Theme: Reducing Scrap in the Machine Shop Background

1. Corporate Goals 2006 -Increase g global market share -Improve quality & service -Increase corporate profits 2. Manufacturing Goals 2006 -Improve reduce cost by 5% -Reduce scrap 15% -Improve productivity 7% -Improve HSE* Index 10%
Overall Scrap % 3% 2% 1% 2004 2005 2006 (YTD) 3.2% Not meeting goal for 2006! 2.7% 2.6% 2.3% 2 3% Goal

Current Condition
Scrap by Department
$K 6 5 4 3 2 1 Machine Shop Scrap % Scrap $$ 200K 86K Welding Assembly Shop Shop Status* 1.5% $40K 0.9% $27K 0.7% $23K 700K Processes:

Breakdown of Machine Shop Scrap Rates

Milling Turning Drilling Rough Grinding 3.7% $150K Final Grinding 8.7% $460K

*Legend:

0-1%

1-2%

2+%

Goal

By December 2006: Reduce scrap in rough grind from 3.7% to less than 2%. Reduce scrap in final grinding from 8.7% to less than 2%.

Root Cause Analysis

Undersized Sh ft Shaft Defect

Man
Contamination Grinding Wheel Set Up Manual offsets Dimensions Hardness Surface finish

Machine
Spindle Clamp & Locator Grinding Wheel Grinding Conditions Coolant Concentration Wheel dressing

72% of grinding defects

Material

Method

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