March/April 1993
SPC is an increasingly popular weapon in the quality crusade, and some scrap recyclers are finding it useful—even necessary.
BY JEFF BORSECNIK
Jeff Borsecnik is assistant editor of Scrap Processing and Recycling.
The Saturn Division of General Motors Corp. (Spring Hill, Tenn.) recently warned its suppliers that it will charge them $500 for each minute of car-production time lost due to problems caused by supplies—including ferrous scrap and secondary aluminum alloys—that are delivered late, are improperly identified, or fail to meet quality standards.
This announcement was yet another warning that American industry today is serious about quality—and getting more serious. More and more manufacturers are demanding that their suppliers institute rigorous quality-assurance programs that require them to regularly hand over detailed statistical reports on their production processes and submit to periodic quality-control audits. At the heart of many of these programs is statistical process control (SPC), a detailed technique designed to identify and eliminate threats to quality in any production process.
Gaining Control
The foundation of SPC was developed in the United States in the 1920s by physicist Walter Shewhart, who believed that statistical analysis was the key to uniform production and improved quality, and created the control chart, a graphic representation of the variation in a process that is the key to SPC (see "Control Charts—The Soul of SPC ," below).
W. Edwards Deming, SPC 's most famous proponent, drew from Shewhart's work and led efforts to use SPC methods to improve the quality of U.S. war material production during World War II. After the war, however, Deming's statistics-driven quality methods were overwhelmed by American industry's drive for quantity of production, and he found a more eager audience for his theories in Japan, where industry and government leaders sought to erase the stigma associated with the "Made in Japan" label. SPCcaught on so well there that Emperor Hirohito later credited Deming for the rebirth of Japanese industry, which the United States —and much of the world—now look to for tips on quality.
In practice, SPC aims to improve product quality by measuring and controlling the production process. It uses data collected during production to identify the causes of defects, building statistical charts to plot variations from the "ideal" in the process. When those variations threaten product quality, action is taken to correct the problem. In essence, SPC determines if a process is in control—that is, operating within acceptable limits—and it aims to narrow that operating variation to an optimal level, improving the quality and consistency of the product.
SPC does not give up its benefits easily, however. It is a tedious technique that requires the involvement of both managers and line employees—those closest to the production process—to help identify and correct problems.
SPC and Scrap Recycling
Applying the technique to a manufacturing process—such as the production of parts machined to specific physical tolerances—is a well-documented, seemingly straightforward process, but what about using SPC in the scrap business, where products are less homogenous and quality less-easily measured?
While some scrap experts suggest that SPC is simply not the right technique for the industry, others say that it can be applied to almost any recycling operation, given a little creativity. More important, some major scrap consumers are requiring their scrap suppliers to use SPC as part of larger quality-assurance programs, so its validity in the scrap industry may be a moot point to those who want the business. As one example, Louis Padnos Iron & Metal Co. (Holland, Mich.)—which claims the honor of being the first scrap processing operation to receive Ford Motor Co.'s (Dearborn, Mich.) Q1 Preferred Quality Supplier award—began using SPC to satisfy Ford, says Bill Clay, Padnos's vice president of operations. Today, Clay estimates that 10 to 15 percent of the firm's consumers require it to use SPC techniques and report SPC data, and these consumers account for as much as half of the firm's business.
That said, how can recyclers make SPC work in scrap processing operations? SPC 's scrap practitioners note that one important first step is identifying measurable, or "key," characteristics that define a product's quality in the consumer's eyes. This, says Jefferey Plonski, who handles quality control and other responsibilities for Reserve Iron & Metal (Cleveland), requires communication with scrap consumers to find out "what problems they've experienced and don't want to experience again, and what their goals are." At Reserve, this information is recorded in objective terms on specification sheets kept on file for every one of its consumers. "There's no more `But I thought you wanted ... ,'" says Plonski. "This goes a long way in making the production process easier to handle."
