Cost Reduction and Optimization. for. Manufacturing and Industrial Companies

Transcription

1 Cost Reduction and Optimization for Manufacturing and Industrial Companies

2 Scrivener Publishing 3 Winter Street, Suite 3 Salem, MA Scrivener Publishing Collections Editors James E. R. Couper Rafiq Islam Richard Erdlac Pradip Khaladkar Norman Lieberman Peter Martin W. Kent Muhlbauer Andrew Y. C. Nee S. A. Sherif James G. Speight Publishers at Scrivener Martin Scrivener (martin@scrivenerpublishing.com) Phillip Carmical (pcarmical@scrivenerpublishing.com)

3 Cost Reduction and Optimization for Manufacturing and Industrial Companies Joseph Berk

4 Copyright by Scrivener Publishing LLC. All rights reserved. Co-published by John Wiley & Sons, Inc. Hoboken, New Jersey, and Scrivener Publishing LLC, Salem, Massachusetts Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) , fax (978) , or on the web at Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) , fax (201) , or online at / Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials, The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) , outside the United States at (317) or fax (317) Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic formats. For more information about Wiley products, visit our web site at For more information about Scrivener products please visit Cover design by Russell Richardson. Library of Congress Cataloging-in-Publication Data: ISBN Printed in the United States of America

5 Dedication and Acknowledgments I HAVE WORKED WITH great manufacturing leaders. This book is dedicated to Johnnie Crean, Chuck Sebastian, Ed Elko, Irv Barger, Greg Burns, and John Gozza. Thank you for all you have taught me. PneuDraulics, Incorporated, a world-class developer and manufacturer of precision hydraulic aerospace components in Rancho Cucamonga, California, allowed access to their operation for many of the management concepts and photographs in this book. PneuDraulics is a great company, and I wish to thank their employees and the management team for their assistance. V

6 Contents Introduction Chapter 1 Part I Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Part I1 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Part I11 Chapter 16 Chapter 17 Chapter 18 Organizing a Cost-Reduction Program Labor Defining Headcount and Controlling Staff Growth Developing and Implementing Time Standards Measuring and Using Efficiency Assessing Machine Utilization Controlling Overtime Making Multiple Shifts Productive Finding and Reducing Lost Time Using the Learning Curve to Drive Costs Down Material Make-versus-Buy Determinations Inventory Minimization Material Utilization Minimizing Supplier Costs Supplier Negotiation Supplier Competition Process Improvements Workflow Optimization Setup Time Reduction Material-Handling Improvements vii

7 viii Chapter 19 Chapter 20 Part IV Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Part V Chapter 26 Chapter 27 Chapter 28 Part VI Chapter 29 Chapter 30 Index Scrap and Rework Reduction Work Center Cleanliness Design The Design Approach Requirements Relaxation Tolerance Relaxation Materials Substitution Packaging Overhead General Overhead Expenses Travel Inspection Gaining Disciples and Measuring Progress Suggestion Programs Measuring Progress CONTENTS