Situation:  Analyzed the market and identified a supplier to partner with to increase capacity and component economics.  Contracted with supplier to invest in additional tooling in a way to secure financing of the added capital and amortize costs over an extended period.  A root cause analysis of the total cost of supply for the partner’s operations was done which revealed that yields were being impacted by unplanned tooling failures.  This led to a high cost of poor quality.

Finding:  Root cause analysis revealed that steel inclusions were causing most of the unplanned tooling failures.  These failures were resulting in constant overtime by high cost tool makers.  The root cause analysis pointed to poor steel quality.

Solution:  Working with the supplier’s procurement organization, higher quality steel sources were identified although all were more costly than the incumbent source.  However, the economics showed that the increased productivity of the equipment, increased tool life, predictive tool replacement and quick change would significantly improve yields and costs.

Result:  The result is that that the steel component quality was significantly improved resulting in fewer failures of the finished product and the increased production capacity coupled with supply demand forces reduced the cost of quality by 50% and eliminated the existing supply shortage.