SCRAP REDUCTION BY USING DMAIC METHODOLOGY: A CASE STUDY OF A MANUFACTURE IN MYANMAR

Abstract

 This case highlights the study of Modern Steel Company, a manufacturer of steel building products located in Yangon, Myanmar. The scope of this study focuses on the purlin production line since it is the main product as the highest production tonnage among all the products. The company faced an issue with a high scrap rate on its purlin production line. The current scrap rate was 3%, exceeding the target rate of 1%. This problem disrupted manufacturing efficiency and effectiveness and led to increased unnecessary costs. The 3% scrap rate corresponded to approximately 22 tons of raw materials over nine months, resulting in a loss of 33 million Myanmar Kyat (MMK). The Lean Six Sigma methodology, using the DMAIC approach, helped the organization identify the problem. Data were collected over a nine-month period from the actual workplace. After using quality tools to analyze the problem, the root causes contributing to the scrap were identified as follows: Lack of dimensional specifications for the positioning of guides and rollers in the machine adjustment manual, Absence of a guiding device between the cutting station and the roll forming station, A machine design with a 1500 mm. distance between the cutting station and the roll forming station, Limited length of raw material batches and No regular calibration of the rotary encoder. After that, effective solutions were developed through a brainstorming session with production stakeholders and by implementing control strategies to prevent future scrap occurrences. The study demonstrated a significant achievement: the scrap rate decreased to 1%, as targeted. This result clearly shows that the DMAIC methodology not only reduced the scrap rate but also sustained the improvements and enhanced operational productivity.