The Hidden Cost Audit /

“The most dangerous kind of waste is the waste we do not recognize.” – Shigeo Shingo

Innovation and Productivity improvement HAS to be part of our manufacturing culture if we are to survive these highly competitive times. Productivity improvement comes from eliminating all the sources of waste associated with the manufacturing process. Innovation comes from the implementation of new methods or processes that yield more optimal results. Its identifying the hidden opportunities that can be the challenge.

Waste in the context of LEAN has been defined as “useless consumption or expenditure; use without adequate return.” Productivity is maximized when all useless consumption or expenditure is minimized. The trend towards bringing manufacturing back to North America has been in large part due to our society’s ability to embrace new innovations while working to try and minimize wasteful practices. We need to be relentless in our efforts to use innovation to minimize waste.

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The Hidden Cost Audit (HCA)

The purpose of this audit is to identify all the various sources of waste associated with how manufacturers select, manage, maintain and dispose of their industrial fluids. Fluid condition is very dynamic, and its dynamic nature is what makes the potential for waste so significant.
Too many companies suffer from the past, where past events have defined their current day to day practice. The problem is, that often the true root cause to the past event was never really determined, so instead of using the event to gain a deeper understanding of the process, many companies use time based PM programs to try and blanket the problem. Blanketing the issue however is extremely wasteful, since it makes the decision to take action based on a factor that doesn’t really drive performance and cost.
Wasteful PM’s is just one example where companies suffer from wasteful practices. Another is not managing enough of the Key Performance Indicators that drive cost and performance. Most facility’s fluid management programs only look at one or two KPI’s to manage the process, ignoring the others that can leave the process or people at risk, and offer no solid means to identify and quantify continuous improvement and waste minimization.
The Hidden cost audit looks at a number of different sources of waste to determine how well fluids are being managed and maintained on a day to day basis. Once the various sources of waste are identified and quantified (where possible), the hidden cost audit then looks to identify specific innovative solutions designed to reduce the total cost by eliminating wasteful activities.

The Outputs

Our on-site assessment of your fluid systems combines fluid analysis, infra structure review, consumption and waste data compilation as well as current plant practice to put together an overall profile of your facility. We look at the factors that drive fluid and waste costs as well as analyse the fluids to identify how closely the fluids are managed to their desired control plan, and if the control plan includes many of the analyticals that impact process performance, cost and risk. The analysis is compiled and presented to management with a summary of current condition. The next step is our Future State NavigatorTM a process we use to outlines the specific steps required to reach and predict the costs associated with a future state.

Next Steps

Productivity improvement through Innovation comes from knowing where your current waste lies. Our 3rd party evaluation allows us to apply our unique expertise to your current process to see where the opportunities are for cost reduction, productivity improvement and risk mitigation.

The HCA audit is an unbiased opportunity to evaluate your current Fluid Use Process to see how establishing a best practices program with innovative tools and technologies can help reduce costs, manage risk and address the root cause issues that are negatively impacting plant productivity, process availability or product quality. Following a very methodical approach, the HCA follows a defined business process to identify the sources of waste that are negatively impacting your plant. For more information on the various sources of waste that the HCA helps to identify, request our White paper on the 7 Major Sources of Hidden Waste that are Eroding both your productivity and profitability in a Parts Manufacturing Environment.

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