Leaving money on the table…

On the subject of drawing tolerances, many organizations leave a lot of money on the table.   This is an important area from both cost reduction and quality perspectives.  Here’s a question for  you:  How does your organization assign tolerances?

Common approaches for tolerance selection include the following:

  • In some organizations, tolerances are based on the nominal dimension.  Dimensions up to 1 inch might get a tolerance of ± 0.001 inch, dimensions up to 5 inches might get a tolerance of ± 0.01 inch, and everything above 5 inches might get a tolerance of ± 0.05 inch.  This makes the designer’s work easy, but it is a poor practice.
  • In some organizations, tolerances are based on decimal places.  If the designer specifies a nominal dimension of, say, 1.000 inch (3 decimal places), the tolerance for might be ± .001 inch (all 3-decimal-place dimensions are assigned a ± .001 inch tolerance).  If the designer specifies a nominal dimension of 1.00 inch (2 decimal places), the tolerance is ± .01 inch.  The tolerances are restricted to fixed steps, and it’s not likely the steps correspond to fit, function, or process capabilities.
  • In some cases, designers assign tight tolerances to parts in an effort to improve quality.  This practice is misguided and builds unnecessary cost into the product.
  • In some cases, the designers assess how the parts fit together, what the parts have to do, and how the parts will be manufactured, and base the tolerances on these factors.

That last approach is the best approach.  Based on our observations of many organizations, though, it’s not what usually happens.

Cost Reduction Opportunities

The best point for reducing cost is during the design process.   A good approach is to include the manufacturing folks in the design process, assess the production approach as designs emerge, and identify processes and process capabilities for each part.  It’s the engineering organization’s responsibility to select dimensions and assign tolerances that will assure fit and function; it’s the manufacturing organization’s responsibility to raise a red flag where tight tolerances mandate expensive processes or a high likelihood of nonconformances.

If you didn’t do the above during the design process any you have tightly-toleranced parts in production, you can still reduce cost by targeting unnecessarily-tight tolerances.  Here’s a recommended approach:

  • Talk to your QA and manufacturing people.   They’ll be able to identify parts and dimensions that cause frequent rejections.   Where this situation exists, evaluate relaxing the tolerances.
  • Look for “use as is” dispositions on nonconforming parts (trust me on this…your manufacturing people will know where this is occurring).  If a “use as is” disposition is the acceptable, it’s likely the tolerance on the nonconforming dimension can be relaxed.
  • Talk to your purchasing folks.   They can reach out to the supplier community and ask the same kinds of questions.   This is a particularly important area to explore, because in most manufacturing organizations approximately 70% of the cost of goods sold flows through the purchasing organization.  You may not know without asking how many parts your suppliers are rejecting; all you’ll see are the costs buried in what you have to pay for the parts.   The best way to ask the question is the most direct:   What are we doing that’s driving your costs?  The suppliers know, and they’re usually eager to answer the question.

All of the above is associated with cost reduction, but that’s not the only place where inappropriately-toleranced parts create problems.  In many cases, dimensioning and tolerancing practices can induce system-level failures.    That’s another fascinating area, and we’ll address it in a future blog entry.

Would you like to know more about cost reduction opportunities you act on right now?  Consider our cost reduction training programs, or take a look at our most recent book, Cost Reduction and Optimization for Manufacturing and Industrial Companies!

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2 Responses to “Leaving money on the table…”

  1. carl mungenast Says:

    Straight forward, logical, common sense!
    Well written and valuable information. Well done.

    • Thanks very much, Carl. Coming from a guy with your background (retired Sears division president and retired Consolidated Freightways chief operating officer), your comments are particularly appreciated.

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