This article looks at waste and material management in wire and cable manufacturing. It defines material waste and how excess waste production and inefficient material management can impact the bottom line.
Examples of controlling material waste are highlighted, allowing readers to identify opportunities throughout the production process to make improvements.
The article highlights how software can help with material management and reduce waste, examining:
- What is material waste?
- How material waste can be controlled.
- How material waste can be minimized.
- How technology can help reduce waste.
Material waste costs money
It might be obvious, but it’s a crucial point to begin this article: material waste costs money. For example, raw materials typically form 70%-80% of the selling price for wire and cable products. But in wire and cable businesses, the world of cash and finance can be dislocated from the business functions that determine how much material is wasted.
Waste may be hidden in:
- Over-specified designs
- Inefficient purchasing
- Embedded in wire and cable products sent to customers as over-size or over-length
Visible waste — the material that ends up in skips — is evident to all. Still, even there, costs can be hidden if the segregation and separation of materials to improve the value of scrap or facilitate their recycling are not taken into account.
Material cost considerations need to be assessed at each of the decision points that determine or affect how much and which types of materials are to be consumed.
What is material waste?
Material waste is the cost of any materials consumed in excess of what is required to satisfy a customer’s minimum requirements. Some examples of material waste are:
- Over-designing a cable such that its physical parameters provide a physical performance in excess of the customer demands and/or the specification.
- Selecting raw materials that have a performance and a cost that is greater than that required to meet a customer’s requirements.
- Manufacturing product above the minimum specified dimensions of the design through part of its length or the entire length: thickness, diameter, weight.
- Producing scrap due to poor management of the length of raw materials, semi-finished products and finished products.
- Producing scrap by manufacturing non-conforming products that fail quality controls.
- Producing scrap by inefficient changeovers and unnecessary changeovers.
- Not recycling materials when it is possible to do so (note: this only recovers part of the wasted cost as the time to produce waste in the first place costs money).
- Not managing waste streams effectively allows unnecessary contamination and mixing of materials, which degrades the value of waste.
- Not selling waste at the optimum price.
When a specified material costs more than assumed in the costing exercise, a material price variance is not waste. Some commercial contracts will allow for variation in some materials, e.g., metals. The costs of non-metals, e.g., polymers, may be flexed less frequently based on oil prices.
How can material waste be controlled?
To control something, it needs to be measured, then analyzed, and finally, action needs to be taken. To be most effective, actions must occur as close to the moment of conversion or usage of raw materials as possible.
Consider the value chain of a wire and cable business:
- Understand the customers’ requirements.
- Translate requirements into a design.
- Produce a costing.
- Manufacturing the cable to the design.
- Despatch the agreed length, or lengths, to the customer on the specified drum and with the specified packaging.
- Manage waste.
Customers’ requirements and design
A customer may quote a specific national or international standard that has to be followed by the designer: there may also be additional customer requirements. Standards typically draw on the nominal dimensions of the different components from which a cable is formed. Standard geometric formulae established over many years are used to calculate the size, volume and weight of a cable’s components.
A designer must ensure that the final design is fit for purpose. Ultimately a cross-sectional drawing or 3D representation of it can be produced along with charts of dimensions and the standard weights per unit length of its components and hence the weight, and length, where relevant, of the raw materials. This can then be costed per unit length.
Businesses have an opportunity for competitive advantage when designing cables: exploiting a high degree of internal process capability. For example, a business with excellent statistical control of its processes knows how much material it needs to use to achieve a specific physical, electrical or optical parameter and can design toward the theoretical minimum.
Cable designers may interpret specifications differently, could apply formulae differently, and could, therefore, produce unnecessary design variants. Variants in dimensions of raw materials, e.g., tapes, dimensions of sub-components, e.g., insulated cores, usage of polymers, e.g., different grades of PVC, all add complexity and variety, which can embed waste in a business.
Cable design policy should be clearly defined for a business, whether single or multi-site and cable designs should be held in databases. Standard raw materials and sub-components should be stored in the database and shared with the business’s enterprise resource planning (ERP) system.
A costing needs to be calculated on the latest costs for raw materials or if any are known to be changing the future cost. Prices for raw materials for wire and cable do move up and down with commodity prices, and sometimes these changes are managed contractually. A cable business can choose to pass on price increases or hold prices. This should be driven by policy.
Costings also typically include allowances for scrap. These are generally derived empirically over the years and are applied as a percentage, e.g., 2%. A business knows that whatever the standard weight of cables, an allowance of an additional 2% has been added to allow for scrap, as, historically, that has been the overall weight of scrap measured across weigh-bridges in skips versus the weight of materials procured.
