Making the Case for Quality
Process Management Approach Reduces Scrap, Saves Alcoa Millions
• A team at Alcoa Power and Propulsion sought to improve product quality, reduce waste and inefficiency, and cut costs.
• To achieve these goals, the team developed and implemented a structured process management approach across the business unit.
• By defining and then standardizing key processes, the unit minimized variation, shared best practices, and sustained improvements.
• The project improved customer satisfaction, reduced costs of poor quality, and saved millions of dollars.
• The team was named a finalist in ASQ’s 2015 International Team Excellence Awards competition.
At a Glance . . .
As Alcoa Power and Propulsion sought to minimize manufacturing process waste,
inefficiency, and related expenses, two key findings caught the attention of the
business unit’s executive leadership team. Customer satisfaction surveys revealed
60 percent of respondents held an unfavorable or neutral opinion of the unit, while
at the same time, internal quality measures revealed the business unit recorded the
highest levels of scrap in the organization for the year. The findings represented
a significant opportunity, but improvement would require rapid deployment in a
methodical, deliberate, and sustainable manner.
About Alcoa Power and Propulsion
Alcoa Power and Propulsion (APP), a unit of New York City-based Alcoa Inc., is divided into three segments: structural castings and special products, industrial gas turbine airfoils, and aerospace airfoils. This business unit serves the defense, energy, aerospace, and industrial markets, where its products are used in military and commercial aircraft engines as well as power-generation turbines. Additional products and services include molds, hot isostatic pressings, specialty coatings and tools, as well as machinery. APP operates 25 production facilities around the world, employing more than 9,000 people.
Working to Improve Processes
The APP leadership team discovered scrap and rework issues were resulting in high customer claims and delivery issues, therefore they sought solutions for significant reductions to scrap levels to improve delivery, rework, and customer satisfaction. In the past, substantial scrap level decreases were thought to be unattainable because casting is a particularly complex process (see the sidebar, The Investment Casting Process, for more details) with many sources of variation.
In late 2011, APP’s quality focus shifted toward sustainable and continuous process improvement, particularly at nine of the unit’s super alloy foundries (five in the United States, three in Western Europe, and one in Japan). While these foundries were the starting point for the initiative because they recorded the highest levels of scrap, the ultimate goal for APP was to create a sustainable solu- tion for deployment at the plant level by mid-2012. The right solution would need to capture and
by Janet Jacobsen
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communicate tribal knowledge as well as monitor capable processes. Creating a new approach could directly impact financial performance by reducing scrap, rework, and returns.
Identifying Stakeholders and Building the Team
One of the first steps in forming a project improvement team was to identify stakeholder groups from which team members would be selected. The following stakeholders were included:
• Internal groups: engineering process owners, business unit and site managers, operations personnel, and members of the quality staff.
• External groups: Alcoa and the business unit’s customers.
Once these groups were determined and the required knowledge and skills for each group identified, skill and knowledge gaps were identified. For example, the engineering process owners needed training on the DMAIC method, while the quality group required additional training on the audit process. Corporate quality staff provided introductory training on the organization’s process manage- ment methodology, and APP created a Six Sigma training class for its engineers.
It made sense to build upon already-existing team structures and working relation- ships at APP where there are business unit process owners and corresponding plant process owners. The improvement project’s deployment team included members from these process owner groups.
The project goal was to develop a sustainable methodology to reduce the APP scrap rate by 10 percent year over year by June 2012, as depicted in Figure 1. The team was to develop manufacturing process models for key areas, validate the methodol- ogy at pilot locations, and then prepare a full implementation plan.
Analyzing the Opportunity
When analyzing the improvement opportunity at hand, the team quickly realized the part-focused scrap reduction methodology, which had been used for years, reached the point of diminishing returns. To achieve the additional scrap reductions required to meet the stated goal, process stability became the new focus.
Since the investment casting process includes several complex steps, the team cre- ated process maps to identify, understand, and analyze each step for its savings potential. Pareto charts helped illustrate the contribution of each step to the overall scrap rate. Brainstorming, scrap rates, and defect data were used to identify potential
The majority of APP’s business is related to its investment casting process, which includes the following steps:
• APP receives a design from one of its customers, and through a collaborative process, the proper shape of the casting is determined.
• A die is constructed, usually in wax, to produce the pattern.
• This wax die is then assembled into a cluster to produce multiple castings economically through a single pour of molten alloy.
• The wax cluster process continues as a ceramic slurry is applied, followed by ceramic sand, and then into the controlled drying step until the desired shell thickness is achieved.
