2014
Scrap Metal COPQ
Analysis
LEAN SIX SIGMA BLACK BELT PROJECT FOR
LAWRENCE TECHNOLOGICAL UNIVERSITY
In the analysis performed by an employee of scrap metrics and environmental
compliance measurements, customer supplied detail of scrap metal sales didn’t
agree with internal purchases. Further investigation by the employee indicated
inconsistent pricing of scrap metal. Combining these factors, the critical to quality
factor was developed utilizing a third party audit of the measurement process and
identifying the sigma level. Finally, improvement processes were implemented
with control features to optimize the process and scrap metal sales. This resulted
in surpassing yearly goals for scrap dollar sales but not achieving quality goal
standards due to the extrapolation from the sample was not representative of the
2013 population.
implemented
The increase in cross contamination was due to the
improved
measurement
procedures.
Management
recommendations for lean process improvements will improve overall scrap metal
sales, sigma level for cross contamination of scrap metal, and operational
production efficiency though problem solving issues utilizing scrap metal metric
indicators.
Gary Kapanowski, Master Black Belt
Sean Paul, Environmental Health
and Safety Officer
MOELLER MANUFACTURING
3/10/2014
EXECUTIVE SUMMARY
By performing the Lean Black Belt study on scrap metal sales, the organization was able to realize an
increase in scrap metal sales even with an abnormally high level of scrap metal cross contamination. In
the fiscal year of 2013, the organization increased scrap metal sales by $182,021.84 or 47.2% from the
previous year. This exceeded the yearly goal of $87,972.16 or 22.8%, derived from a sample 3rd party
audit of a single scrap metal delivery. The yearly results could have been higher due to the devaluation
of overall metal prices in 2013 from 2012.
The Cost of Poor Quality (COPQ) represented in the cross contamination of the scrap metal proved
harder to improve. From the 3rd party audit of the scrap metal process, the estimated range of the cost
of cross contaminated metals was from $13,494 to $31,919. The actual level of cross contaminated
metal in 2013 was $23,941. Even though the value of the COPQ was within the range of the estimate,
improved measurement of defects in 2013 indicated a higher defect level of 1.5 Sigma. Thus, the scrap
metal sample audit was not a true representative of the entire population signifying an opportunity for
future improvement.
1
MOELLER MANUFACTURING
Established in 1953, Moeller Manufacturing Company is an advanced manufacturing facility specializing
in machined parts for the gas turbine aircraft engine and power generation industries that encompasses
a majority of commercial and military aircraft operated in the United States and numerous fleets
worldwide. The product line includes small items such as specialized self-locking fasteners to complex
brackets, housings, manifolds, blade, and vane manufacturing.
To generate the products, the
organization has over 165,000 square feet of overall production space for over 650 employees. The
measurable commitment to quality is shown as an approved supplier to most major aerospace OEMs,
certified to ISO 9001, ISO 14001 and AS-9100, and accreditation under NADCAP.
2
DATA COMPILATION
Yearly accounting of the scrap metal volume by metal type is required by the EPA for environmental
compliance (TRI Report). The reporting by the scrap metal purchaser provides to the government and
selling organization the type and quantity of scrap metal provided for sale. Upon review by the Moeller
Manufacturing Environmental Health and Safety Officer (Sean Paul, EH&S), the scrap metal purchaser
during 2010-12 provided total and segmented scrap metal volumes that didn’t match internal detail or
responses by the scrap metal purchaser. The EH&S officer launched a detailed analysis to verify the
data to the EPA (See Appendix regarding Early Scrap Metal Problem Identification, Calculation,
and Cross Contamination Letter). The detailed spreadsheet indicated the overall scrap metal cross
contamination at a level exceeding 50%, pricing the metal at low value steel. The spreadsheet was
verified by the Master Black Belt (Gary Kapanowski).
The next step was to visually inspect the
production floor to see if this cross contamination level is actually occurring.
GEMBA WALKS
Project team visually reviewed production floor operations and procedures to verify the external
vendors reporting of the scrap metal sales. Upon three different review opportunities, the team didn’t
experience excessive levels of cross contamination. The findings resulted in zero cross contamination
defects and validated the current processes. Defects were noted in the internal manual shipping log.
The process audit on the manual shipping log indicated an employee issue for the defects. A change in
both the manual shipping log and employee was instituted in 2013 for process improvement and
improved measurement data.
THIRD PARTY AUDIT TEST
The goal for the third party audit test was to verify the discrepancy of the scrap mix and total weight
represented by internal and external metrics as seen in the EPA environmental compliance reports (TRI
Reports). The project team met with a new vendor (East Side Metals / RJ Torching) to perform the audit
of one scrap metal shipment on 12/20/12 before the original vendor receives the shipment. The new
vendor will report and validate the scrap metal volume mix, internal processes, and the value of the
3
scrap metal. The scrap metal shipment was returned sealed and released to the original vendor for
accurate comparison. See the Appendix section for Audit procedures and detailed results.
The audit indicated the shipment value exceeded the original vendor’s value by $1,496.66 or 22.8%. The
Project team requested additional testing to validate the 22.8% metric. Management decided the
metric was acceptable for this project to continue and use as the goal for 2013.
PROJECT CHARTER
The project team successfully completed a project charter authorized by management as the sponsor.
The following are the key details agreed to execute the project charter into operations:

Project Description: To maximize the value for scrap metal throughout the organization.

Business Case:
By not following basic operational procedures, the scrap metal barrels
experience cross contamination which cost an average $13,494 to $31,919 per year.

Problem Statement: Per third party audit of the scrap metal process on 12/18/12 and historical
data as background information, the Cost of Poor Quality (COPQ) for scrap metal is in the range
of $13,494 to $31,919 in cross contamination per year due to poor internal processes and
adherence to current procedures. Overall scrap metal sales increase by audit representative
percentage of 22.8% or $87,972.16.


