A Problem in Materials Economy

A. G. Sterling
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A. G. Sterling: Metals & Controls, Inc., a Corporate Division of Texas Instruments Incorporated

Management Science, 1962, vol. MT-2, issue 2, 108-116

Abstract: This paper describes a study of several factors influencing the cost of a particular raw material blank, the policy changes based on this study, and the cost reduction accomplished by means of these changes. This general approach may be employed to reduce the raw material cost of a variety of machined components. The operation in question was to purchase hot rolled metal blanks and from these to machine closely dimensioned plates. To allow for process variabilities and to assure sufficient material removal to yield a high quality finished surface, we bought blanks thicker, hence heavier, than the finished plates. The material was expensive and the machining chips were not recoverable, so this excess blank weight represented a substantial annual cost. To minimize this loss we considered reducing the process variabilities, sorting blanks to narrow the range released for machining and to divert the others to less critical applications, and reducing the minimum thickness of blanks selected for machining, tolerating some loss due to machining rejects with the expectation that this would be outweighed by the reduction in cost of the average blank machined. As a result of these studies we were able to reduce the blank weight 8%, thus reducing our material cost for this single component more than $50,000 per year. "Management Technology", ISSN 0542-4917, was published as a separate journal from 1960 to 1964. In 1965 it was merged into Management Science.

Date: 1962
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