• The wax is then melted out and the resulting shell is fired to create a hard ceramic ready for casting. Selective insulation that eliminates casting defects, such as micro-shrinking, may be applied at this point before the shell proceeds to the casting stage.
• During the casting step, metal is melted under vacuum to maintain purity. Once melted, the mold is loaded through a vacuum-lock system.
• After the mold is cast, the gating is removed and the castings move through the post-cast operations and quality inspection.
• Once approved, the certified casting is shipped to the customer.
THE INVESTMENT CASTING PROCESS
This is the casting portion of the investment casting process.
Year 2011 2012 2013
Figure 1: Desired Scrap Trend Across APP
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improvement opportunities within the process. In addition, the team utilized scrap rates at each APP location to search for potential savings.
Scrap by point-of-cause data was analyzed within each process area to determine which processes held the greatest savings potential. In addition to pinpointing spe- cific processes for improvement, quality tools such as Pareto analysis were also useful in determining which plants to tar- get for early implementation.
At the outset, the project scope was quite broad—global business unit scrap reduction—a hefty challenge. After reviewing the data and securing buy-in from leadership, the improvement team narrowed the scope to focus on the great- est opportunities—the wax, shell, and cast manufacturing operations of nine
selected locations. Although the scope was now more narrowly focused, the challenge was still immense, requiring the engagement of the entire operation. At this point, team membership grew to include additional process owners, engineers, quality staff, operations, and leadership personnel from plants involved in the project.
Because the nine APP locations for this improvement initiative were located around the world, it was imperative to create a cohesive language that could tie all the foundry processes together. This common language was necessary for not only deploying the methods and tools, but also identifying the key operations and sub-processes at various plants for comparative and benchmarking purposes.
Process-mapping exercises, shop-floor interviews, brainstorming sessions, and benchmarking studies generated data to help develop potential solutions. The data was first used for comparing Alcoa plants with similar processes and improvement requirements. The com- pany saved $20 million at seven Alcoa plants that had implemented process management initiatives. These results inspired the improvement team to pursue a similar approach within APP.
The left portion of Figure 2 depicts a typical plant-based approach to process improvement where efforts are confined. In contrast, the right side of Figure 2 shows how an integrated approach involving plants throughout the BU enables the sharing of approaches with common templates and coordinated plant projects. The new approach would
Figure 2: Potential Implementation Approaches for Process Management Directive
Coordinated pilot plant projects
Pilot efforts well-supported Ef cient local leveraging
Common process map template
Integrated BU-wide approach
Independent plant projects
Wasteful duplicated efforts Poor leveraging
Independent process maps
Traditional plant-based approach
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leverage one plant’s independent ideas by sharing its solutions across the entire business unit to spur global improvement. This business-unit approach also enabled process owners to transfer technical details through a common language that was lacking in the past, and to build a collaborative culture.
The team developed a three-stage plan to implement its process management approach. The first stage involved pilot plants; the second fast-follower plants; before finally, implementation to a broad business-unit approach. This three-stage rollout provided data that team members used to validate the efficiency and speed of the shared and integrated approaches.
The key to incorporating solutions throughout the busi- ness unit was a structured, common process model, which incorporates the tools recognized as the best-suited means to get processes in control, and to identify key operations and sub-processes at multiple plant locations. Utilizing this process management approach, as illustrated in Figure 3, would increase sustainability through manage- ment review, quality audits, rigorous control plans, and a focus on the correct variables.
The process management solution was validated through the pilot and fast-follower stages. For example, one of the pilot-stage plants deployed a new casting/mold wrap process and demonstrated a 30 percent reduction in related scrap in just three months. Then a fast-follower plant used the same new process as the pilot plant and achieved similar scrap reduction results, but this time within just 30 days. This demonstrated that lessons learned at one plant advance the process management efforts at other locations when similar process improve- ments are implemented.
Identi�cation of key processes and process managers
Audit and management
Sustain the gains
In control, capable, and sustainable
Figure 3: Alcoa Process Management Approach
During the team’s initial analysis members discovered a few areas of resistance, including:
• Concerns regarding the availability of resources, particularly the ability for employees to handle the new initiative while still meeting production goals.
• Stakeholders at various levels lacked a sense of urgency and showed some hesitancy about making changes.
• Because the process management approach was a nontraditional method for reducing scrap, a change in culture would be essential to inspire employees to embrace the new process-focused method.
