Tag: Scrap

LEAN Environment: Waste Management and OEE


To understand the real implications of waste, we need to extend the impact outside of the manufacturing environment, beyond the factory walls.

Consider the cost of non-quality.  Scrap and rework costs are readily calculated since we know how much we pay for labour and materials.  However, we rarely consider the outside costs and potential impact to our environment.  This raises more questions than answers as these costs are beyond our realm of expertise and control.

What is the real cost of a scrap part?  How many trucks are on the road today carrying material to replace products that should have been made right the first time?  How much extra labour is incurred through the value stream to replace this material? 

What are the disposal costs associated with scrap material?  Can it be recycled?  What are the costs of recycling and what is the impact to the environment?  It is one thing to recycle products after they have served their useful purpose, but what about the costs incurred to recycle products that were simply defective and never made it to market?

How much energy and resources are wasted simply because capacity is burdened by inefficiencies in our manufacturing operations?  The costs of working overtime to manufacture parts due to “lost time” during the regular work week or to recover quality losses due to rework and scrap all have an impact on the environment.

How many employees are driving their cars to work overtime that could have been avoided or prevented?  What is the cost to work a shift of overtime at your company?  What is the cost to the environment?  How many cars made the trip to the plant burning fuel unnecessarily because of our inherent manufacturing inefficiencies and waste?

How much money is spent paying for trips to customers to replace defective material or to justify the reasons for failure?  How much expedited freight is incurred due to quality, process inefficiency, or capacity mismanagement?

We have identified many questions that should have some bearing on our social responsibilities as manufacturers or providers of goods and services.  The value stream of your products and services has an impact on the environment beyond your factory walls and affect the environments of communities around the globe.

The next time you scrap a part that was originally made offshore; consider the effort required to deliver it to your factory floor.  The implications of transporting products around the globe can’t help but stress the need to use them wisely.

Where does OEE fit into all of this?  If 100% OEE is the Ideal, then anything less is the opportunity to eliminate waste.  When we look at our operations and the problems we encounter on a daily basis we are reminded to: See, Solve, Share, and Start again.

Until Next Time – STAY Lean!