Rework Legal Definition
The cost of the rework was calculated at $250,000 over a two-week period, and all costs were covered by the Tier 1 provider. In any case, we must avoid unnecessary retouching. Does your product or service meet the requirements? Do you check the right properties to ensure these requirements are met? It`s time to revise your control plan and review your key process input and output variables. Realignment is less of a concern in the case of lump-sum agreements where the contractor receives a lump sum for the delivery of a completed project. In such cases, the Contractor will be compensated for the results once the Work has been accepted by the Project Owner (the “Sponsor”). The more alterations it takes to get acceptance, the lower the gain for the entrepreneur. The flat-rate contractor protects himself against the costs of recovery by including the estimated costs of alterations in his fixed price. Is there anything positive to rework? Yes, but only if we take advantage of it to better understand our products and processes. We can rethink or reconfigure to reduce the likelihood of non-compliance and thus improve our robustness.
Often, the terms rework and repair are used incorrectly or interchangeably. The main differences between rework and repair are subtle but important to understand: understanding what rework is and, most importantly, how to avoid rework activities makes perfect economic sense. Let`s explore further. Fixing something to meet its functional requirements that should have been correct the first time requires valuable resources and disrupts your process flow. Your downstream customer simply wants the right product, process, or service, and every time you rework to meet requirements, no value is added to the output. Yes, when we apply Lean principles, we evaluate all non-value-added steps in our processes. If we create defects or need to rework our products or services, these activities are considered waste. No, there are subtle but important differences between rework and repair. Redesign is an action on a non-compliant product or service to meet requirements.
Repair is an action taken on a non-conforming product or service to make it acceptable for its intended use. There are a few basics that help us understand how and why reshuffling can creep in. Let`s take a look at some of them. Customers are usually only interested in the product or service they receive, not how much effort it took you to implement it, or how many times you`ve had to change or revise it to get it right. Would you like to work on the Rework line this week? This can greatly demotivate product processing and review, which can quickly eliminate employee pride in their work. It`s a much better effort on the part of your employees to understand and correct the cause of your touch-up activity. Example: A car tire must be inflated to a pressure of 3 bar and be free of damage that can lead to deflation. It was found that the tire was inflated to 2.7 bar and free of damage, that the tire had been reworked at a pressure of 3 bar and that the tire met its requirements. Regarding the 8 lean waste, if we produce a defective (non-compliant) product or service, we can either rework it or dispose of it. If we choose to rework, any related activities required to restore product or service compliance will not add value. The customer does not recognize this trade-in work and is not willing to pay for it.
The associated costs, often referred to as non-compliance costs, are borne by the supplier, which has a negative impact on profitability. After careful review and investigation of the assembly process and FMEA review of the process and critical control characteristics, it was possible to determine the cause of the non-compliance. The speed of the assembly line has been changed so that the assembly can be completed correctly the first time and each time, and the temporary inspection and recovery line can be removed. A major Tier 1 supplier to the rail industry has received a new order for the supply of hub bearings. The bearing technology was new, but had proven itself through durability and functional testing using prototype test parts. Thanks to prototyping, the final assembly process was developed and optimized, eliminating costly rework. It is essential that functional specifications and requirements are fully met after the completion of the trade-in. Reshuffling before delivery to the customer (sometimes called internal rework) hurts your costs and employee motivation.
Often, reshuffling after delivery to the customer (sometimes also called external rework) is even more damaging. Here we have both the impact of rework costs and reputational damage, with the likely consequences being lower customer satisfaction and loyalty. Reducing, or better yet, eliminating the need to rework is implicit in a Lean Six Sigma approach. Let`s look at some of the disadvantages of the redesign and even think about a potential benefit. Regardless of our product, process or service, we do not gain a competitive advantage by introducing and supporting retouching activities. Focus on shooting right the first time and every time, staying ahead of your competitors and increasing customer satisfaction and loyalty. Due to the volume of parts required by the customer, it was necessary to install a temporary inspection and recovery line next to the final assembly line. The costs associated with inspection and rework were significant, but none of the costs could be passed on to the client. We must not accept rework as a natural result of our product, process or service.
Basically, something is wrong or isn`t well optimized, and we need to investigate where and why this is happening so we can implement changes.