GOALS:
o
0 barrels of cross contamination per week
o
2% overall AVG of cross contamination per barrel
o
3% overall AVG of liquid weight
o
2013 scrap metal sales $473,814.96
Expected Business Results:
o
Increase in scrap value through reduction in cross contamination: $13,494 to $31,919
per year
o
Increase in scrap value though improved scrap metal pricing: $87,972.16
o
Lower average % of cross contamination per barrel: Lower than 3%
o
Lower per barrel defect in cross contamination: Zero per year
o
Lower machine maintenance cost per year
4
o
Improved production efficiency per year
o
Reduction in scrap units per year
o
Improved production problem solving using the symptom of scrap metal from barrels to
indicate inefficiencies at specific machines

Expected Customer Benefits:
o
Improved delivery time through improved production efficiency and quality due to
reduction in scrap units and improved problem solving tools
CRITICAL TO SUCCESS FACTOR
The project team determined quality was the critical to success factor for this project. Due to the EPA
environmental compliance issue, proper reporting of scrap metal is vital to comply with the
organization’s mission statement authorized by management and reviewed by the AS9100 and
ISO14001 internal and external auditors.
LEAN SIX SIGMA STUDY
The team followed the six sigma steps for DMAIC as described by the LEAN SIX SIGMA POCKET
TOOLBOOK (George, Rowlands, Price, & Maxey). This section will review the detail behind each step to
implement process improvement to reach the metric goals. The team performed a Lean Six Sigma A3
presentation to clearly identify the DMAIC process.
DEFINE
The project charter was approved with measureable goals as described in the PROJECT CHARTER section
above. This included validating the problem statement, goals, and financial benefits. A process map
and SIPOC diagram was completed to assist with the identification of critical to success factors.
5
MEASURE
The current and future state process maps were completed by the team to identify the critical issues
needed for success. The team agreed the measurement system was poor due to the manual nature of
the process and lack of detail as viewed during the GEMBA WALKS. The team obtained approval from
the sponsor to perform a third party audit of a sample scrap metal volume and mix along with a review
of the process. The audit validated the need for a new measurement system and developed a baseline
used in the project charter for the project goals. The details on the audit are listed below:

52 barrels containing a total of 6,699 lbs. with 4,971 lbs. for scrap metal

Average estimate 3% of cross contamination per barrel

The individual barrel weight ranged from 17 lbs. - 280 lbs., avg. of 96 lbs.

One barrel was 45% cross contaminated

63% of sample is under the 3% avg. for cross contamination per barrel

AUDIT STATE:
2.5 Sigma
DPMO 19,231 Yield 98.08%

CURRENT STATE:
2.0 Sigma
DPMO 45,400 Yield 95.46%

FUTURE STATE:
3.0 Sigma
DPMO 2,700
Yield 99.73%
Due to the limited availability of accurate measurable data or additional audit samples, the capability of
the scrap metal sales process couldn’t be identified at this time. After a full year of data with the
improved data measurement process installed, this capability of the process will be identified to
advance the process improvement of the scrap metal sales. A cause-and-effect diagram (Ishikawa
diagram) was completed at this time to verify if other inputs were necessary to validate other than the
measurement system (See Appendix). The identification of cross contamination, collecting of the scrap
metal data, and pricing of scrap metal were considered as a priority in testing for Analyze.
Several Lean initiatives were identified and implemented during this process since there was no risk to
the project or other processes. The team changed the internal reporting from manual to an electronic
format to error proof (poka yoke) the data entry process. The team also implemented an employee
change to expedite change.
6
ANALYZE
The team reviewed the audit results and determined the scrap metal vendor was the main cause for the
Cost of Poor Quality (COPQ). This was identified through the process of completing the problem solving
report utilizing the cause-and-effect diagram (See Appendix). The 5Whys was used to determine the
root cause of the problem was the cross contamination of scrap metal, either internal and/or external.
The third party audit identified the cross contamination defects were originating from the scrap metal
vendor. This analysis allowed for the team to pass on additional statistical analysis and implement a
change scrap metal vendor to start in January 2013.
Although the third party audit sample indicated a 2.5 Sigma (1 barrel per week or 52 barrels per year),
the real current state is 2 Sigma (2 barrels of contamination per week or 123 barrels per year) based on
overall risk assessment and a single audit sample for analysis. By implementing changes in procedures,
the scrap metal Cost of Poor Quality (COPQ) will fall to 3, 7 barrels per year.
Several of the audit results were reviewed in detail, see below:

There were eight barrels with average of cross contamination exceeding 3% representing 18% of
the sample size weight
o
ALUMINUM
P13D4 5% (defect)
o
A286
P12D3 1%
o
INCO 718
P3D4
1%
o
INCO 718
P3D4
1%
o
SAW MIX
P13D2 3%
o
TI
P10D4 2%
o
TI
P13D3 2%
o
UNKNOWN
P12D1 2%
o
UNKNOWN
P7D2
2%
To complete the root cause and significant cause-and-effect relationship for the potential causes, the
team used brainstorming, Cause & Effect matrix, and Pareto charts validate the search drivers (See
Appendix).
7
A failure mode and effect analysis (FEMA) was completed to identify and mitigate risks. Each input was
validated with at least one selection in the FEMA. Of significant note, the risk of achieving future gains
in scrap metal sales still reside in implementing the lean initiatives as described in the FUTURE
IMPLEMENTATION IDEAS section. Each initiative will improve the process of collecting Scrap Metal,
Identifying Cross Contamination, and improve the recording of Scrap Metal.
The project team completed the Project Risk Assessment to determine the overall project risk at a low
level. This indicates to the project team that there are several factors that are not in their control that
could affect the successful outcome of the project. Monitoring and providing proactive adjustments to
the project will mitigate the risks. The project team also successfully completed a Project Check Sheet
and Project Check List indicating all necessary aspects to complete a Lean Six Sigma project was
addressed (See Appendix).
IMPROVE
As seen in the ANALYZE phase, the implementation of the new scrap metal vendor was launched in
January 2013. This was clear to the project team since the old scrap vendor was involved in every failure
mode identified in the analysis. Addressing the three inputs selected in the analysis section will assist in
achieving the project goals. By adding new procedures for collecting scrap metal, the organization can
reduce the overall defect rate for cross contamination and increase the scrap sales at the optimum level.
Some procedures were implemented to address this issue but the main issue of replacing barrels when
the metal of the operation is still in process. Identification of cross contamination is the second
improvement identified in the analysis section. Since this is sometimes difficult to identify different
metals, new procedures and equipment are necessary to validate scrap metal types which will identify
potential cross contamination. The third input for improvement is the pricing of the scrap metal. After
the new vendor is implemented, the procedure for the review of the scrap metal prices was
implemented to validate the prices used per the sales calculation. This will eliminate any defect in
pricing and allow for a more transparent business relationship.
Other potential solutions were evaluated and selected to optimize the operations. The “Future State”
process map was utilized as the optimization of the process. Each solution was tested as attainable and
didn’t incorporate “scope creep” since they reflected the project goals and organization’s goals. The list
of the additional solutions is presented below:
8


Lean Continuous Improvement Initiatives
o
Barrels need to be cleaned before use in scrap area
o
Each machine needs to be cleaned before change of metal or usage
o
Increase number of barrels for scrap metal
o
Number barrels with machine
o
Weight of barrel indication
o
Adequate baseline for metrics
o
Enhance reporting documents for scrap metal
o
Fluid weight issue to fully understand the scope for our activity
Optimize operations by utilizing new metrics
o
Obtain baseline metrics for cross contamination and fluid weight
o
Identifying the symptom downstream will indicate the problem upstream
o
Analyze fluid weight for improvement in effectiveness and efficiency
o
Prepare team members for change, measure results to see where future issues can be
resolved

