The Shocking Truth About "Cost of Quality"

When I talk with people in their shops we often get into discussions about “quality.” Of course the pursuit of CNC machining quality is a never-ending quest for most of us. While we all agree about the importance of quality, I think we often underestimate the true costs that multiply quickly when quality is not maintained in manufacturing processes.

To be sure, “the devil is in the details”, as they say. But for machine tool users “the devil is in the scrapped parts.” Contrary to popular belief, this is not an unavoidable cost of doing business. Let’s begin exploring Cost of Quality by looking at the potential impacts of one scrapped part.

The Ripple Effect

To keep the math simple, let’s say you produce a part that costs you $100. When a scrap part comes up in your production run, a common reaction is “darn, I just lost $100 on this job.” But there’s a ripple effect of costs that make this scenario much more costly. Here’s where the costs begin to add up:

• Scrap part = $100
• Cost for making the replacement part = $100

Now you’re in for $200, doubling your cost, which is bad enough. But it gets worse. The waves from this ripple get bigger as they expand throughout your business.

• Running a part twice on your machine slows down the rest of your run
• If you’re scheduled at 100% capacity for that day, and new work pieces are waiting to be run, then your actual run for the day may be only 95%
• A vicious cycle begins, where your work center, that’s supposed to produce a certain amount of dollars for you, is producing less money over time

More Waves

It gets worse yet! There are MORE costs to consider for this single scrapped part. Do you have enough material on hand? Do you need to expedite materials? This adds the costs of purchasing, receiving and shipping. If the cost of tearing down and resetting the machine is prohibitive, you now have a machine out of commission, making no money. It could be minutes. It could be days. Add $125 per hour (the average shop rate in North America) to your cost tally.

The shocking truth about the ripple effect is:
One scrapped part costs at least three times as much as one quality part.
 

Managing Your Cost of Quality

Cost of Quality* is a much-discussed topic, and it’s even more complex than what I’ve begun to describe here. The primary goal, of course, is to satisfy your customers with quality parts while keeping your own costs as low as possible. This is where using advanced CNC machining technologies can make a big difference. Here’s a starter list of preventive measures you can implement to manage Cost of Quality:

• In-Process Probing: Okuma’s OSP-P control makes it possible to integrate inspection probes from Blum, Marposs or Renishaw (members of Partners in THINC). These probes work with the control to create a closed loop inspection process that monitors part quality, makes adjustments to tool offsets as necessary, re-cuts the work piece, and re-verifies it using the same probe.
• Tool Monitoring: Partner Caron Engineering provides tool monitoring that can stop your tool before it goes into a condition that would damage a work piece or yield an unacceptable specification (such as size or finish), based on historical data for running your parts.
• Thermo-Friendly Concept: This Intelligent Technology from Okuma maintains CNC machining accuracy over long periods of time by automatically measuring and compensating for unavoidable thermal changes. With Thermo-Friendly Concept operators don’t need to continually adjust offsets to compensate for thermal changes.

Avoid This “Most Dangerous” Mindset

If you’ve ever met me, you probably know it doesn’t take long for me to start talking about Cost of Quality. That’s because this is what makes the difference between a thriving business and one that eventually has to close their doors because they can’t stay competitive. In these conversations I often get pushback, “but we’ve always done it this way.” In my opinion, this is one of the most dangerous phrases known to man! Be open to evaluating Cost of Quality, be aggressive about adopting CNC machining technologies to manage it, and you’ll find yourself winning bids and growing your business.

Kyle Klaver is Sales Engineer, Okuma America Corporation.

*For more information about Cost of Quality visit the American Society for Quality website.