Indirect Material Cost Reduction by Eliminating Manual Derailing Process through Process Simplification

Abstract

This paper will discuss how to reduce (IDM) Indirect Material consumption for derailing process by eliminating the manual derailing method as part of cost saving project. It involves the removal of cutter blade used for derail.Cost improvement was one of organizational goals of the company for 2019. This drive can be supported by analyzing Indirect Material spending and process simplification at assembly plant. At assembly End-Of-Line processes, derail cutter blade was one of the top Indirect Material spending at singulation and there is an opportunity to reduce if not eliminated the cost consumption of derail cutter blades through process simplification. Increasing volume in Quad-Flat-No lead (QFN) packages and new banner products being develop by New Product Integration NPI, Q1’20 means increase in IDM consumption per process. The challenge is to drive a process simplification that will reduce IDM to save cost by start of Q2’20. DMAIC methodology was used to improve the process of derailing process.