Obtain industry baseline standards for fluid weight issue to properly measure our results and
maximize value throughout the system
CONTROL
Starting on 1/1/2013, updated procedures were installed to monitor and control the scrap metal sales
process. The operational procedures were transferred from maintenance into quality with the project
team member Sean Paul, EH&S Officer and the responsibility center. The accounting and management
communication of the process was transferred from Accounting into the project team leader, Gary
Kapanowski, Master Black Belt. Updated electronic processes and reports provide error-proofing of the
data. Monthly reporting of the project and metrics communicated to management and the sponsor.
Two-way communication with the new scrap metal sales vendor provided full transparency of the scrap
detail and a formal process to resolve problems (See Appendix for monthly control charts for COPQ and
Final A3 charts). After the fiscal year is complete and metrics obtained, the operational control will
return to Accounting.
The control measures and metrics used for this project are as follows:
9

Increase in scrap value: $13,494 to $31,919 per year

Cost in scrap metal per barrel is on average $259.50

Lower average % of cross contamination below 3% per barrel

Lower per barrel defect in cross contamination: Zero per year

Lower machine maintenance cost per year

Improved production efficiency per year

Reduction in scrap units per year

Improved production problem solving using the symptom of scrap metal from barrels to indicate
inefficiencies at specific machines
LEAN SIX SIGMA FINAL RESULTS
The results were mixed during the first year of implementation ending in the fiscal year 2013. The listing
below will indicate the year end metrics:


Lower per barrel defect didn’t achieve the goal of 0 barrels
o
Cost of cross contaminated equated to $23,941
o
Cost per cross contaminated barrel equated to $81.71, favorable to goal of $259.50
Lower overall 3% of average of cross contamination per barrel across production operations
didn’t achieve the goal

o
Number of barrels with cross contaminated at 293 or 9.2%
o
The DPMO equates to 90,818, yield of 90.8% or a 1.5 Sigma level
Obtain industry standards on fluid weight with a goal of 3%
o
Improvement to reduce fluid in scrap metal delayed by sponsor due to capital
investment outside of the scope of the project

Overall yearly scrap sales yearly goal increase of $87,972.16 or 22.8% attained
o
Year-to-year increase in 2013 at 182,021.84 or 47.2%

Lower machine maintenance cost year-to-year achieved with a 36.3% reduction

Improved production efficiency year-to-year achieved with a 28.7% gross margin improvement

Reduction of scrap units year-to-year achieved : 2.67% reduction

Improved production problem solving using symptom of scrap metal implemented in Top 30
part cost reduction team
10

Customer scorecard regarding delivery time and quality indicates above standard or baseline
achievement in 2013
RISKS OR CONSTRAINTS
The scrap metal price volatility and volume mix provides an overall risk to the levels of scrap sales. Also,
the organization is not formed to generate scrap sales but making good parts - to customers - on time.
Thus, since the scrap metal mix profile is always changing and focusing on the organization’s goal, any
micro-managing to optimize the scrap metal sales beyond the company’s vision and mission will lead to
inaccurate direction and results for the organization.
LESSON LEARNED
Implementation of Lean Six Sigma initiatives can be instituted and exceed stated goals within one fiscal
year.
FUTURE IMPLEMENTATION IDEAS
One Lean Six Sigma initiative not implemented due to the sponsor determination the issue was outside
of the project scope was to obtain industry baseline standards for fluid weight to properly measure our
results and maximize scrap metal value throughout the system. The equipment investment cost is
$20,995 with a return on investment of 24 months. The project team re-affirms the incorporation of
this initiative purely on a cost benefit ratio (See Appendix on Return on Investment).
Improvement of the cross contamination of scrap metal can be fixed by using more barrels. By
swapping barrels for each production operation of different metals will eliminate the issue by definition.
The organization can obtain additional scrap metal barrels without cost though the vendor.
The
project team re-affirms the incorporation of this initiative purely on a cost benefit ratio.
Using the scrap metric by specific equipment will indicate if the operation is in control with measurable
data. This is the next step in problem solving in operational management for the organization.
11
APPENDIX
PG 13
Environmental Health and Safety Officer Sean Paul’s Early Scrap Metal
Problem Identification
PG 13
Environmental Health and Safety Officer Sean Paul’s Early Scrap Metal
Problem Calculation
PG 14
Regal Recycling’s letter explaining Cross Contamination at Moeller
Manufacturing
PG 15-18
Third part audit process and results
PG 19-20
DEFINE
Project Charter
PG 21
DEFINE
Process Map: Current & Future States
PG 22
DEFINE
SIPOC
PG 23
MEASURE
Cause-and-effect diagram (Ishikawa diagram)
PG 24
ANALYZE
Problem Solving Report
PG 25
ANALYZE
Cause-and-effect matrix
PG 26
ANALYZE
Pareto Chart
PG 27-28
ANALYZE
Failure Modes and Effects Analysis (FEMA)
PG 29
ANALYZE
Project Risk Assessment
PG 30
ANALYZE
Project Check Sheet
PG 31
ANALYZE
Project Check List
PG 32
IMPROVE
Implement Pilot program to replace Regal Recycling with RJ Torching
PG 33
CONTROL
Cost of poor quality (COPQ) metric
PG 34-35
CONTROL
A3 for Scrap Metal Project
PG 36
Return on Investment: Fluid weight equipment
12
Environmental Health and Safety Officer Sean Paul’s Early Scrap Metal Problem Identification:
The scrap metal project was started from analysis required of metal sent off site for recycling. This is an
EPA requirement. While summing the receipts from our scrap metal recycler, I noticed that the recycler
was claiming that we were sending him huge amounts of steel and not the alloys we machine. An
example would be we would send 8 barrels of a valuable super nickel alloy, the receipt would only show
2 barrels of super nickel alloy and 6 barrels of steel. The recycler kept claiming a 40% or more cross
contamination rate was “forcing” them to devalue huge portions of our recycled metals.
I spent the next year adding up every receipt from the metal recycler and compared with the current
market values listed from recognized sources like the London Metal Exchange (LME) and the current
market pricing for options and futures. By the end of the first month of analysis I was absolutely
convinced the recycler was not acting in an honest manner.
Environmental Health and Safety Officer Sean Paul’s Early Scrap Metal Problem Calculation:
Per the analysis of the historical data and assumption of the level of cross contamination equates to 1 in
5 drums or 20%, per claim by the original scrap metal vendor, Regal Recycling, the estimated increase in
scrap metal value for 2013 is $165,213.
Other assumptions used to estimate the cost of the
misclassification of metals include stable production levels year to year.
The actual difference in scrap metal sales proved to be close to the estimate. With the actual sales
difference of $182,021.00, the difference from estimate is only 10.17%. The actual contamination rate
was less than 10%, while my original estimate was very conservative at a 20% contamination rate. If we
take the values of my estimate and utilize the actual rate of 10%, the overall difference is minor.
A good example would be Inconel (Inco) 718 which is one of the highest volume metals we processed in
both 2012 and 2013.

