Mastering Nonconforming Material Management for a Leaner, Meaner Business
Guest writer Sara Hanks offers practical tips on mastering nonconforming material management for a leader, meaner (but nicely!) business.
It is great to be back with another blog post. While the title might suggest that I’m advocating for a “meaner” business, I’m not encouraging cutthroat tactics. Instead, let’s explore how to master nonconforming material management and make your operation leaner and more efficient.
As an operations or quality leader, improving the nonconforming material management process is essential to reduce waste, enhance efficiency, and prevent recurring defects. We’ll delve into three practical steps to accomplish these goals and showcase an example from my personal work experience. Managing the nonconforming material process in a timely manner will avoid costly consequences.
Segregate and review defective parts daily.
Start with establishing a visible area to segregate the defective parts, as this will prevent the defective parts from being used in production or in your service center. Review the parts in the segregated area on a regular basis. Daily reviews are ideal to keep the parts top of mind.
While I was the quality engineer of an electric motor manufacturing company, there was an issue where a part failed due to an electrical issue during the final test. The motor was set aside to make room for production. A day or so later, another similar issue occurred, and a day or so after that an electrical issue occurred with a component that went into the motor. Eventually, we discovered the root cause of the issue – the wire that made the electrical parts that went into the motor had a defect. The defect could pass several tests and go undetected; piles of parts have accumulated. If we reviewed the issue regularly, the root cause would have been discovered sooner, saving a lot of rework costs.
Define ownership and measure cycle time.
There are four major steps to a nonconforming material management process: identify/segregate, disposition the fix, execute the disposition, and verify the completion. Each phase needs an owner. In the execution phase, different teams own the step based on the disposition. For example, scrapped parts or parts that need to be returned to the supplier are managed by materials, whereas parts that require rework should be managed by operations.
Once it is clear who owns which step, measure each step of the process. If the process is managed in an IT system, there are date stamps recorded as parts move through the process. These can be used to create the measurement system. Set goals for each step. If you are not sure what goal to set, try a 10% improvement over an established baseline, which can be determined by measuring the data for 8-12 weeks.
With the electric motor issue, the lack of ownership of each step extended the time to resolve the issue. The purchasing team was responsible to send the motor out to be torn down, however, the parts did not ship for several weeks after the root cause was identified because they weren’t held accountable. The accumulated defective parts sat in inventory – remember these are nearly finished goods, not supplied parts, so the inventory impact was significant. Additionally, the customer order was finite. We left the repairs to the last minute and used overtime to ship the parts on time. Measuring the process by the owner would have prevented the unnecessary cost.
Implement a Continuous Improvement Framework
My favorite continuous improvement framework is the DMAIC process, or Define, Measure, Analyze, Improve, and Control. However, when it comes to continuous improvement for everyone in the organization, the DMAIC process may be too challenging to learn and adopt. A simpler, more accessible framework is the Plan-Do-Check-Act or PDCA framework. Here is a brief overview of the PDCA cycle:
- Plan – identify a problem that needs solving or an opportunity for improvement. Analyze what can be done, establish a goal and identify the steps needed to accomplish the work.
- Do – implement the plan, on a small scale if possible.
- Check – evaluate the results.
- Act – Standardize effective solutions or iterate back through the cycle.
Encourage everyone to participate in PDCA projects. Create a reward system to promote engagement. Rewards can be simple, such as recognition during an all-company meeting, or celebrating with a small party. Company swag is good, especially if employees can wear it during work hours. Buying a jacket or a hat for completing a project is extremely low cost compared to the savings of the project. This approach helps in addressing the root cause of defective parts, which will impact the cost of quality over time.
In the electric motor example, we did identify a corrective action project to prevent a recurrence. In the wire manufacturing process, a preventive maintenance schedule was created to replace components likely to wear on a regular basis. The small cost of changing a roller is minute compared to the larger expense of reworking the finished product. I cannot remember if we celebrated with a pizza party or not, but in hindsight, if we didn’t, we should have!
Take inspiration from my electric motor example, where timely root cause analysis could have saved money and contained the issue. Don’t let nonconforming materials pile up and obscure underlying problems. Instead, tackle them head-on with proactive measures that involve the ENTIRE team. By doing so, you can avoid missed deliveries due to quality issues and foster a culture of continuous improvement.