In addition, there may be an extra allowance for over-usage (sometimes called “giveaway”), or just loss, based on mass-balance calculations. A mass balance compares the quantity of raw materials procured versus the quantity of finished cable sold, adjusted for changes in intermediate and finished product stocks.
Manufacturing the cable to the design
Design parameters are communicated to production and quality control staff via job cards, specification sheets, and, if the business can, electronically via business and manufacturing execution systems (MES). In addition, direct communication of cable design criteria and process settings may be downloadable to process machinery via integration with PLCs.
The supervisors and operators often manage the selection of raw materials and semi-finished products for input into a manufacturing process. For example, they may be working on an instruction about which specific drums and batches to draw from stock or, if a Kanban is being used, one chosen from any number of options.
It is also possible via barcodes to ensure that pre-defined raw materials and sub-components are selected to provide traceability and error-proofing.
An operator sets up their machine with the correct materials and process settings. Some machines have inherent waste associated with their design. This is a known quantity, or length, e.g., 10m, and is allowed for in the process design and the costing. Where good practice allows, a skilled operator may operate with less waste than that costed, but he should not produce excess waste. The waste becomes evident in inter-process skips as short lengths are scrapped, tape reels are emptied, extrusion head waste is weighed and skipped, or off-cuts are created at the final winding and testing stage.
There are measurement gauges of some form on most production lines, diameter, eccentricity, spark testers and capacitance. These may be purely for measurement or feedback signals to the machine controller so that process parameters are tuned to achieve target dimensions. Without automatic feedback, the operator must be more vigilant and adjust when necessary.
Gauges may be attached to a logger that records data through a run. This may produce statistical data such as averages and standard deviations and out-of-tolerance data such as thin walls or under or over diameter. However the data logging is completed, a quality record for each sub-component and each finished reel should be maintained. Any out-of-specification material will require a review by quality control to ensure the correct sentencing. Non-conforming products may become scrap or could be reworked. Such rework may involve the time-consuming removal of a layer and rewinding operations before repeating an incorrect process. This is expensive and may lead to short lengths. Rework can be a costly and hidden cost.
A statistical analysis regime can be applied to cable-making. This can lead to a good understanding of process capability and opportunities to shave off microns from designs that can lead to better material utilization and improved competitiveness.
Despatch the agreed length or lengths ordered by customers
Managing length is a hugely important aspect of good material usage. As cables progress through a factory, they get bigger — it’s a fact — as do the drums they are on. So ensuring that the lengths of finished cable produced are as close as possible to that required by customers, or included in catalogs, is one of the most critical factors in conserving materials. For example, an odd 20m length of good product at the end of a 500m order for a customer gives a potential 4% loss.
Managing drum stocks to minimize waste is vital for businesses that cut custom cable lengths from stock. Knowing the actual remaining length of cable on drums and fulfilling customer orders in a manner that minimizes short lengths reduces waste.
The easiest way to manage waste is not to make it in the first place! However, waste does occur. Recycling waste within the factory reduces the material cost impact of waste. Re-granulating extrusion head waste and re-feeding it into an extrusion run are commonly used. Re-granulating off-line and reusing later, e.g., polyethylene sheathing or re-compounding polymer by mixing with a black masterbatch, is employed to produce bedding layers for armoring.
Segregating different waste streams, e.g., keeping copper-related waste separate from aluminum or steel or keeping polymer or poor conductor waste separate, can improve the value of waste. Poor waste management could cost 0.5%-2% of top-line sales value, which comes straight off the bottom-line profit.
How can material waste be minimized?
Waste can be minimized by maintaining designs at the lower end of tolerances in factories that exhibit good process capability and control. Operators must ensure that their processes operate within tolerance, preferably in the bottom quartile band. They must take care to use the specified materials and only start to convert materials when their processes are fully ready. All necessary steps should be taken to avoid making non-conforming products, and if there is any uncertainty, help, and advice should be sought. Supervisors should focus on quality and waste before productivity and delivery performance — poor quality decimates results on all other measures.
Businesses should know the quantity and source of all material waste and its cost. Projects to correct common root causes should be set up regularly, and their outcome should, wherever possible, eliminate the root cause of issues.
An oft-missed opportunity is the reverse-engineering of a business’s products and those of its competitors. Dissecting cables, comparing the different layers in the construction, and assessing any differences in design or manufacturing provide valuable intelligence. Design, materials, and processes are constantly changing. Maintaining a historical database of comparisons can provide short-term improvements and enable any changes in competitors’ samples to be spotted.