2012: Scale tickets from Regal stated we shipped 54,306 pounds of Inco 718. I estimated that
even if we contaminated 20% of the barrels that we should have sent another 37,920 pounds of
Inco 718 for recycling. This would have been a total of 92,226 total pounds of Inco 718 for
calendar year 2012.

2013: The scale tickets from RJ Torching show we shipped 96,333 pounds of Inco 718, a 4.3%
variation from the estimates that were established in the analysis 2012. This is a true
representative of the amount since 2013 production reduced by 1.6% from prior year.
13
REGAL RECYCLING’S LETTER EXPLAINING CROSS CONTAMINATION AT MOELLER MANUFACTURING:
14
THIRD PART AUDIT PROCESS AND RESULTS: 12/20/12
AUDIT STEPS UTILIZED IN THE 3RD PARTY AUDIT
1. Normal pickup on the 20th for Regal Recycling, original vendor
2. Bring RJ Torching representatives on site 12/18 and 12/19
3. Run the third party truck on 12/19 to the nearest state police scale; contact freight to find
nearest state police scale and time that they are available.
4. One sample for RJ Torching to work on the sample without interruption.
5. Talk with internal supervisors to prevent any tool steel drums from the sample. This eliminates
any inclusion of steel in the sample size.
6. Identify number and operators of the fork truck drivers in case of errors or communication to
Regal Recycling, original vendor.
7. Log and mark each drum for metal and cross contamination.
8. Lock the trailer when the audit is complete to prevent addition or deletion of any drums from
the sample.
8. Report any observation by RJ Torching’s to better improve the process and controlling scrap
metal.
NOTES FROM THIRD PARTY AUDIT OF SCRAP METAL