The team understood providing information and education was vital to achieve positive change, so the process management model includes routine communication such as holding team-building meetings and shar- ing monthly process audit databases. Resistance was also mitigated by engaging the entire workforce in the new process management approach. Examples included employees who helped by defining improvement opportunities, planning and prioritization activities, participating in kai- zen events, as well as establishing and executing control plans.
Exceeding Goals and Realizing Additional Benefits
Once the pilot and fast-follower stages were completed, APP imple- mented the process management model throughout the business unit. While the initial project goal was to reduce scrap by 10 percent year over year, those expectations were exceeded by more than $20 mil- lion in improvements from the three key areas: wax, shell, and cast. Tyrus Hansen, APP team lead, said reductions in scrap and other costs of poor quality continue year over year, as highlighted in APP’s Quality Index, shown in Figure 4.
Specific examples of dramatic cost savings include:
• A 77 percent improvement in wax expenses in one department at one plant, which resulted in a $38,000 annual savings.
• A sub-process involving shell weight control to reduce material costs at one production facility resulted in a 21 percent improvement and an annual savings of $400,000.
• A sub-process of the cast/wrap step reduced scrap and rework expenses by more than 30 percent, approximately $750,000, at one location.
Not only did the new approach lower scrap rates, but it also reduced rework activities and customer returns, leading to more on-time deliv- ery and higher levels of customer satisfaction. At the outset of this project, all nine plants involved in the pilot were rated in the poor performance category, but since that time, all of the manufacturing locations have fully integrated the process management approach.
An unexpected benefit of the work was an improved workforce devel- opment. Many team members completed training and then gained
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valuable experience with basic problem-solving tools—new skills that enabled employ- ees to operate in a more proactive, process-focused manner.
Members of the improvement team learned valuable lessons throughout the project, but Hansen said the biggest lesson centered on discipline as team members realized, “If we maintain the discipline, quality will improve,” he said. “The proactive work minimizes the time spent managing problems and fighting fires.”
Sustaining the Momentum
The APP process management models for the wax, shell, and cast operations were revised to reflect the new approach. These models were deployed through the process owner group at each APP location. Results are measured and reported at the process and sub-process levels with metrics directly linked to each location’s business case. Reports and feedback soon became more proactive and process-focused rather than reactive and problem-focused as was the case before this improvement initiative.
To ensure the new process management approach remains sustainable and continues to perform to expectations, APP implemented a number of controls, including:
• The business case must drive all activities associated with this approach and the activities are measured for impact.
• A reporting structure was created to communicate specific details on a regular basis. • All efforts are recorded and included in the business unit manuals and audit tools.
As APP continued to implement the process management approach, the business unit realized further benefits, such as:
• By emphasizing control of the entire process, additional operators and supervisors are engaged in more proactive roles.
• The workforce is more satisfied and engaged due to greater stability, education, and structure.
• With fewer daily “firefighting” activities, time to focus on key process metrics for employees increases, triggering reactions before issues become scrap problems.
GOAL reduction from 2013 6.59%
Reduction from 2013 9.23%
GOAL reduction from 2012 7.74%
Reduction from 2012 17.24%
GOAL reduction from 2014 19.22%
Reduction from 2014 2.11%
Represents millions of dollars of opportunity
Figure 4: APP Quality Index Trend from 2012 to 2015 Sharing the Team’s Story
The team has devoted a great deal of time in sharing its success story with others. Within Alcoa, the model used in this project now serves as the corporate standard and is being applied at various locations and business units around the globe with similar results. The team’s effort was also highlighted at the 2014 Alcoa Corporate Process Management Network Conference and was a can- didate in the 2013 Alcoa Corporate Impact Award Competition.
At the prompting of Alcoa’s cor- porate quality department, the team entered its project into the ASQ 2015 International Team Excellence Award (ITEA) competition. The project was named a finalist, and this recognition enabled members of the team to share APP’s proven process management approach during the World Conference on Quality and Improvement.
For More Information
• For additional information on Alcoa Power and Propulsion, visit the organization’s website at www.alcoa.com.
• To learn more about this project from a team interview, watch this video http://videos.asq.org/alcoa- six-sigma-and-teams.
• To view more examples of successful improvement projects in quality, visit the ASQ Knowledge Center at asq.org/knowledge-center/ case-studies.
• Learn more about the International Team Excellence Award Process by visiting the official website at asq.org/wcqi/team-award/index.aspx.
About the Author
Janet Jacobsen is a freelance writer specializing in quality and compliance topics. A graduate of Drake University, she resides in Cedar Rapids, IA.