Thorough inspection of all incoming scrap is an equally important step to using SPC effectively in recycling plants. Through vigilant inspection, quality threats related to scrap purchases are stopped at the processor's front door. At Padnos and Reserve, inspection goes beyond visual checks to include careful sampling of all incoming material from every supplier. Padnos, for instance, segregates all incoming scrap by material type and separately analyzes each pile of 2-foot busheling, turnings, borings, and other segregated scrap. This information points out characteristics that tell the firm which loads are ideal for certain consumers, Clay says.
Reserve, which also began using SPC to satisfy Ford, begins its analyses with samples acquired and tested before material is even purchased, followed by testing upon delivery, during processing, and before shipping. Detailed written procedures describe what action employees should take if problems are identified at any stage in the process, and test results are promptly available so that potential problems can be corrected before any inferior material is shipped.
While these may sound like overwhelming requirements, Plonski says, the toughest part of Reserve's SPC program has been getting foundries and mills to believe that it's possible to make a scrap yard an exact operation. Once the system is up and running for a while, it takes effort to maintain it, he says, but the company is able to accomplish this by "giving it a very high priority in the organization and talking about it in meetings."
Learning to Love SPC
While some scrap recyclers admit they use SPC merely because some consumers require it, others are more enthusiastic. Padnos was not thrilled about SPC when it initially began to use it, Clay says, "but as you get into it, you can see its value. When you have to keep checking against standards, you have to pay closer attention to what's going on"—and that attention pays dividends. Once in the habit of collecting, charting, and analyzing statistical data, the firm began to track other factors affecting its production, such as equipment downtime, the temperatures of mill bearings and other key parts of processing equipment, even the weather. "We've learned so much from doing this stuff, things we thought we didn't have to pay attention to in the past," says Clay.
Scrap executives also emphasize that SPC can help them:
Meet consumers' needs. Reserve uses SPC techniques to rigorously monitor the chemical content of its scrap to "make sure the end consumer is getting the proper mix it needs" and to tailor its products to specific consumers, says Plonski. "As a result, we've probably reduced the range [of product variability] by 20 percent, zeroing in more accurately on what our consumers want." In some cases, SPC can even help processors stay a step ahead of their consumers, says Clay. "We know that consumers that use mixed-cast scrap have a problem with environmental rules and lead contaminating their holding ponds and their baghouse dust. Even though we haven't been required to control lead, we want to tell the customer we can control lead in material and provide the data to prove it."
On the supplier side, Plonski notes that SPC has helped Reserve identify suppliers of troublesome materials, which has enabled it to avoid such problems by not buying from those parties again.
Attract new consumers. Demonstrable use of SPC is reassuring to some consumers, particularly those that must produce products for their consumers that require reporting of quality data. (Some quality programs seek the participation of suppliers at several levels.) Clay suggests that consumers are especially attracted to quality control supported by a written record. "There may be 15 shredders between me and the buyer," he says, "but if the others aren't providing this information, the consumer will come past the others to get to me."
SPC can, in fact, give recyclers a marketing edge, some processors claim, enabling them to prove that they can provide a quality product that meets strict specifications. In addition, SPC can help recyclers prove to auditors related to programs like Ford's Q1 or to the ISO 9000 standards—the quality standards of the International Standards Organization ( Geneva )—that they are committed to quality improvement.
Develop product confidence. "If the system works, we identify any problem before it leaves our gate," says Plonski, adding that Reserve "can go back and trace any railcar to any consumer and know with a high degree of certainty what we've sent them." Clay says the SPC information Padnos compiles has enabled it to defend itself from rejection threats. In one recent incident, he recalls, the firm was notified that several railcars of its shredded scrap were being rejected because the material reportedly had too much copper. Padnos knew better. "We had the numbers to show them," Clay says. "We were looking at $35,000 to $40,000 if we were wrong. We knew the scrap was OK, so we could be assertive and say they were wrong. If we didn't have a paper record for 18 months, the consumer could say, `Hit the road.' Now, the consumer must give us the benefit of the doubt."
Information gleaned using SPC can also ensure that scrap recyclers are buying and selling exactly what they want, as well as paying and charging appropriate prices, notes Fisher's Wall.
