The cost avoidance for this problem exceeded $700,000 on an
annual basis.
Description of Problem
Customer requirements were severe with respect to this item and often resulted in rejections, which translated directly into return dollars if the product was not accepted. In addition, supplier image to the customer was strained. Claim dollars were running at nearly 10$ per production unit, nearly double to previous years.
Approach
A cross-functional team was led by Luftig & Warren, International to address product surface quality early in 1997. The strategies employed included designed production studie ement initiatives to immediately translate findings into process controls. Training and education in various disciplines included researchers, engineers, operations and maintenance.
Results
By third quarter 1998, claim losses had dropped to less than $3 per unit or nearly 70%. Considering the volume based on 1997 figures, the cost avoidance for this problem exceeded $700,000 on an annual basis.
Submitted by LWI
Consultant
Bob Pahlkotter