Dispositioning of Parts
This was a task in itself to have Engineering
assign a disposition of repair, not economical to repair, or not
repairable in a timely manner.
Once the part was dispositioned rework
instruction needed to be identified for ETN (Equivalent-To-New),
which is defined as:
Units that have been previously used in a
StorageTek product which have critical electrical and mechanical
components identified in the individual ETN procedure are to
be inspected, replaced, and/or remanufactured and retested such
that the unit becomes equivalent to a new purchase in quality,
reliability, functionality and cosmetically as governed by the
Another challenge was to determine where the
parts should be reworked (outside supplier, or within
Today the disposition of parts is now included
within the PMP (Program Management Process).
Resistance to Change
We are all resistant to change, but this process was a
challenge in that a security blanket was being
removed for Marketing and Manufacturing as the defective material
was used for "just in case" inventory.
Some of the actions taken to overcome the resistance were:
• Several presentations were given to upper
management for buy-in and then to the workers with the benefits
to the process.
— Actual moneys not spent by the corporation for new buys
— Less inventory needed for safety stock due to reduction
— Less scrap of product at end of life
Once the system and process were in place
several challenges were met:
• Repair and new build being completed on
same manufacturing line to save expenditures of capital
equipment causing confusion. Labels were created to indicate
repair versus new.
• Accuracy of inventory—flex repair parts
were being taken from the line for other requirements. A cycle
count process was developed in the repair suppliers (inhouse and
outside). An education process was also needed to have a good
understanding that flex parts were not to be taken unless
personnel was notified.
• Rework within 10 days was not easily met.
Some adjustments of customer supplier agreements were made.
Reports were developed for aging and tracking
of the parts to ensure accuracy within the process.
Reports were developed to forecast defective
returns as well as requirements for those returns. These reports
were effective in forecasting capacity as well as completing
Customer Supplier Agreements with the repair suppliers.
Defective parts were consigned to the suppliers
to be repaired at a percentage of the standard cost.
Any part that was scrapped during the process
was charged to product maturity.
"Cost effective to rework" is
reviewed periodically to ensure corporate business goals.
• Saved $3.4 million in expenditures for new
assemblies to the corporation since 1990.
• Reduction of defective warehouse inventory
or 17 weeks of defective returns (see Example 1).
• There has been no increase in stocking of
parts in the field locations when there has been an increase in
the box count.
Where Are We Today?
As in any project of this size, cross
functionality changes can be seen for the future. Many ideas have
been seen such as:
• By using the multi-warehouse function for
the distribution of parts, could direct ships to our customer be
completed from our repair suppliers without coming back to
• Should a separate facility be built to
repair parts for the corporation and use less outside suppliers?
A cost justification will need to be completed.
In implementing JIT for Remanufacturing, there
have been some challenges, hard work, and a big cultural change
for the corporation and the suppliers. This process has proven
to be successful in winning the competitive war by reducing
leadtime and inventory, as well as resulting in bottom line cash
savings for our customers..
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