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Process Management Approach Reduces Scrap, Saves Alcoa Millions

by Janet Jacobsen

As Alcoa Power and Propulsion sought to minimize manufacturing process waste, inefficiency, and related expenses, two key findings caught the attention of the business unit’s executive leadership team:

  • Customer satisfaction surveys revealed 60 percent of respondents held an unfavorable or neutral opinion of the unit
  • Internal quality measures revealed the business unit recorded the highest levels of scrap in the organization for the year

The findings represented a significant opportunity, but improvement would require rapid deployment in a methodical, deliberate, and sustainable manner.

Case Study At a Glance . . .

Process Management Approach Reduces Scrap, Saves Alcoa Millions

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-A team at Alcoa Power and Propulsion sought to improve product quality, reduce waste and inefficiency, and cut costs.

-To achieve these goals, the team developed and implemented a structured process management approach across the business unit.

-By defining and then standardizing key processes, the unit minimized variation, shared best practices, and sustained improvements.

-The project improved customer satisfaction, reduced costs of poor quality, and saved millions of dollars.

-The team was named a finalist in ASQ’s 2015 International Team Excellence Awards competition.

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Alcoa Case Study

About Alcoa Power and PropulsionAlcoa Logo

Alcoa Power and Propulsion (APP), a unit of New York City-based Alcoa Inc., is divided into three segments: structural castings and special products, industrial gas turbine airfoils, and aerospace airfoils. This business unit serves the defense, energy, aerospace, and industrial markets, where its products are used in military and commercial aircraft engines as well as power-generation turbines. Additional products and services include molds, hot isostatic pressings, specialty coatings and tools, as well as machinery. APP operates 25 production facilities around the world, employing more than 9,000 people.

Working to Improve Processes

The APP leadership team discovered scrap and rework issues were resulting in high customer claims and delivery issues, therefore they sought solutions for significant reductions to scrap levels to improve delivery, rework, and customer satisfaction.

In the past, substantial scrap level decreases were thought to be unattainable because casting is a particularly complex process (see the sidebar, The Investment Casting Process, for more details) with many sources of variation.

In late 2011, APP’s quality focus shifted toward sustainable and continuous process improvement, particularly at nine of the unit’s super alloy foundries (five in the United States, three in Western Europe, and one in Japan). While these foundries were the starting point for the initiative because they recorded the highest levels of scrap, the ultimate goal for APP was to create a sustainable solution for deployment at the plant level by mid-2012.

The right solution would need to capture and communicate tribal knowledge as well as monitor capable processes. Creating a new approach could directly impact financial performance by reducing scrap, rework, and returns.

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Identifying Stakeholders and Building the Team

One of the first steps in forming a project improvement team was to identify stakeholder groups from which team members would be selected. The following stakeholders were included:

  • Internal groups: engineering process owners, business unit and site managers, operations personnel, and members of the quality staff.
  • External groups: Alcoa and the business unit’s customers.

Once these groups were determined and the required knowledge and skills for each group identified, skill and knowledge gaps were identified. For example, the engineering process owners needed training on the DMAIC method, while the quality group required additional training on the audit process. Corporate quality staff provided introductory training on the organization’s process management methodology, and APP created a Six Sigma training class for its engineers.

It made sense to build upon already-existing team structures and working relationships at APP where there are business unit process owners and corresponding plant process owners. The improvement project’s deployment team included members from these process owner groups.

The project goal was to develop a sustainable methodology to reduce the APP scrap rate by 10 percent year over year by June 2012, as depicted in Figure 1. The team was to develop manufacturing process models for key areas, validate the methodology at pilot locations, and then prepare a full implementation plan.

Alcoa CS Fig1

Analyzing the Opportunity

When analyzing the improvement opportunity at hand, the team quickly realized the part-focused scrap reduction methodology, which had been used for years, reached the point of diminishing returns. To achieve the additional scrap reductions required to meet the stated goal, process stability became the new focus.

Since the investment casting process includes several complex steps, the team created process maps to identify, understand, and analyze each step for its savings potential. Pareto charts helped illustrate the contribution of each step to the overall scrap rate. Brainstorming, scrap rates, and defect data were used to identify potential improvement opportunities within the process. In addition, the team utilized scrap rates at each APP location to search for potential savings.

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About the Author 

Janet Jacobsen is a freelance writer specializing in quality and compliance topics. A graduate of Drake University, she resides in Cedar Rapids, IA.

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