Met with East Side Metals to provide an audit of the scrap metal process and results for the
12/20/12 pick-up from Regal
Objectives of the meeting:
o Obtain approval for audit of metal and weighing of audit scrap metal before Regal pickup
o Validate our processes is in control
o Validate the value of the scrap metal
The audit process will satisfy the following action steps:
o Test next shipment’s weight through 3rd party vendor – approved by Management
o Test validity of each barrel content through increased testing (on 1/3 to 1/4 filled basis)
– waiting for procedure update approval
 Obtain approval by management for the added resources
o Test individual barrel weight though added weighing procedure and documentation
o Test calibration of gages and weight measurement procedures to validate audit
measurements
o Test valuation of metal prices with a 3rd party vendor
 Validate all 2011 and 2012 prices
15
o
 Compare with current vendor prices
Test shipment with a 3rd party group for both weight and pricing
 Have 3rd party vendor to a check on a shipment before current vendor receives
shipment to validate measurement of the following:
 Total weight of the shipment
 Individual weight of each type of metal
 Validation of any cross contamination of metals
 Pricing of each metal in the overall population
DETAIL PER SCRAP AUDIT: 12/18/12
1. A third party documented a sample size of 52 barrels containing a total of 6,699 lbs. of which
4,971 lbs. was for scrap metal; the difference is in barrel weight.
2. The average estimate % of cross contamination per barrel within the sample size was 3%
a. This average level of cross contamination is not a concern for the value chain per third
party auditors
3. The individual barrel weight ranged from 17 lbs. to 280 lbs. with an average of 96 lbs.
a. Per past experiences and review of the audit sample of barrel label of metal and the
audited four staged verification of the contents, contamination occurrences are most
likely for heavier barrel weights due to barrel use in multiple operations increases with
weight.
b. For our calculations, we will limit the exposure to the TOP 15 barrel weights from this
sample as the extrapolation for the COPQ calculation (173 lbs.).
4. One barrel was 45% cross contaminated and considered as null value and a quality defect
a. This represents 1.92% of the sample population (1/52) or about a 2.5 Sigma level
5. A review of the metal segment groups indicate that 63% of the metal segment group weight is
under the 3% average for cross contamination
6. The metal segment groups with an average of cross contamination exceeding 3% are the
following, represented as a % of the sample size weight:
 Aluminum:
9%
 A286:
1%
 TI:
14%
 UNKNOWN:
13%
 TOTAL:
37% of the sample size weight
7. There were eight barrels with average of cross contamination exceeding 3%
a. This representing 15.4% of the sample size in quantity (8/52) and 18% of the sample size
weight
8. Based on individual barrels with an average of cross contamination exceeding 3% are the
following, represented as a % of the sample size weight:
 ALUMINUM
P13D4
5% - indicated as a quality defect per
third party auditors
 A286
P12D3
1%
16
 INCO 718
P3D4
1%
 SAW MIX
P13D2
3%
 TI
P10D4
2%
 TI
P13D3
2%
 UNKNOWN
P12D1
2%
 UNKNOWN
P7D2
2%
 TOTAL:
18% of the sample size weight
9. Cost of Poor Quality (COPQ) for cross contamination of barrels for the sample size was
calculated
a. The barrel with 45% cross contaminated was of Aluminum, Drum# P13D4, priced at
$0.50 per lbs.
b. Resell the cross contaminated barrel at $0.06 per lbs.
c. The difference of $0.44 is used for pricing calculations
d. The weight of the metal was 257 lbs. for the cross contaminated barrel, Drum# P13D4
e. This calculates into $113.08 per cross contaminated barrel using the audit as the
baseline, Aluminum pricing
f. Risk Analysis:
i. There is a risk to the analysis if the scrap metal is not always Aluminum
ii. There is a risk to the analysis if the scrap metal weight per barrel is not always
257 lbs. (top end of the audit sample size)
iii. Aluminum represents only 9% of the sample size: thus, there is 91% available in
other scrap metal
iv. Price for Aluminum is $0.50 per lbs.
v. Average price for all 2012 scrap metals used in the shop is $1.56 per lbs.
vi. The price for INCO, most used scrap metal at 15% of sample size, ranges from
$1.90 to $6.40 per lbs.
g. Metrics for COPQ utilizing the Audit Sample data with risk analysis input
i. Overall metrics for Cost of Poor Quality (COPQ) for scrap metal value per barrel
is the following:
1. Price Aluminum:
$76.12
2. Price 2012 Scrap Metal AVG of $1.56:
$259.50
3. Price INCO - Low is $1.90:
$318.32
4. Price INCO - AVG is $3.46:
$588.20
5. Price INCO - High is $6.40:
$1,096.82
ii. Overall Sigma Level and State financial impact for Cost of Poor Quality (COPQ)
for scrap metal value:
1. 2 Sigma - Probable State
a. Price Aluminum:
$9,362.76
b. Price 2012 Scrap Metal AVG of $1.56:
$31,918.50
c. Price INCO - Low is $1.90:
$39,153.36
d. Price INCO - AVG is $3.46:
$72,348.60
e. Price INCO - High is $6.40:
$134,908.86
17
2. Moeller 2.5 Sigma - Current State
a. Price Aluminum:
b. Price 2012 Scrap Metal AVG of $1.56:
c. Price INCO - Low is $1.90:
d. Price INCO - AVG is $3.46:
e. Price INCO - High is $6.40:
3. 3 Sigma - Future State
a. Price Aluminum:
b. Price 2012 Scrap Metal AVG of $1.56:
c. Price INCO - Low is $1.90:
d. Price INCO - AVG is $3.46:
e. Price INCO - High is $6.40:
4. 6 Sigma - Ideal State
a. All scenarios are at $0.00 cost
$3,958.24
$13,494.00
$16,552.64
$30,586.40
$57,034.64
$532.84
$1,816.50
$2,228.24
$4,117.40
$7,677.74
h. Conclusion
i. Due to the overall sigma level, scrap mix, and scrap production processes, the
risk assessment indicates the following:
1. Current State is realistically at 2 barrels of heavy contamination per
week or 2 Sigma Level; there is a chance the one barrel per week which
will be accounted for in the range
2. Overall weekly quantity of 52 barrels is on the low end of the average
per known data for 2012. Thus, the adjustment from the one time audit
sample of one contaminated barrel to two is not out of the statistical
average for the sample size
3. The price of the 2012 scrap metal average is the most appropriate value
for the study since the overall scrap distribution isn’t heavily
concentrated in a few metals
4. By implementing changes in procedures, the scrap metal Cost of Poor
Quality (COPQ) will fall to 3 Sigma Level
ii. Current State impact of scrap metal Cost of Poor Quality (COPQ)
1. Upper Control Limit: $31,918.50
2. Lower Control Limit: $13,494.00
iii. Future State impact of scrap metal Cost of Poor Quality (COPQ)
1. Upper Control Limit: $1,816.50
2. Lower Control Limit: $0.00
iv. Metric per barrel for scrap metal Cost of Poor Quality (COPQ)
1. $259.50
18
DEFINE
Project Charter
Black Belt Project Charter
Project Name
Associates
Project Participant
Champion
Start Date:
Scrap Metal COPQ Analysis
Sean Paul
Business / Location
Telephone Number
Wixom
X406
Telephone Number
Telephone Number
Gary Kapanowski
9/5/12
Target End Date:
X334
6/1/13
Project Details
Project
Description
Business Case
To maximize the value for scrap metal throughout the organization.
By not following basic operational procedures, the scrap metal barrels experience
cross contamination which cost an average $13,494 to $31,919 per year.
Per 3rd party audit of the scrap metal process on 12/18/12 and historical data as
background information, the Cost of Poor Quality (COPQ) for scrap metal is in
the range of $13,494 to $31,919 in cross contamination per year due to poor
internal processes and adherence to current procedures. Overall scrap metal
sales increase by audit representative percentage of 22.8% or $87,972.16
Process & Owner Finance
Problem
Statement
Scope
Project Goals
Maximize scrap
value through
continuous
improvements
Optimize
operations
Obtain industry
standards on fluid
weight
Increase in scrap
metal sales
Start:
Stop:
Includes:
Excludes:
Metric
Once scrap metal is produced from operations
Payment for scrap metal by 3rd party
Operations through payment cycle
Nothing
Baseline
Current
Goal
Theoretical
Max.
1 barrel of
cross
contamination
per week
2 barrels of
cross
contamination
per week
0 barrels of
cross
contamination
per week
0 barrels of
cross
contamination
per week
3% overall
Lower overall 3%
AVG of cross
AVG of cross
contamination
contamination
per barrel
17% overall
Lower overall
AVG of liquid
17% AVG of
weight
liquid weight
Scrap metal
2012 scrap
sales increase
metal sales
22.8% yr-to-yr
$385,842.80
3% overall
AVG of cross
contamination
2% overall
AVG of cross
contamination
0% overall
AVG of cross
contamination
17% overall
AVG of liquid
weight
3% overall
AVG of liquid
weight
0% overall
AVG of liquid
weight
2013 scrap
metal sales
$567,864.64
2013 scrap
metal sales
$473,814.96
2013 scrap
metal sales
est. $700,000
Cost per cross
contaminated
barrel = $259.50
19
DEFINE
Project Charter
Expected
Business
Results

Expected
Customer
Benefits
Team members



Gary Kapanowski
Sean Paul
Support
Required

Management to approve process to implement continuous improvement
processes and procedures
Risks or
Constraints



Mix of scrap can lead to different values of scrap value
Weight per barrel has a wide range
Increase in production can lead to increase in potential value and different
sigma levels







