.00 0.00 0 5.20 10.20 5
3 54 5.80 0.20 0.20 0 6.20 11.48 5
4 52 4.80 0.40 0.10 0 5.30 10.19 5
5 51 5.30 0.20 0.15 0 5.65 11.08 5
6 51 5.50 0.10 0.20 0 5.80 11.37 5
7 54 5.40 0.20 0.10 0 5.70 10.56 5
8 52 5.60 0.40 0.30 0 6.30 12.12 5
9 51 5.58 1.00 0.30 0 6.88 13.49 5
10 54 5.64 0.30 0.20 0 6.14 11.37 5
11 55 5.70 0.51 0.10 0 6.31 11.47 5
12 51 5.75 0.55 0.30 0.05 6.65 13.04 5
13 50 5.81 0.58 0.10 0 6.49 12.98 5
14 51 5.87 0.61 0.15 0 6.63 13.00 5
15 52 5.93 0.20 0.20 0 6.33 12.16 5
16 54 5.98 0.40 0.10 0 6.48 12.00 5
17 53 5.00 0.20 0.30 0 5.50 10.38 5
 DMAIC FOR SCRAP REDUCTION 2019
18 51 5.20 0.10 0.20 0.05 5.55 10.88 5
19 52 5.80 0.20 0.10 0 6.10 11.73 5
20 51 4.80 0.40 0.15 0 5.35 10.49 5
21 51 5.30 1.00 0.20 0 6.50 12.75 5
22 51 5.50 0.30 0.10 0 5.90 11.57 5
23 54 5.56 0.51 0.30 0 6.37 11.80 5
24 52 5.57 0.55 0.10 0 6.21 11.95 5
25 53 5.58 0.58 0.10 0 6.26 11.80 5
26 51 5.58 0.61 0.10 0 6.30 12.35 5
Average 11.67
From the above table we can see that the scrap generated by the process is at an average of
11.67% in comparison to industry average of mere 5%

MAJOR AREAS OF SCRAP GENERATION

From the above bar chart we can see that the majority of the scrap generation is through improper
utilization of the sheet (Plate), Wrong sheet usage & lastly wrong tool usage.
 DMAIC FOR SCRAP REDUCTION 2019
PARETO ANALYSIS OF THE SCRAP GENERATED

This Pareto chart highlights the major issues that the organization should focus on to reduce scrap. For
example, targeting first issue would automatically take care of ~80% scrap.

COMPARISON OF CURRENT SCRAP GENERATION WITH INDUSTRY STANDARD

Current Scrap % = 11.67%

Industry Standard % = 5%

From the above we can see that the scrap generated is on the higher side as industry standards is mere
5% to the current organizations which is 11.67%
 DMAIC FOR SCRAP REDUCTION 2019
Operation Areas of improvement From To
Camming Scrap Reduction through 142.74 Ton 95.65 Ton
plate utilization
Punching Wrong Sheet Usage 10.61 Ton 3.50 Ton
Punching Wrong Tool usage 4.35 Ton 1.43 Ton

C) ANALYSE PHASE:

The analysis stage is the most important element to the DMAIC. The overall goal of this stage is to
determine and validate the root causation of our original problem. If the analysis process is not
performed correctly the proper solutions will not be generated and the problem will persist. The way in
which the process should flow begins with the defined problem statement that was created in the
previous stage. The process then moves to the potential causes that may be hindering the performance
of the areas in the process that are now being examined. The next step is to organize these potential
causes using tools such as fishbone diagrams. Finally, we should take the data collected in the previous
stage and, using statistical tools, quantify a cause and effect relationship.

FMEA ANALYSIS
 DMAIC FOR SCRAP REDUCTION 2019

FISH BONE DIAGRAM

WHY? WHY ?ANALYSIS

i) Lack of knowledge
Why? Lack of training
Why? No training plans
Why? No intiatve for improvement

ii) Manual process

Why? Machine not compatible
Why? old machine

iii) No software upgrade

Why? High cost to upgrade
Why? Old machine

iv) Standard size of sheet

Why? Only size available in the market with in the cost

From the above we understand that the hidden issues that are associated with the main causes. This has
to be done as a brainstorming activity with all the stake holders.
 DMAIC FOR SCRAP REDUCTION 2019

D) IMPROVE STAGE:
Based on the analysis from the previous steps, the main causes of the scrap reduction are being
highlighted as particularly as follows:
a) Old Machine i.e manual
b) No trainings

To improve the process following steps were taken

a) For Old machine : For the machine, new software package +new sensory was procured which
had better capability for reducing the scrap generation and gives a visual aid for the camming
expert to have a view at the sheet.

