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Making the Case for Quality

May 2016

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 units executive leadership team. Customer satisfaction surveys revealed
60percent of respondents held an unfavorable or neutral opinion of the unit, while
at the same time, internal quality measures revealed the business unit recorded the
At a Glance . . .
highest levels of scrap in the organization for the year. The findings represented
a significant opportunity, but improvement would require rapid deployment in a
A team at Alcoa Power methodical, deliberate, and sustainable manner.
and Propulsion sought
to improve product
quality, reduce waste and
inefficiency, and cut costs. About Alcoa Power and Propulsion
To achieve these goals,
the team developed Alcoa Power and Propulsion (APP), a unit of New York City-based Alcoa Inc., is divided into three
and implemented a segments: structural castings and special products, industrial gas turbine airfoils, and aerospace airfoils.
structured process This business unit serves the defense, energy, aerospace, and industrial markets, where its products
management approach
are used in military and commercial aircraft engines as well as power-generation turbines. Additional
across the business unit.
products and services include molds, hot isostatic pressings, specialty coatings and tools, as well as
By defining and then
standardizing key
machinery. APP operates 25 production facilities around the world, employing more than 9,000 people.
processes, the unit
minimized variation, Working to Improve Processes
shared best practices, and
sustained improvements. The APP leadership team discovered scrap and rework issues were resulting in high customer claims
The project improved and delivery issues, therefore they sought solutions for significant reductions to scrap levels to improve
customer satisfaction, delivery, rework, and customer satisfaction. In the past, substantial scrap level decreases were thought
reduced costs of poor
to be unattainable because casting is a particularly complex process (see the sidebar, The Investment
quality, and saved
millions of dollars. Casting Process, for more details) with many sources of variation.
The team was named
In late 2011, APPs quality focus shifted toward sustainable and continuous process improvement,
a finalist in ASQs
2015 International particularly at nine of the units super alloy foundries (five in the United States, three in Western
Team Excellence Europe, and one in Japan). While these foundries were the starting point for the initiative because
Awards competition. they recorded the highest levels of scrap, the ultimate goal for APP was to create a sustainable solu-
tion for deployment at the plant level by mid-2012. The right solution would need to capture and

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communicate tribal knowledge as well as monitor capable processes. Creating
THE INVESTMENT a new approach could directly impact financial performance by reducing scrap,
CASTING PROCESS
rework, and returns.

The majority of APPs business is related to


Identifying Stakeholders and Building the Team
its investment casting process, which includes
the following steps:
One of the first steps in forming a project improvement team was to identify
APP receives a design from one stakeholder groups from which team members would be selected. The following
of its customers, and through a
stakeholders were included:
collaborative process, the proper
shape of the casting is determined.
Internal groups:
A die is constructed, usually in
engineering Figure 1: Desired Scrap Trend Across APP
wax, to produce the pattern.
process owners,
This wax die is then assembled
business unit and
into a cluster to produce multiple
castings economically through a site managers,
single pour of molten alloy. operations
The wax cluster process continues as personnel, and
a ceramic slurry is applied, followed members of the

Percent
by ceramic sand, and then into quality staff.
the controlled drying step until the External groups:
desired shell thickness is achieved.
Alcoa and the
The wax is then melted out and the
business units
resulting shell is fired to create a hard
ceramic ready for casting. Selective
customers.
insulation that eliminates casting
defects, such as micro-shrinking, may Once these groups
2011 2012 2013
be applied at this point before the were determined and Year
shell proceeds to the casting stage. the required knowledge
During the casting step, metal is melted and skills for each group identified, skill and knowledge gaps were identified. For
under vacuum to maintain purity. example, the engineering process owners needed training on the DMAIC method,
Once melted, the mold is loaded
while the quality group required additional training on the audit process. Corporate
through a vacuum-lock system.
quality staff provided introductory training on the organizations process manage-
After the mold is cast, the gating
is removed and the castings move
ment methodology, and APP created a Six Sigma training class for its engineers.
through the post-cast operations
and quality inspection. It made sense to build upon already-existing team structures and working relation-
Once approved, the certified casting
ships at APP where there are business unit process owners and corresponding plant
is shipped to the customer. process owners. The improvement projects 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 methodol-
ogy at pilot locations, and then prepare a full implementation plan.