Increase in scrap value through reduction in cross contamination: $13,494
to $31,919 per year
Increase in scrap value though improved scrap metal pricing: $87,972.16
Lower average % of cross contamination: Lower than 3% per barrel
Lower per barrel defect in cross contamination: Zero per year
Lower machine maintenance cost per year
Improved production efficiency per year
Reduction in scrap units per year
Improved production problem solving using the symptom of scrap metal
from barrels to indicate inefficiencies at specific machines
Improved delivery time through improved production efficiency and quality
due to reduction in scrap units and improved problem solving tools
20
DEFINE
Process map
21
DEFINE
SIPOC diagram
22
MEASURE
Cause-and-effect diagram (Ishikawa diagram)
23
ANALYZE
Problem Solving Report
Report No:
Author:
Gary Kapanowski
Date:
1/2/2013
Shift
1 / 2 / 3 / All
Problem Description:
Per 3rd party audit of the scrap metal
process on 12/18/12 and historical data as
background information, the Cost of Poor
Quality (COPQ) for scrap metal is in the
range of $13,494 to $31,919 in cross
contamination per year due to poor internal
processes and adherence to current
procedures. Overall scrap metal sales
increase by audit representative percentage
of 22.8% or $87,972.16.
Problem Definition:
To maximize the value for scrap metal
throughout the organization.
Title : Scrap Metal COPQ Analysis Project
Root cause Analysis (enter each of the 1st why from the fish bone
diagram)
Why?
Sketch:
Scrap metal mix per 3rd party provider not matching with purchasing
why ?
More steel metal scrap than purchased in one year
why?
Mix of scrap - cross contamination levels indicate process problem > 1σ
why?
We cannot account for the sigma level of scrap process
why?
Never audit or reviewed scrap process to know level of problem
Where was the defect found ?
In one barrel during scrap
Root Cause :
audit
Cross contamination of scrap metal in barrels
Standard :
Deviation :
at least 2σ
Problem since:
start of operation
How often : (vh /
weekly
shift)
Containment (Short term C/M, Band-Aid)
Cost in scrap metal per barrel is on average
$259.50
Low er average % of cross contamination: Low er
than 3%
Point of Cause: By 3rd party
audit team
Who
SP
Date
Follow-up Short term (C/M, Band-Aid) & Long-Term C/M Who
6/1/2013 GK 1/31/14
Increase in scrap value: $13,494 to $31,919 per
year
Date
Follow-up
SP
6/1/2013 GK 1/31/14
GK
6/1/2013 GK 1/31/14
Low er machine maintenance cost per year
SP
Low er per barrel defect in cross contamination:
Zero per year
SP
Improved production problem solving
GK
6/1/2013 GK 1/31/14
Improved production efficiency per year
6/1/2013 GK 1/31/14
GK
6/1/2013 GK 1/31/14
6/1/2013 GK 1/31/14 Reduction in scrap units per year
SP
6/1/2013 GK 1/31/14
Direct Cause Analysis:
Similar Areas where this might Apply: Maintenance
(1) Indicate possible causes, (2) Circle most likely causes
Follow-up & Evaluation: Apply metrics and lean improvement
processes
Issue Resolved:
Issue Not Resolved : (state further followCost in scrap metal per barrel is up activities)
on average $259.50.
Lower average % of cross contamination:
Lower than 3%.
Improved production problem
solving.
Lower per barrel defect in cross
contamination: Zero per year.
Lower machine maintenance
cost per year.
Increase in scrap value: $13,494 to $31,919
per year.
Improved production efficiency per year.
Reduction in scrap units per year
Implement Lean Initiatives for 2014.
Signatures
Test
direct
Cause

