Many companies have experienced some kind of “rework,” but what exactly does this refer to?
REWORK = FREE WORK
Rework is when you pay twice or more to get the same output. If a widget costs $.25 to make and you had to do it twice to get it right, then your cost just went up to $.50 and most likely you didn’t make money on that widget. Furthermore, you can’t meet your schedule of delivering 10,000 widgets that week, so your customer is not happy and your employees are frustrated. Some rework is common and acceptable since no process is perfect. How much rework is acceptable? 1%, 5%, or maybe more? This seems to differ according to product, process, and corporate philosophy.
Product: If you are making plastic toys, perfection may not be mandatory and therefore a less than perfect product may be acceptable. Cost and use of the product plays an important role; the more expensive the product, the pickier the customer is and high quality is expected. Safety is another factor in producing a quality product. Rework is more common when high price ticket or safety may be a concern. Most of us will accept a bad purchase on eBay, but want our airplane pilot to get it right first time, every time.
Process: The more standardized the process the less rework and the opposite is true. Standard Operating Procedures (SOP) is a must for larger manufacturers in order to maintain consistent quality product. However, having SOPs in place is hardly enough. How well employees understand and follow these SOPs makes a world of difference. Road and speed signs are posted everywhere, but we still have hundreds of thousands of cops to enforce the law.
Corporate Philosophy: Corporate leaders dictate what’s acceptable when it comes to rework. I’ve seen 1% being too much and 25% being acceptable. Who is paying for rework? When cost is passed to customers then rework is more common and acceptable than when it is absorbed as operating cost.
What are common causes of Rework?
- Culture that promotes Silos
- Poor skills and training
- Insufficient job instructions
- Deadline pressure
- Environment
- Lack of Supervision & Accountability
- Wrong tools and/or materials
- Poor Planning
Some companies may not be able to totally eliminate rework, but they can definitely reduce it. Reducing rework will have a direct impact on the bottom line. If you need help with your Rework Challenge, give me a call!
