Getting Lean on scrap

eKanban focuses manufacturers on reducing inventory, lowering cycle times, and helps best practice operations reduce scrap as part of continuous improvement efforts.


Every year manufacturers lose profits when they scrap materials and finished goods because of damage or obsolescence. The cost of scrap is far more than the cost of material itself. Hiding behind every dollar of scrapped inventory are several more dollars lost in storage, productivity, customer satisfaction, and potential revenues.

eKanban software can address many of the common causes of scrap and allow manufacturers to apply Lean principles. As a cornerstone of Lean manufacturing since the 1950s, most manufacturers are aware of the Kanban process (even if it's not implemented fully in the manufacturing facility).

Manual Kanban systems replaced by eKanban

Manual Kanban had several disadvantages, including the physical movement of the signals (cards) through the facility. It was easy for those cards to get damaged, lost, or misplaced. The more SKUs managed, the more error prone. eKanban software solves this situation by replacing the physical cards in the manual process with an electronic signal. Those who use them typically replace manual Kanban processes with an eKanban system when exceeding 200 SKUs.

Because there is less physical movement in an eKanban system, the number of steps required can be reduced drastically. One manufacturer reduced the number of steps in its replenishment process from 66 to six by replacing its manual Kanban process with eKanban software. With fewer steps, learning to follow the process also takes less time, as well as reduces the chance of human error.

Reducing inventory and lowering cycle times

eKanban focuses manufacturers on reducing inventory and lowering cycle times. It also helps best practice operations reduce scrap as part of continuous improvement efforts. There are several reasons a manufacturer might need to scrap materials, including work in process (WIP) or finished goods. Defects can be introduced by damage that occurs during handling or storage. Materials may expire and no longer be fit for use. Alternatively, they may become obsolete as demand for a particular part subsides or when new and improved materials become available.

Damage during storage

Overproduction is the main cause of excess material. WIP and finished goods remain unused for extended periods of time. eKanban is the fundamental principle that nothing is produced until needed. Following this basic principle of pull manufacturing reduces excess finished goods and WIP inventory.

Time spent in queue

Rarely is the time spent in queue calculated, yet it represents as much as 80% to 90% of cycle time in a facility that has not applied pull-replenishment policies. Queue time is the ability to increase flow through a manufacturing facility. It also means materials and WIP spend less time piled up in front of a work cell where they may be damaged.

Metric queue turns

Queue turns equal produced hours divided by queue hours. "Queue turns" is a measure of how often the queue in front of a resource turns over within a given period. That covers WIP and finished goods inventory, but supplier inventory also must be addressed. Because eKanban signals are electronic, it is much easier to extend pull-replenishment practices to suppliers as well. Reducing raw materials inventory also decreases time spent in storage and the likelihood of damage or obsolescence.

With a supplier eKanban, external suppliers receive replenishment signals just like internal suppliers. The external suppliers then fulfill these orders against a blanket purchase order or other long-term agreement, providing a streamlined process that expedites fulfillment and greatly reduces the amount of paperwork involved.

A supplier communication portal provides real-time visibility of order status and delivery dates to the manufacturer and the supplier, making collaboration possible and optimizing supplier performance management.

The ability to automatically resize the number of Kanban loops based on current order demand, supply status, and the realities of the shop floor ensures accurate 24/7 data. When demand goes up, the number of eKanban loops increases so that production automatically responds to the increase in orders. The same is true when the demand goes down.

Expiration management

One of the practices many manufacturers put in place when they implement eKanban is strict adherence to first-in, first out, or FIFO. eKanban signals can direct personnel to the appropriate lots or locations so those items received in inventory first are the first consumed.

This function drastically reduces scrap in most facilities. In Lean manufacturing, scrap (defects) is one of the eight areas of waste, suggesting that it is an issue for many manufacturers and should be included in overall continuous improvement efforts. Many manufacturers are so busy focusing on lowering inventory levels and meeting delivery dates that scrap levels often are overlooked.

Kirk Studdiford is the director of Client Services for Synchrono. He is recognized as a leader in establishing creditability with manufacturing operations, supply chains, and IT leaders. Throughout his career, Studdiford successfully has implemented a wide variety of technologies emphasizing the merits of Lean and demand-driven manufacturing principles.

This article appears in the Applied Automation supplement for Control Engineering and Plant Engineering.

- See other articles from the supplement below.

Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
November 2018
2018 Product of the Year finalists, mild steel welding: finding the right filler, and new technique joins aluminum to steel.
October 2018
Tools vs. sensors, functional safety, compressor rental, an operational network of maintenance and safety
September 2018
2018 Engineering Leaders under 40, Women in Engineering, Six ways to reduce waste in manufacturing, and Four robot implementation challenges.
October 2018
2018 Product of the Year; Subsurface data methodologies; Digital twins; Well lifecycle data
August 2018
SCADA standardization, capital expenditures, data-driven drilling and execution
June 2018
Machine learning, produced water benefits, programming cavity pumps
Summer 2018
Microgrids and universities, Steam traps and energy efficiency, Finding help with energy projects
October 2018
Complex upgrades for system integrators; Process control safety and compliance
November 2018
Analytics quantify processes, Fieldbus networking and IIoT, Choosing the right accelerometer

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Material Handling
This digital report explains how everything from conveyors and robots to automatic picking systems and digital orders have evolved to keep pace with the speed of change in the supply chain.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Design of Safe and Reliable Hydraulic Systems for Subsea Applications
This eGuide explains how the operation of hydraulic systems for subsea applications requires the user to consider additional aspects because of the unique conditions that apply to the setting
click me