True Cause
?
Possible Cause
cross out
GARY KAPANOWSKI
Not a Cause
24
2/16/2014
ANALYZE
Cause-and-effect matrix
Process
Step
5
5
9
1
2
3
4
Increase in
scrap metal
sales
Optimize
operations
What degree of effect does the input have on the
output?
9
Maximize scrap
value through
continuous
improvements
Rating of Importance to Customer
Obtain industry
standards on
fluid weight
Cause and Effect Matrix
Scrap Metal COPQ Analysis Project
Total
Rating Scale: 3, 5, 7, & 9.
Process Input
5
Collecting of Scrap Metal
9
9
7
9
242
6
Identification of Cross Contamination
9
9
7
9
242
8
Pricing of Scrap metal
9
9
7
9
242
9
Forms used to record scrap metal
9
9
3
3
168
4
Recording of Scrap Metal
7
7
5
3
150
2
Maintenance
3
9
9
3
144
7
3rd Party Provider detail
7
3
3
5
138
3
Finance
5
3
3
5
120
1
Quality - Safety
3
7
3
3
104
25
ANALYZE
Pareto Chart
26
ANALYZE
Failure Modes and Effects Analysis (FEMA)
SUMMARY: Failure Modes and Effects
Analysis (FEMA)
Process or
Product Name:
Scrap Metal COPQ
Analysis Project
Responsible:
Gary Kapanowski
S
E
V
O
C
C
D
E
T
R
P
N
Collecting of
Scrap Metal
9
9
9
512
Identification of
Cross
Contamination
9
7
9
384
Recording of
Scrap Metal
7
7
7
216
Quality - Safety
7
7
7
216
Maintenance
7
5
5
175
Pricing of Scrap
metal
9
3
3
81
3rd Party Provider
detail
9
3
3
81
Forms used to
record scrap metal
7
3
3
63
Finance
7
3
3
63
Item/Function
27
ANALYZE
Failure Modes and Effects Analysis (FEMA)
Failure Modes and Effects Analysis
(FMEA)
Prepared by:
Responsible:
Gary Kapanowski
FMEA Date (Orig) ___8/20/13_____ (Rev) __12/20/12___________
S
O
D
R
E
C
E
P
Actions Taken
V
C
T
N
Who is
What are the
Rate each and recalculate
responsible completed actions? the RPN after action has
for the
been taken.
recommen
ded action?
Collecting of
Scrap Metal
Mixing of metals
creating
contamination
Reduction of scrap
metal value
9
Production operators not
changing barrels for
change of metals in
operations
9
None
9
New procedures
to exchange
VP
Project updated
729 barrels when
Production processes
metals in
operation changes
8
8
8
512
Identification of
Cross
Contamination
Non-recognition of
change in metals in
barrels
Reduction of scrap
metal value
9
Not noticing different
metals in barrels
7
None
9
New procedures &
equipment to
VP
Project updated
567 validate review of
Production processes
scrap metal before
placing in storage
8
6
8
384
Recording of
Scrap Metal
Cannot validate type on
Current system cannot
metal causing
scan for metal type
inaccurate scrap
without equipment
identification
7
Lack of equipment
7
None
7
343
6
6
6
216
Quality - Safety
Not using quality
metrics to validate
scrap metal trends
Not validating
relationships between
metrics and goals
7
Lack of procedures
7
None
7
New procedures
343 to list connections CFO
of metrics
6
6
6
216
Maintenance
Not providing clean
barrels causing
contamination
Cross Contamination
7
Lack of identification of
non-clean barrels
5
None
5
New procedures
VP
175 to include cleaning
None
Production
of scrap barrels
7
5
5
175
Pricing of Scrap
metal
Non-recognition of
different metal prices
when calculating
scrap sales
Reduction of scrap
metal value
9
Not reviewing 3rd party
prices for different scrap
metals
7
None
9
567
New accounting
procedures installed
on 8/1/13
9
3
3
81
3rd Party Provider Not providing
detail
transparent data
Reduced scrap metal
sales
9
Not reviewing differences
from internal vs. external
reports
5
None
9
New procedures
405 to review scrap
metal detail
New procedures to
review scrap metal
detail installed
8/1/13
9
3
3
81
Forms used to
Manual form cannot
record scrap metal be read / inaccurate
Cannot validate scrap
metal sales report from
vendor
7
Operator causing error in
manual recording of the
scrap metal: type &
weight
5
None
7
Electronic form to
New electronic form
Complianc
245 eliminate operator
implemented in
e Officer
errors
1/15/13
7
3
3
63
7
Lack of procedures
7
None
7
343
7
3
3
63
28
What are the
actions for
reducing the
occurrence,
decreasing
severity or
improving
detection?
Responsibil
ity & Target
Completion
Date
What is the impact of
the Failure Mode on the
customer?
Not reviewing monthly
Not providing proper
payment cycle and
review of scrap metal
overall monitoring scrap
sales
metal sales
What are the existing
controls and procedures
that prevent the Cause or
Failure Mode?
Recommended
Action(s)
In what ways can the
process step go
wrong?
Finance
What are the causes of
the Failure Mode?
Current Design Controls
RPN
Potential
Cause(s)/Mechanism(s)
of Failure
Page 1 of 1
Calculated
Potential Effect(s) of
Failure
GK
How well can you detect
Det
the Cause or Failure
Item/Function
What are the
process steps?
Potential Failure
Mode(s)
How often does the
Occ
Cause or Failure Mode
Scrap Metal COPQ
Analysis Project
How severe is the effect
Sev
on the customer?
Process or
Product Name:
Additional
equipment for
recording scrap
metal
Complianc Project updated
e Officer
processes
Update accounting
procedures to
Controller
include pricing
validation step
New procedures
to review scrap
metal detail
monthly
Controller
CFO
Project updated
processes
New procedures to
review scrap metal
detail installed
8/1/13
ANALYZE
Project Risk Assessment
Project Name:
Scrap Metal COPQ Analysis Project
Project Sponsor:
Gary Kapanowski
Business Name:
Moeller Manufacturing
Date:
1/3/2013
People Risks
Project has a full-time functional and technical project manager with appropriate experience.
Project has senior executive support and a suitable steering group.
Roles, responsibilities, and decision authorities for the project team have been outlined and documented
Appropriate resources, including qualified project team, firmly committed by all stakeholders for the entirety of the project.
People Risks Total
Business Risks
This entire project is fully funded and, if already commenced, on budget.
Project is currently on schedule.
Project cost, benefits, and scheduling agreed to by all stakeholders.
Committed project spend can be accurately tracked.
Breakeven return on investment calculated... and is both realistic and acceptable.
Project Timeline and Cost Benefit Analyses include plan for legacy system shut down.
Business Risks Total
Adoption Risks
Communication plans span project cycle, both intra-team (internal) and extra-team (users/stakeholders).
This system DOES NOT impact multiple business functions or locations.
Change Management strategy has been defined and implemented.
Business process transformation (including elimination of parallel processes) affirmed by project sponsor and user community.
Control plan addresses functional ownership of data input quality and ongoing data management/clean-up.
Adoption Risks Total
Process Risks
Project follows a defined project management process
Strict rhythm of reviews by sponsor and functional / technical leaders, including all tollgates.
Key milestone dates set/agreed to by both the project team and stakeholders.
Periodic outside, independent reviews of this project, with a report out to the functional sponsor.
Clear procedure used for escalation and approval of project scope change.
Process Risks Total
Technical Risks
Design requirements, driven by user inputs, are clearly documented, prioritized, and frozen.
All environments (e.g., staging, development, testing) and tools are already in place for the team's use.
Make vs. Buy assessment has been performed.
This is a NOT new or pre-production release of a technology.
Project will NOT require heavy customization of packaged software.
This project digitizes a simple process, and requires few interfaces to other systems.
Technical Risks Total
External Risks
This project DOES Not involve working with multiple vendors.
Application approved by legal for security and privacy
Supplier viability is strong has successfully worked with the selected vendor(s) before.
Success of this project DOES NOT depend on outcome of other parallel projects at business.
External Risks Total
Overall Total
1
1
1
1
4
1
1
1
0
1
1
5
1
0
1
1
1
4
1
1
0
1
1
4
1
1
0
1
1
1
5
1
1
0
1
3
25
0 - If false and 1 if True or Not applicable
0-15 - High Project Success Risk
16-25 - Medium Project Risk
>25 Low Project Risk
29
ANALYZE
Project Check Sheet
STEP
1
Location (Plant):
Moeller
Manufacturing Wixom
Project Name: Scrap Metal COPQ Analysis Project
Blackbelt/Greenbelt: Gary Kapanowski
DELIVERABLE
REQUIREMENTS
Problem Statement
Should include a complete, detailed description of problem (what is the y?), the
current level of performance, and why this is important to Lear and/or the customer
Must not contain causes, solutions, or any information not supported by data - there
must not be an assumed solution
MEETS
1
Defect Definition
1
Objective
1
Customer and CTS's
Includes a clear description of what the defect is, how it is measured, the units of
measure, and how many opportunities per part
Must refer to the same problem (the y) as defined in the problem statement. DPMO
and Z score are measured from the defect defined
Must be in terms of % reduction in defect rate for the (y) defined in the problem
statement and defect definition
Guideline is 50% reduction if over 3 sigma, 90% if under 3 sigma, unless an
acceptable reason to have another goal is defined
Only include customers and CTS's affected by the y being addressed
1
Team Selection
A list of team members and their job function
1
1
SigmaTrac/Project
Authorization Sheet
Initial Financial Estimate
All fields filled out, all required signatures obtained. Project should be linked to a key
plant metric.
Must show supporting documentation and how calculated.
1
Project Timeline
Use the 12 Step Checklist format
1
Process Map
2
3
4
5
5
6
6
7
8
9
10
11
11
12
12
12
Must update sections that are relevant to the project
Must use proper controlled documentation procedure
Complete and attach to SigmaTrac
12
Sign off by Process Owner
Complete and document closure process as required by individual plant
12
Update and Close Project in
SigmaTrac
All fields filled out, project evaluated for shareability
X
X
X
X
X
X
X
X
Must be completed to the appropriate level
Must include all of the following: value added or not, inputs and outputs at each step,
controllable or noise, data collection points and what data is collected
Spec for Output Variable
Must define the specification for the defect (y) being studied
Units and number of opportunities per part must be defined
Spec should be clear and concise
Successful Measurement
Must document a description of the measurement system and gage R&R process
System Analysis
The gage for the defect (y) must pass a variable or attribute gage study. The key
GR&R metrics must be presented.
If MSA initially fails, must document improvements and complete follow up acceptable
study.
If an "other" type of study was used, then the method must be clearly defined.
Initial Process Capability
Process capability for the defect (y) must be completed
Analysis
DPMO and Z score must be presented
Spec used should match that defined in step 2
Project direction should be discussed based on capability results (is project focused
on variation or centering, or both?)
Refined Problem Statement, Project Authorization form should be updated with new findings. Objective should be
Defect Definition, and
defined as a % reduction in DPMO on the y as calculated in step 4
Objective
Guideline is 50% reduction if over 3 sigma, 90% if under 3 sigma, unless an
acceptable reason to have another goal is defined
Must finalize problem statement and defect definition, and document any revisions
from step 1
Revised Financial Estimate
Required if project definition or scope has changed since initial estimate
Must show supporting documentation and how calculated.
COPQ findings must be added to the financial estimate.
Identification of All Potential Must have been completed with the project team as a group
X's
Must include documentation of all tools/information used to identify x's (i.e. fishbone
diagram, pareto charts, etc)
Prioritization of X's to Pursue Must have been completed with input from the project team as a group
Must include documentation of all tools/information used to prioritize x's (i.e. C&E
matrix, multi vari studies, etc)
Documentation must include potential x matrix
Finalized List of KPIV's with Must include a completed potential x matrix with all information filled out
Statistical Significance
Each x investigated must have a p value to justify next steps
Evaluated
For each hypothesis test used, must document the hypothesis being tested, the data
collected, and the result
If a DOE is used, documentation must include a DOE planning sheet, analysis of
results (initial and reduced ANOVA model, appropriate graphical analysis, transfer
equation, SSE analysis), and conclusions
Optimum Operating Levels
Must demonstrate use of the appropriate statistical tools to determine the optimum
for KPIV's
process
If a DOE is used, documentation must include a DOE planning sheet, analysis of
results (initial and reduced ANOVA model, appropriate graphical analysis, transfer
equation, SSE analysis), and conclusions
Validation of optimized process under production conditions must be completed and
documented
Tolerances or Operating
Must set a tolerance for each variable KPIV
Ranges for KPIV's
Calculation and verification data for process settings must be documented
Successful Measurement
Must complete a successful MSA for all variable KPIV's
System Analysis for KPIV's
Must document a description of the measurement system and gage R&R process
If MSA initially fails, must document improvements and complete follow up acceptable
study.
If an "other" type of study was used, then the method must be clearly defined
Must evaluate the need for re-validation of the measurement system for the (y) and
document the study or the reason it was not required
Process Capability for all
A long term capability study is required for each variable KPIV
KPIV's
Must assess and provide explanation as to whether capability is acceptable
Unacceptable capabilities must be improved to an acceptable level
Final Process Capability for
Must calculate improved process capability for the y in terms of long term DPMO and
Output
short term Z
The defect definition, unit of measure, and opportunity count must be consistent with
that of step 4
Results must achieve objective for improvement set in step 5
Controls for each KPIV
A process control must have been implemented for each KPIV
Control Plan and FMEA
Updated
Executive Summary
DOES NOT COMMENTS
MEET
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
30
Reliable detail to properly calculate not available at this time
ANALYZE
Project Check List
Project:________________________
Scrap Metal COPQ Analysis Project
Black Belt: GK
DEFINE PHASE
1
2
3
4
5
6
7
8
9
Title Page
Time Line
Problem Definition - Scope & Strategy
Financial Summary
Team and Support Personnel
Evidence of Team Meetings
Process Flow Diagram
Process Flow Diagram - Generic
Line Layout - Generic
Optional
Required
Required
Required
Required
Required
Required
Required
Optional
x
x
x
x
x
x
x
x
x
Optional
Required
Required
Required
Required
Required
Required
Required
x
x
x
x
x
x
na
na
Optional
Required
Required
Required
Required
Optional
x
x
x
x
x
x
Optional
na
Required
x
MEASURE PHASE
1
2
3
4
5
6
7
8
Title Page
Customer Specifications
Measurement System Analysis - Variable
Measurement System Analysis - Attribute
Measurement System Analysis - Failure
Historical Data
Process Capability - Process/Product Report
Process Capability - Six Pack Report
ANALYZE PHASE
1
2
3
4
5
6
7
8
Title Page
Cause and Effects Matrix
Data Collection Plan - Rational Subgroups
Sampling Plan
Potential X Matrix
Graphical Analysis:
Pareto, Histogram, Run Chart, Box Plot
Graphical Analysis:
Multi-Vari, Main Effects
Hypothesis Testing
IMPROVE PHASE
1
2
3
4
5
6
Title Page
Variation Flow Down Hypothesis Testing
Design of Experiments (DOE)
Establishing Targets or Tolerances
Measurement System Analysis
Process Capability
Optional
Required
When Applicable
Required
Required
Required
x
x
na
x
x
x
C0NTROL PHASE
1
2
3
4
5
6
Title Page
Process Control
Control Plan
Control Plan - Sign Off Sheet
FMEA - Project Risk Assessment
Process Benefits
Optional
Required
Required
Required
Required
Required
31
x
x
x
x
x
x
IMPROVE
Implement Pilot program to replace Regal Recycling with RJ Torching.
Other improvement initiatives:

