Efficient Material Usage

Efficient material usage adresses the complete process within each company, starting form purchasing and procurement to the avoidance of scrap and rework. The share of material cost decides the importance of material usage as a productivity lever in your company.

Purchasing defines the principles and processes of procurement. To find out whether or not these are efficient needs the same approach as any business process. On the other hand an important share of factor cost may be reduced by means of effective supplier management. The method of material group management (MGM) is a promising approach to direct material cost reduction.

To guide the material to where it is needed in a timely manner is the task of effective shop floor logistics. Apart from production planning and scheduling this includes above all the inventory management.

Dedication to error prevention reduces cost for scrap and rework, both of which represent a waste of material. The goal is to avoid errors before they occur instead of wasting material.

It is no new insight that 80 percent of the manufacturing cost is fixed by design, a large share of it do to the material spec. That is why increasing material cost may make a complete redesign recommendable. With the intention to substitute costly materials a technology review is a promising approach. It is sometimes surprising to discover the opportunities of new manufacturing technologies to help challenge design decisions of the past.

Take for example the case of a railcar manufacturer. Once the decision was made to die cast a piece part, very little could be done about direct cost. But it is worth to challenge these decisions, especially if product life cycles go beyond 5 years.