Scrap Generated - 6 Monthly Data

Month Scrap Generated Cost/ton (RM) Total
FEB 15400 ₹ 42.00 ₹ 6,46,800
MAR 14800 ₹ 42.00 ₹ 6,21,600
MAR 13200 ₹ 42.00 ₹ 5,54,400
APR 15500 ₹ 42.00 ₹ 6,51,000
MAY 14000 ₹ 42.00 ₹ 5,88,000
JUN 15780 ₹ 42.00 ₹ 6,62,760
TOTAL ₹ 37,24,560

Cost of the sensory system + software update = Rs. 65,00,000 /-

Break even reached in 15 months.

b) Training schedule set for every 3 months – refresher course

c) Excess sheet size data started and kept on the drive for easy access
New process: Design Input  Check sheet size in the storage  Start Camming

E) CONTROL PHASE
With the introduction of the improvements data is measured and analyzed for a month.

TABLE: E.1
After new process + new machine introduction + T&D
Sheet Usage Scrap Generated (In ton.) Total scrap %
Day (In ton.) Utilization Wrong Sheet Wrong tool others (in ton.) Scrap
1 51 3.35 0.34 0.13 0 3.82 7.49
2 51 3.48 0.00 0.00 0 3.48 6.83
3 54 3.89 0.13 0.13 0 4.15 7.69
4 52 3.22 0.27 0.07 0 3.55 6.83
5 51 3.55 0.13 0.10 0 3.79 7.42
6 51 3.69 0.07 0.13 0 3.89 7.62
View publication stats

DMAIC FOR SCRAP REDUCTION 2019

7 54 3.62 0.13 0.07 0 3.82 7.07
8 52 3.75 0.27 0.20 0 4.22 8.12
9 51 3.74 0.67 0.20 0 4.61 9.04
10 54 3.78 0.20 0.13 0 4.11 7.62
11 55 3.82 0.34 0.07 0 4.23 7.69
12 51 3.85 0.37 0.20 0 4.42 8.67
13 50 3.89 0.39 0.07 0 4.35 8.70
14 51 3.93 0.41 0.10 0 4.44 8.71
15 52 3.97 0.13 0.13 0 4.24 8.15
16 54 4.01 0.27 0.07 0 4.34 8.04
17 53 3.35 0.13 0.20 0 3.69 6.95
18 51 3.48 0.07 0.13 0 3.69 7.23
19 52 3.89 0.13 0.07 0 4.09 7.86
20 51 3.22 0.27 0.10 0 3.58 7.03
21 51 3.55 0.67 0.13 0 4.36 8.54
22 51 3.69 0.20 0.07 0 3.95 7.75
23 54 3.73 0.34 0.20 0 4.27 7.91
24 52 3.73 0.37 0.07 0 4.16 8.01
25 53 3.74 0.39 0.07 0 4.19 7.91
26 51 3.74 0.41 0.07 0 4.22 8.27
AVG SCRAP 7.81
The scrap was reduced from 11.71% (ref. Table B.1) to 7.81 %

As, a process the HOD’s view the weekly data to check if the process is as per the set limits.

RESULTS:
According to the improvements in the request process, visible results were obtained.

A. Impact on Customer
The process helped reduced wastage and issues reducing the lead time for the customer
B. Cost of lost opportunity
The cost associated with scrap generated was high; since the scrap generation has reduced it has helped
in better working capital
C. Impact on efficiency.
The efficiency of the operations has increased with great transparency.

CONCLUSION
The six sigma methodology had a positive impact on the process overall and helped in reduction of the
total scrap generation. It identified the key problems the organization faced and what areas needed the
desired attention. It has also shown that trainings and development are the important aspects of the
organization. In resume, it can be stated that the objectives that led to the realization of this project
have been achieved. An efficient way to reduce scrap has been identified.