New procedures to exchange barrels when metals in operation changes

New procedures and equipment to validate review of scrap metal before placing in storage

Update accounting procedures to include pricing validation step

Electronic form to eliminate operator errors

Additional equipment for recording of scrap metal

New procedures to include cleaning of scrap barrels

New procedures to review scrap metal detail monthly

New procedures to list connections of metrics
32
CONTROL
Cost of poor quality (COPQ) metric
33
CONTROL
A3 for Scrap Metal Project
34
CONTROL
A3 for the Scrap Metal Project
35
RETURN ON INVESTMENT: FLUID WEIGHT EQUIPMENT
RETURN ON INVESTMENT FOR MOELLER MANUFACTURING
SCENARIO #1 ENCO N N33V1-10 EVAPO RATO R
Current Disposal Costs, $/ Gallon
$0.30
HP of blower
Plant Electric Cost $/KWhr
$0.09
Cost of labor $/hr
0.50
Cost Of Gas $/T herm
0.80
System Rating, GPD
240
Volume of Waste Water Gal/Month
4,308
Burner Size BT U/Hr
118,750
Rating of Evaporator System GPH
10
Labor per Week Hrs
0.75
Ye ar O ne
Volume Gallons/Month
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Hrs of Oper./Mo.
431
Days Operation/month
18.0
Fluid Reduction Factor
85%
Hauling Cost/Gallon
Month 8
Month 9
Month 10
Month 11
Month 12
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
T otal Disposal Cost/Mo.
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
Cost to Haul
Cost of ENCO N
N33V1-10
$20,995
Electricity
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
Cost of Fuel
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
Cost of Labor
Cost to Haul
Residue
T otal Cost of
System/Per Mo
$21,424
$429
$429
$429
$429
$429
$429
$429
$429
$429
$429
$429
Pay Back
$20,132
$19,268
$18,405
$17,542
$16,678
$15,815
$14,952
$14,088
$13,225
$12,362
$11,498
$10,635
Ye ar Two
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Estimated
Gallons/Month
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
4,308
Disposal Cost
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
$1,292
Electricity
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
$20
Cost of Fuel
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
$409
Cost of Labor
Cost to Haul
Residue
T otal Cost/Month
Pay Back
$429
$429
$429
$429
$429
$429
$429
$429
$429
$429
$429
$429
$9,772
$8,908
$8,045
$7,182
$6,319
$5,455
$4,592
$3,729
$2,865
$2,002
$1,139
$275
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