waste

Part 4

by Roger A.P. Fielding, BENCHMARKS

In this, the fourth of our articles on waste, we draw attention to the impact of waste on the competitive position of the extruder in a rapidly changing marketplace.

The benchmark extruder is one who extrudes, finishes, and fabricates aluminum lineals, operating with a lead time—between order entry and delivery—of 3 to 4 days. How does he do this? By eliminating all waste.

The previous three articles in this series listed the sources of “waste” to be found in many extrusion operations, and provided an explanation and cure for a number of them. But why is the list so long? And how, if things are so bad in so many extrusion plants, do they stay in business? Obviously, these extruders still make a profit—in spite of their waste.

The incentive to improve one’s extrusion operations is to be found in benchmark comparisons with other extruders. Conversion cost, the total cost of converting aluminum billet into a pound of saleable extrusions, is the only meaningful measure of comparison. And comparing conversion costs with those of competitors will prove that the extruder who operates with minimum lead times also achieves the lowest conversion costs.

Many years ago, when I was working for an extruder who ran a very successful business (when measured in normal financial terms: cash flow, profit per pound shipped, return on capital employed, etc.), I questioned a competitor’s investment in new equipment. By using the tools of competitive analysis, I was quickly able to understand the potential impact of the new equipment on his business and to demonstrate its effect on his conversion costs. For, although the initial investment could be shown to substantially reduce his return on capital employed, its impact on conversion costs was dramatic, making him highly competitive in what was then a falling market for extruded products.

That is not to say that the only way forward is to invest in new equipment. On the contrary, an understanding of the sensitivity to change (including capital investments) in the market in which you operate is essential if you are to survive in this increasingly competitive environment. So also is an understanding of the sensitivity of your own conversion costs to every aspect of the conversion process from incoming billet and dies to the shipment of mill finish, painted, anodized, or fabricated extrusion product.

The previous articles identified the potential for waste caused by defects in the aluminum billet or log supplied by the prime or secondary billet producer. The first of these articles focused on dimensional problems, surface defects, and evidence of internal defects; later articles emphasized the problems that can occur when compositional and other casting defects are present. The suppliers should provide and adhere to published standards listing the dimensional and metallurgical measures of quality.

The other major input to the extrusion process—the extrusion dies—were referred to in the last article. Die suppliers and extruders should establish agreed-to standards against which the dies can be measured. Once the inputs conform to accepted standards, the extruder has only himself to blame if waste occurs.

We must assume that our previous articles on waste have resulted in the preparation of checklists for maintenance personnel and setting out the standards for the operation of the machines, including billet furnaces, billet saws or shears, the extrusion press (and its ancillary equipment), the run-out conveyor, puller(s), the cooling table, handling system, stretcher, saw table, and saw.

Because the extrusion of aluminum alloys is a metallurgical process, the temperatures of the billet, dies, and container are the critical process variables. When all three temperatures are correct, the control of the process becomes, for most common alloys, a case of controlling the ram speed.

Management of time is, as stated previously, the other variable that is entirely within the control of the extruder. The average billet cycle, calculated by dividing the total time—in seconds—available in a given year by the number of billets extruded is, for many extruders, a disappointing number. It shows all too clearly just how much time was wasted.

The second article focused on the management of time and of materials, specifically aluminum. It emphasized that the press should cycle as the manufacturer intended. That there should be minimum time wasted between pushes and at die changes. That the time taken for die trials, press system maintenance, and other stoppages should be minimized and the extrusion cycle—when the press is earning money—should be as short as possible.

Most extruders produce significant quantities of AA6063 type alloys. But many don’t come near the benchmark scrap level—which is less than 10 percent of the billet loaded into the container—resulting in the use of too many billets and the generation of excessive amounts of scrap. An audit of waste will show where it’s being generated.

Cost benefit analysis will measure the financial returns to be made by doing it right, and will show that lead time is the integrated measure of manufacturing performance.