One way to keep your production costs low – and your profitability high – is to take care about your scrap rate. Scrap rates measure the failed assemblies or production of an output product which cannot be restored in relation to the total. Reasons for scrapping can be exemplary poor raw or input materials, careless set up procedures, faulty machinery or ineffective production operators.
As a consequence, you might not produce enough goods to fulfill all customer orders and loose sales volume. Through checking on high scrap rates certain product or production group production managers can try to find the root causes for it and take the respective measures to overcome the negative impact.
The ‘Actual Scrap Rate (%)’ KPI sets the scrap quantity in relation to the total yield and scrap quantity.
With a click on the tile, you get more details showing the alerting values, reference and a chart view.
A production manager can identify the product category with the highest scrap rate and start analyzing further from here.
With changing to the more detailed view, it shows the Year/Month, site and output product category along with the Actual Scrap quantity and the Yield Quantity.
Here we see that in the last two month the scrap rate was especially high and both product categories were affected.
With the Analyze Data Button, you can display all detailed data, for example drill down to the aspect of the output product or the production order. The Add Field functionality was used to include the product category which is derived from the product and the Year/Month display which is aggregated based on the production end date.
Set up of the KPI ‘Actual Scrap Rate (%)’:
The KPI is based on the “Yield and Scrap” standard report (SCMYASU01_Q0001) with the key figure Actual Scrap Percentage which you can find in the “Production Control” work center for production managers. In order to adapt the report views and selections for your needs you can do the changes in the “Business Analytics” work center in the Design Reports view.
In the Business Analytics work center under the Design KPI’s view, you can also create and change KPIs. In the following can you see the settings for the Actual Scrap Rate (%) KPI:
a.) General Tab: Here you use the views and selections from the “Yield and Scrap” report such as the selection for the last 3 months from today. The calculation explanation of the key figure you find here.
b.) Values and Thresholds: Here we used fixed values for target and relative reference value related to last year.
For this example, the target is set to 3 (%), a warning is displayed over 5 (%) and alerts beyond 10 (%). You might want to adapt this to your needs.
c.) Additional Contexts: These are additional report views you want to display in the KPI.
d) Filter: If you want to use KPI Filters to create KPI variants, the site or product category might be useful.
This blog post is part of a series of blog posts introducing KPIs for process monitoring and optimization purposes Process Monitoring and Optimization KPI’s.