Is Cost Reduction a Necessity ?

This is a Cost Reduction Exercise that we have completed 6 years back in a Rubber Extrusion Factory. Due to the cost pressure of materials, the boss, Mr. Wong has requested us to optimize their materials wastage. After working with Mr. Wong & his production team, we have successfully completed this project within two and a half month. We would like to summarize this success story as per below :

Key Focus :

Optimize the utilization of scrap.

Project Target :

90% of the scraps are recycled within the same day.

Project Scope :

Rubber Extruder Section

Focus of Improvement :

No recycling of scraps at 30 – 40 bags/day. (Increase of Input Expenses/month)

Improvement Action :

Action 1 : Recruit 2 full-time staff on scraps crutching.

Action 2 : Restructure the reporting system of rubber extruder & crutching section.

Action 3 : Curb the trend of high absenteeism among staff.

Action 4 : Increase the frequency of specification monitoring from hourly to 30 min.

Action 5 : Make maintenance staff responsible for their setups by fixing each staff with 2 – 3 rubber extruders machine.

Impact of Improvement :

  • Increase the scraps recycled at the same day up to 93%.
  • Drop of raw material cost utilization up to 16.9%.
  • Reduce the labour cost (time) of sorting out scraps.
  • Scraps have dropped from 34 bags/mth to 18 bags/mth.