Boost operating efficiency. SPC and its emphasis on controlling the production process "has helped us formalize our yard operations, made us look at them in economic terms as to what is efficient and what isn't," says Plonski. "It's really helped us run more efficiently." Bottom line: The firm's operating costs have not risen in the past two years.
By allowing careful tracking of production levels, SPC can help firms identify equipment problems before quality or production are seriously affected. Padnos's monitoring of current flow in the motors of a shredder's separation system, for example, can identify problems before they would otherwise have been noted. When readings begin to move out of an acceptable range, the operator will try to identify the problem, Clay explains. In many cases, something is restricting flow in the air classifier. "It used to be that we would fill the cyclone two-thirds full before we found there was a problem, and then we'd have to spend most of a day digging it out, losing production time," he says. "I can't remember the last time we had to do that."
SPC 's emphasis on documented procedures can also improve operating efficiency in other ways, note processors. "We've established procedures on everything—how to run the spectrometer, how to clean, how to burn, how to load a truck, how to turn the shredder on, so a guy that's new or in training can go look at a board, review procedures, and know what he's doing," says Brenda Wall, quality manager for Fisher Steel and Supply Co. (Muskegon, Mich.), which relies on SPC to track the quality of the aluminum scrap it sells to Ford as a Q1 supplier.
Improve employee performance. Because SPC tends to give workers greater responsibility—often including the power to stop an operation if SPC data identify quality problems—they often become more serious about their jobs and see their direct role in making a quality product. "We keep our people actively involved at all phases and, to a certain degree, make them responsible for the quality of what they are doing," says Gary McLaughlin, quality control manager for State Metal Industries Co. Inc. (Camden, N.J.), which uses SPC to track and control the quality of the aluminum alloys it produces. "Our employees respond positively. They're a lot more aware that there's a customer out there, that they're not just making a bundle of ingot, so to speak." Moreover, SPC 's focus on finding solutions to production problems encourages employees to think and be creative, which motivates them to go "the extra mile," says Clay. "And the difference between a successful operation and a marginal one may be whether the employees go that extra mile. Are they committed to working?"
With all these advantages going for it, Clay predicts that resistance to SPC in the scrap industry will eventually be overcome. "Five years from now," he says, " SPC will be standard operating procedure, like keeping track of your electric bills and other costs." Indeed, scrap processors who are already applying SPC in their operations see the process as a potentially valuable weapon in the quality crusade, especially for those armed with a bit of creativity, a willingness to commit resources, and a desire to keep up with—or stay a jump ahead of—their consumers.[END]
Editor's note: For more information on SPC, ISO 9000, or other quality-related topics, contact the American Society for Quality Control, 611 E. Wisconsin Ave., P.O. Box 3005, Milwaukee, WI; 53201-3005; 800/248-1946; 414/272-1734 (fax). For a closer look at Q1, see "The Quality Quest" in the March/April 1991 issue of Scrap Processing and Recycling.)
Control Charts—The Soul of SPC
SPC is based on the use of control charts, which track key measurements in a production process using two related graphs. An example of a control chart, in this case one used by Fisher Steel and Supply to track the copper content of scrap painted-aluminum siding as recorded by spectrometers, is pictured at right. The top graph, called an X-chart, has a horizontal line running across it that represents a process's "average characteristic"—in this case, average copper content, marked as CL. Above and below that line, and parallel to it, are lines that mark the upper and lower "control limits" ( UCL and LCL, respectively) that define the maximum allowable range of variation from the average. An X-chart can be used for plotting measurements of sample products from any production process. The other graph, an R-chart, is similar, but it is used to record the range, or variation from the average, for each measurement recorded on the X-chart.
Control charts are used to keep track of how close to perfect an operation is running and signal the need to make adjustments if the measurements begin to trend toward the upper or lower control limits, ideally before these limits are exceeded. If a measurement goes beyond the limits, the process is stopped and adjustments are made. SPCalso involves other—sometimes much more sophisticated—charts and statistical analyses —J.B.
SPC is an increasingly popular weapon in the quality crusade, and some scrap recyclers are finding it useful—even necessary.