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.
This is the casting portion of
the investmentcasting process. Since the investment casting process includes several complex steps, the team cre-
ated 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

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improvement opportunities within the selected locations. Although the scope Process-mapping exercises, shop-floor
process. In addition, the team utilized was now more narrowly focused, the interviews, brainstorming sessions, and
scrap rates at each APP location to challenge was still immense, requiring benchmarking studies generated data
search for potential savings. the engagement of the entire operation. to help develop potential solutions.
At this point, team membership grew The data was first used for comparing
Scrap by point-of-cause data was analyzed to include additional process owners, Alcoa plants with similar processes and
within each process area to determine engineers, quality staff, operations, improvement requirements. The com-
which processes held the greatest savings and leadership personnel from plants pany saved $20 million at seven Alcoa
potential. In addition to pinpointing spe- involved in the project. plants that had implemented process
cific processes for improvement, quality management initiatives. These results
tools such as Pareto analysis were also Developing Solutions inspired the improvement team to pursue
useful in determining which plants to tar- a similar approach within APP.
get for early implementation. Because the nine APP locations for this
improvement initiative were located The left portion of Figure 2 depicts a
At the outset, the project scope was around the world, it was imperative to typical plant-based approach to process
quite broadglobal business unit scrap create a cohesive language that could tie improvement where efforts are confined.
reductiona hefty challenge. After all the foundry processes together. This In contrast, the right side of Figure
reviewing the data and securing buy-in common language was necessary for not 2 shows how an integrated approach
from leadership, the improvement team only deploying the methods and tools, involving plants throughout the BU
narrowed the scope to focus on the great- but also identifying the key operations enables the sharing of approaches with
est opportunitiesthe wax, shell, and and sub-processes at various plants for common templates and coordinated
cast manufacturing operations of nine comparative and benchmarking purposes. plant projects. The new approach would

Figure 2: Potential Implementation Approaches for Process Management Directive

Traditional plant-based approach Integrated BU-wide approach


Independent process maps Common process map template

Independent plant projects Coordinated pilot plant projects

Plant 1 Plant 1

Plant 2 Plant 2

Plant 3 Plant 3

Wasteful duplicated efforts Pilot efforts well-supported


Poor leveraging Efficient local leveraging

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leverage one plants independent ideas by sharing its Overcoming Resistance
solutions across the entire business unit to spur global
improvement. This business-unit approach also enabled During the teams initial analysis members discovered a few areas of
process owners to transfer technical details through a resistance, including:
common language that was lacking in the past, and to
Concerns regarding the availability of resources, particularly
build a collaborative culture.
the ability for employees to handle the new initiative while still
The team developed a three-stage plan to implement meeting production goals.
its process management approach. The first stage Stakeholders at various levels lacked a sense of urgency and
involved pilot plants; the second fast-follower plants; showed some hesitancy about making changes.
before finally, implementation to a broad business-unit Because the process management approach was a nontraditional
approach. This three-stage rollout provided data that team method for reducing scrap, a change in culture would be essential
members used to validate the efficiency and speed of the to inspire employees to embrace the new process-focused method.
shared and integrated approaches.
The team understood providing information and education was vital to
The key to incorporating solutions throughout the busi- achieve positive change, so the process management model includes
ness unit was a structured, common process model, which routine communication such as holding team-building meetings and shar-
incorporates the tools recognized as the best-suited means ing monthly process audit databases. Resistance was also mitigated by
to get processes in control, and to identify key operations engaging the entire workforce in the new process management approach.
and sub-processes at multiple plant locations. Utilizing Examples included employees who helped by defining improvement
this process management approach, as illustrated in opportunities, planning and prioritization activities, participating in kai-
Figure 3, would increase sustainability through manage- zen events, as well as establishing and executing control plans.
ment review, quality audits, rigorous control plans, and a
focus on the correct variables. Exceeding Goals and Realizing Additional Benefits
The process management solution was validated through Once the pilot and fast-follower stages were completed, APP imple-
the pilot and fast-follower stages. For example, one of mented the process management model throughout the business unit.
the pilot-stage plants deployed a new casting/mold wrap While the initial project goal was to reduce scrap by 10 percent year
process and demonstrated a 30 percent reduction in over year, those expectations were exceeded by more than $20 mil-
related scrap in just three months. Then a fast-follower lion in improvements from the three key areas: wax, shell, and cast.
plant used the same new process as the pilot plant and Tyrus Hansen, APP team lead, said reductions in scrap and other
achieved similar scrap reduction results, but this time costs of poor quality continue year over year, as highlighted in APPs
within just 30 days. This demonstrated that lessons Quality Index, shown in Figure 4.
learned at one plant advance the process management
efforts at other locations when similar process improve- Specific examples of dramatic cost savings include:
ments are implemented.
A 77 percent improvement in wax expenses in one department at
Figure 3: Alcoa Process Management Approach one plant, which resulted in a $38,000 annual savings.
A sub-process involving shell weight control to reduce material
costs at one production facility resulted in a 21 percent
Identification of Initial
key processes and improvement and an annual savings of $400,000.
assessment
process managers A sub-process of the cast/wrap step reduced scrap and rework
expenses by more than 30 percent, approximately $750,000, at
one location.
Yes In control,
capable, and
sustainable Not only did the new approach lower scrap rates, but it also reduced
rework activities and customer returns, leading to more on-time deliv-
No ery and higher levels of customer satisfaction. At the outset of this
project, all nine plants involved in the pilot were rated in the poor
Process
improvement performance category, but since that time, all of the manufacturing
locations have fully integrated the process management approach.
Audit and
Sustain
the gains management An unexpected benefit of the work was an improved workforce devel-
review opment. Many team members completed training and then gained

