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Re-manufacturing Just in Time

 

PART II. 

 

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 part specification.

Another challenge was to determine where the parts should be reworked (outside supplier, or within Manufacturing).

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.

Benefits:

— Actual moneys not spent by the corporation for new buys

— Less inventory needed for safety stock due to reduction of leadtime

— Less scrap of product at end of life

JIT Remanufacturing

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.

Reporting

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.

Accounting Processes

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.

Benefits Realized

• 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 headquarters?

• 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.

Summary

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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