The volume of parameters that affect quality and waste is high, and the business processes that affect waste across all business functions. Therefore, managing data in a business-wide system and database is almost a prerequisite for larger sites and businesses. Data shared throughout a business and used in a standard manner provide a foundation for quality. They should form the basis of a long-term strategy for minimizing waste and keeping it under control. Using systems to provide feedback loops at the point of selection, consumption, and conversion of raw materials and semi-finished products reduces the chances of error and corrects usage for variations. Independent quality control and statistics provide the required checks and balances and information for targeted improvements.
Ensuring the value of different waste streams is known by the relevant staff, and reinforcing it, should be one of the critical activities of a management team. It is one of the main levers they can pull to maintain and improve profitability.
Can technology help reduce waste?
Designed specifically for the wire and cable industry, CableMES leverages the power of the world-leading System Platform by AVEVA, which brings reliable and flexible technology and utilizes the extremely powerful Historian tool capable of collecting any process data.
Users can correlate this data with process and quality alarms to an exact length of cable produced to identify trends and provide long-term improvement benchmarks. Historian and CableMES come with a wealth of reports which allow management to take a strategic view of the business and to drill down to the cause of any event.
As well as the savings in waste, cost reductions from CableMES can often come from making more efficient use of existing employees’ time through automated reports, accurate data handling and sign-offs.
Reducing the cost of scrap with non-conformance alerts
Consider the costs associated with discovering non-conformance too late. The scrappage of an entire reel would be costly enough. Added to that the outlay of rearranging shipping as well as committing machines and operators to a second run and the cost rises exponentially. CableMES early warning system flags any such warnings at the earliest stages of the production process.
With increased competition, the margin for profitability may already be slim, and a manufacturer can ill-afford any issues that add to the cost of sale through rework or late delivery penalties. Without an MES, the production team has little opportunity to identify non-conformance issues until later in the process and sometimes only after a product has left the building.
Along with its non-conformance alerts, CableMES’ prioritization of Work in Progress (WIP) allows the factory to concentrate efforts on the most time-critical and profitable production, easily identifying bottlenecks, maintenance issues, under-utilized resources and hidden capacity. CableMES also ensures full accountability for all shifts ensuring seamless shift handovers.
Quality benefits gained from CableMES:
- Quality plan auto-generated from CableBuilder Enterprise
- Full traceability of non-conformance
- Automated quality recording
- Real-time alarms and historical trending
- Full accountability for all shifts
Optimal resource management
Ordering too much stock presents an issue for storage and cash flow; too little and there’s a risk of running out and reneging on customer delivery commitments. CableMES knows what material needs to be used for the production of a particular operation.
Each material to be used is scanned using a barcode scanner. The items going into the machine are matched against those in the bill-of-material (BOM), enabling products to move through the production process as quickly and efficiently as possible while maximizing labor and machines.
CableMES’ real-time stock inventory is compelling enough. Yet coupled with theoretical vs. real analysis on material consumption and machine speeds, it provides the production team with their greatest insight yet into capacity planning.
The easiest way to manage waste is not to make it in the first place. Material waste is the cost of any materials consumed in excess of what is required to satisfy the customer’s minimum requirements.
Wire and cable manufacturing will inevitably incur costs attributed to waste. However, appropriate systems, processes, and procedures must be implemented to minimize this waste and manage materials much more effectively.
A thorough understanding of the customer’s design requirements and specifications is needed to filter down to ensure accurate design and costing processes. Over-specified designs and the subsequent inefficient purchasing add unnecessary costs. For example, visible scrap from oversized or over-length products is costly. Still, the hidden costs of not managing and calculating waste segregation and separation procedures before recycling are factors that should not be ignored.
Measuring and analyzing all production elements will help monitor material usage and identify areas for improvement.
Effective communications across departments ensure design parameters are adhered to at every stage, and gauges to help tune parameters to achieve target dimensions ensure accuracy.
Conserving materials can be achieved by carefully managing length. For example, lengths of finished cables should be as close as possible to that required by the customer or included in catalogs.
- Material cost considerations must be assessed at each product manufacturing point. It is essential to determine, or affect, how much and which types of materials are to be consumed.
- Implementing effective measurement and analysis procedures to control waste will help identify what action is needed. Action needs to happen as close to the moment of conversion or raw material usage as possible to ensure maximum effectiveness.
- Careful consideration must be given to the entire value chain.
- Understanding customers’ requirements and the subsequent designs that follow specified standards.
- Implement a high degree of internal process capability, e.g., excellent statistical control of processes enables a much clearer view of what material is needed and by what quantity.
- Cable design policy, held in a central database, should be clearly defined for a business to prevent unnecessary design variants such as differing interpretations of specifications and varying applications of formulae.
- Ensure costings are calculated using the most recent raw materials costs.
- Include allowances for scrap when costing.
- Ensure clear communication across production and quality control staff.
- Apply a statistical analysis regime to ensure a good understanding of process capabilities.
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