Spoilage definition, ratio w/ sales, and what can be an "expected" amount

[Jayhawkmike]

As a company we have been recently tasked to remove any tolerance of spoilage. We know it will happen, but in tight times as these, we need to do everything possible to avoid. I'm sure other companies are putting together similar initiatives.

We have a small committee of company department heads (me in prepress) that are trying to define +spoilage+ and discuss how to eliminate. My definition is somewhat narrower than my controller or estimators.

My definition = $$ that is waisted on anything that needs to be reworked because of defect in materials, negligence by the people who work on those projects, lack of training, or bad planning.
Their definition = Any abnormal loss that is created during the manufacturing process. All activities and materials that go outside the original plan or estimate is defined as spoilage.

This may be symantics, but my collegues definition includes +ineffeciencies+, which is wasteful, yes, but not +spoilage+ as I think of it.

Or is it?

I want opinions here. Is this a good definition?

Also, what would be an accepted, or known level, or spoilage for commercial printers? Where would I go to get such numbers? Is there a ratio guide from NAPL, PIA/GATF? I don't see a study that specifically list spoilage.

Edited by: Michael McKee on Jun 24, 2008 4:45 PM

Edited by: Michael McKee on Jun 24, 2008 4:50 PM

 

[Dannymonky]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

Crappy response but----reusing make ready can save a bit on stock....having a sales team that actually knows what they are selling helps a bit too...i'm outta options...beer please!

 

[rich apollo]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

I shouldn't, but I'll wade in here.

In my opinion, which is just as valuable/worthless as any other, spoilage is something that requires rework or a reduction in the price charged. Inefficiencies aren't spoiled work. If you didn't have to redo it, or sell at a reduced cost, then it wasn't spoiled. I would also exclude issues that arise from materials. That's waste - unless somebody didn't catch the issue and so rework or a rerun resulted.

Inefficiencies are a whole different matter.

+Their definition = Any abnormal loss that is created during the manufacturing process. All activities and materials that go outside the original plan or estimate is defined as spoilage.+ +Abnormal loss+ would be pretty tough to define. If jobs exceed the estimated costs of production, then you gotta' figure out why before you can call that spoilage. The estimate may not have been appropriate, the job may not have come in as spec'd, there may have been equipment failures, somebody may have taken a nap on the job... If jobs consistently overrun the estimated costs of production, then I'd say that the estimates aren't appropriate in that they aren't based your production capabilities. If estimates are based on an ideal instead of what you can actually achieve, then you'll always be disappointed.

Edited by: Rich Apollo on Jun 25, 2008 9:08 AM

 

[David Dodd]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amount

Michael,

Let me answer your second set of questions first. As far as I know neither PIA/GATF nor NAPL have ratios that show what levels of spoilage are common in printing companies. The PIA/GATF standard profit and loss statement format does not have an account for "spoilage" or "rework" and that's one reason there are no ratios.

Let me suggest a slightly different way to answer your first question regarding a definition of "spoilage." Lean manufacturing defines waste as any event or condition that consumes resources but does not add value to the product/service. Back in the 1950s, Taiichi Ohno, the principal architect of lean at Toyota, defined seven categories of waste that are found in all business organizations: (1) defective products that must be corrected or remade, (2) overproduction - producing products that cannot be sold, (3) overprocessing - processing steps that aren't necessary or that don't add value, (4) excessive movement of materials or products, (5) excessive movement of employees, (6) excessive work-in-process inventories, and (7) waiting by employees created by production bottlenecks.

I believe that spoilage falls into the "defective products" category, and I definitely believe that you should track the costs associated with making defective products on an ongoing basis. I think the definition suggested by your associates is too broad. I suggest that you measure the costs associated with making defective products (cost to rework, for example) for a reasonable period of time in order to establish a "baseline" for your company. Then, you objective is to continuously reduce this type of waste. There is no level that is "acceptable."

David Dodd

 

[marvin]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amount

I have also been tasked this same thing. I feel like it's leading absolutely no where. Is there maybe a survey around? Does anyone want to share theirs?

I am currently searching for average paper waste percentage for sheetfed offset, maybe in a monthly or yearly interval. I'm assuming that those that have taken the time and effort to track this will actually be lower than industry average.

 

[prepressguru]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amount

You have started a very interesting thread.

I was asked a similar question a couple of years ago and the measurement we were considering was only plate material. I asked a few colleagues in the industry and got some basic numbers or at least a starting point and went from there. We have since been able to lower our spoilage.

The part which interests me is talking about inefficiencies. We have jobs coming through prepress with out much planning work done but asking for proofs. We constantly have to rework impositions almost right before the job is plated. We have had as many has 3 imposition changes on 1 job. So we lose all this time re working a job while other jobs sit idle. I cannot find a decent way to prove how this is costing money and time. The perception at the other end is just get it done.

The post with the seven points from Toyota is a great post.

Any thoughts would be appreciated.

Thanks

 

[jardo]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

I would check with your manufacturers, press and prepress, that you have good relationships with. They often have people paid to gather ROI's on hundreds of printers, and they can give you an average. I am thinking of one person in particular who works for Kodak and the guys head is a wealth of knowledge when you talk about spoilage and inefficiencies. If you like, please email me off line and I can get you two in touch. ([email protected])
Jeffrey J.

PS - You should start any process improvements by implementing a 5S program. It is the base foundation for ridding you entire company of waste and Inefficiencies. I would not point the finger at prepress and press operations only, more than likely, your company has issues from top management down to the floor sweeper. Good Luck

 

[Jayhawkmike]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amount

Thanks for your response! Very helpful. As the weeks have gone by, our focus has been more on "process improvement" and avoiding the word "spoilage".
Getting everyone to move in the same direction in improving our quality and efficiency is the challenge. In a production environment, the "spoilage" connotation brings out the finger pointing. The process improvement initiative brings out ideas.

 

[gordo]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amou

"Managing by the Numbers" booklet from PIA/GATF order #1832 contains some spoilage info - "unexpected spoilage" defined as the number of sheets of paper in a job lost in production due to quality prblems after makeready divided by total number of acceptable sheets.

As an example, for a run of 2001-5000 the median spoilage is 2.7%

best gordo

 

[marvin]

Re: Spoilage definition, ratio w/ sales, and what can be an "expected" amount

Process improvement is a great direction to go. Good luck with all that. There are already great examples in this thread with 5S and TPS/lean.

Also, thanks for the find Gordon. I will try and look for more information on that book.