While most of the industry has a handle on recording manufacturing scrap costs, relating that costs to a machine failure is seldom done. You will need to incorporate your current reporting methods into your CMMS and/or EAM software so that the relationship can be analyzed. Also, the existing method of calculation will need to meet the TDC recommendations below.

The amount of scrap produced, and whether or not it's recyclable at that stage of the production will be recorded in other TDC categories such as Equipment / Start-up cost. (Start-up cost records the amount of normal scrap generated each time machine is taken out of or placed back into production.)

The Equipment / Start-up cost category is also where you would calculate the actual dollar value per scrapped product, in relation to that stage of the production. This scrap category is where you record the amount of scrap not covered in other categories, that is directly related to equipment failure and maintenance operations.

The cost per product of re-work at various stages of production will be calculated and recorded in the Labor / QC category. That cost per product will be multiplied by the number of products needing to be reworked due to downtime.

Some causes for scrap are related directly to downtime...

Examples from the above table...

While these examples may be placed under more than one example area, the important point is that the scrap should be recorded and related to the downtime occurrence in this "Downtime/Scrap" category.

 A closed loop control board on an extruder fails.... all parts made until the machine stopped were too thin (scrap).... minor hardware failures which take hours or days to diagnose and repair.

It is accepted by operators, every time machine speed is adjusted while running, one part is scrapped. But in accordance with manufacturers, this should not be occurring. Therefore indicating a machine problem.

Scrap per hour produced because of the problem temporarily being band-aided till scheduled repair. Also, scrap is produced while performing band-aid repair on the machine. True Band-aid costs are important to track, as they are deceiving when weighing the decision as to full repair or just band-aids.

While new equipment is being installed, as long as production is not stopped, scrap costs can be overlooked. This area should be addressed during the planning and monitored during the actual installation. There is also the unplanned occurrence of accidents, such as the forklift bumping a running machine while moving equipment. Also slowing or stopping production due to traffic by the installers. All the different aspects of an installation can affect many areas of downtime cost, and they add up quickly! This area of the cost will be covered in more detail when we launch our new site OEMStandards.com

Consider this example of the cost related to maintenance procedures and human error. A maintenance person makes an adjustment on one shift but does not record what was done. This adjustment could have increased the scrap rate for three shifts until that person returns to work the next day.

The unwillingness of maintenance personnel to "accept ownership" of the system.

Run till failure:

Usually, before such a radical practice is adopted, detailed analysis, including scrap predictions are performed. But if the growing scrap rate in relationship to the end of life of part was not considered, you will need to reconsider your run till failure policy.