Reduce Scrap Rate and Labor Efficiency Loss
The company wanted to reduce the scrap rate to 10,000 parts per million (ppm) and completely eliminate the additional labor costs that were being incurred due to inefficiency.
Working with Juran, this medical device manufacturer implemented Six Sigma, a systematic approach and data-driven methodology to reduce product and process defects and variation. This organization’s goal was to save an estimated $345,000 per year.
By reducing scrap, $130,000 per year would be saved. Increasing labor efficiency would add an additional $4,000 per week, totaling labor savings of $200,000 per year. A more stable output would provide more predictable employee scheduling, saving a further $15,000 in overtime premiums per year
This manufacturing company was able to meet their labor efficiency goal after only 3 months of working with Juran. The scrap reduction goal of 10,000 ppm was met after 5 months. $174,096 was saved in scrap, $205,000 in labor costs, and $34,560 in overtime pay.
Transform Your Business
Get in touch with us for more information on how we can help your organization attain sustainable results, and start your journey towards world class quality.