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Sharing the Teams Story
Figure 4: APP Quality Index Trend from 2012 to 2015
The team has devoted a great deal of
Represents millions
of dollars of opportunity time in sharing its success story with
others. Within Alcoa, the model used in
GOAL this project now serves as the corporate
reduction GOAL
from 2012 Reduction reduction standard and is being applied at various
7.74% from 2013 GOAL
from 2012
6.59%
Reduction Reduction locations and business units around the
17.24% from 2013 reduction from 2014
9.23% from 2014 globe with similar results. The teams
2.11%
19.22% effort was also highlighted at the 2014
Alcoa Corporate Process Management
Network Conference and was a can-
didate in the 2013 Alcoa Corporate
Impact Award Competition.

At the prompting of Alcoas cor-


porate quality department, the team
Actual Projected Actual Projected Actual Projected Actual
2012 2013 2013 2014 2014 2015 2015 entered its project into the ASQ 2015
International Team Excellence Award
valuable experience with basic problem-solving toolsnew skills that enabled employ- (ITEA) competition. The project was
ees to operate in a more proactive, process-focused manner. named a finalist, and this recognition
enabled members of the team to share
Members of the improvement team learned valuable lessons throughout the project, but APPs proven process management
Hansen said the biggest lesson centered on discipline as team members realized, If we approach during the World Conference
maintain the discipline, quality will improve, he said. The proactive work minimizes on Quality and Improvement.
the time spent managing problems and fighting fires.
For More Information
Sustaining the Momentum
For additional information on
The APP process management models for the wax, shell, and cast operations were Alcoa Power and Propulsion,
revised to reflect the new approach. These models were deployed through the process visit the organizations website at
owner group at each APP location. Results are measured and reported at the process www.alcoa.com.
and sub-process levels with metrics directly linked to each locations business case. To learn more about this project
Reports and feedback soon became more proactive and process-focused rather than from a team interview, watch this
reactive and problem-focused as was the case before this improvement initiative. video http://videos.asq.org/alcoa-
six-sigma-and-teams.
To ensure the new process management approach remains sustainable and continues to To view more examples of
perform to expectations, APP implemented a number of controls, including: successful improvement projects in
quality, visit the ASQ Knowledge
The business case must drive all activities associated with this approach and the
Center at asq.org/knowledge-center/
activities are measured for impact.
case-studies.
A reporting structure was created to communicate specific details on a regular basis.
Learn more about the International
All efforts are recorded and included in the business unit manuals and audit tools.
Team Excellence Award Process
As APP continued to implement the process management approach, the business unit by visiting the official website at
realized further benefits, such as: asq.org/wcqi/team-award/index.aspx.

By emphasizing control of the entire process, additional operators and supervisors About the Author
are engaged in more proactive roles.
The workforce is more satisfied and engaged due to greater stability, education, Janet Jacobsen is a freelance writer
andstructure. specializing in quality and compliance
With fewer daily firefighting activities, time to focus on key process metrics for topics. A graduate of Drake University,
employees increases, triggering reactions before issues become scrap problems. she resides in Cedar Rapids, IA.

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