plifications where necessary.
A detailed presentation of each of these methods and dis cussions on the results as well as limitations of each approach follow.
Method I
The reason for our examining the segregation system is
because we suspect that a particular steel processing depart ment is not conforming to the stipulated scrap segregation disciplines. The object of this exercise is to validate this statement and attempt to quantify the lack of discipline in money terms so that a case for improved control can be
Suppose we consider a particular time interval. Then during that period the processing department will have executed a
production schedule consisting of several orders. The products that constitute these orders will usually be of various steel qualities. The discards from each order should have made a contribution to the scrap stocks within each scrap category defined by the scrap code. The amounts generated within each code will, in an error-free system, be equal to the amounts actually received into the system as indicated by the scrap inventory for the department. In an error-prone system significant differences between amounts generated and amounts received are likely. The object of this exercise is to determine these differences during a sample interval and express the errors in monetary terms. The monetary unit that is most readily usable in this form of analysis is the market value of each scrap type defined by code. The losses incurred by the error prone system can then be expressed as devaluation or overvaluation of the scrap stocks.
The quantities of scrap generated within each code can be evaluated as follows.
Let = Weight of i ingot (raw material)
= Weight of i forging (processed product) S = Weight of Scrap received during time interval
* 8 ---*m*
R = Weight of Recoverable Scrap generated during time interval t0 tjj.
P = Proportion of Scrap recovered relative to total metal removed in processing,
t and t : Time markers to define the start of ao n production schedule and its termination having made m forgings,
Total Metal Removed in producing m forgings i = 1 S m P = E (I± - P± ) Sl = i L Recoverable Scrap generated in each scrap quality Q. m R P. 2 i = 1
where the range i = 1 in', excludes all sets of P^)
which do not belong to the particular category Q, and as such
To evaluate the errors in the system we determine the differ ences between the amounts of scrap generated in each quality Q and the amounts actually "received" under the corresponding quality code Q.
Let the unit price for each quality Q be C0 *
Then for each scrap quality Q, the devaluation or overvalu ation, can be evaluated as;
If the valuation error is positive then it is a devaluation, but if negative it is overvaluation.
The sum of the Valuation error for all qualities Q = 1, 2, ... n, represents the c^tcrall error of the system, using the value of stock as a monetary measure, for a given time period,
is a sub-set of complete range i = 1, qualities, Q = 1, ... n.n.
m covering all
when segregation is assumed to be at a particular level of "ineffective control" - sic.
Overall Valuation Error n 2 (R - S) . C
Q
oThe results of such an analysis carried out on the forge for a 16 'week sample schedule (29th March 1970 to 25th July 1970) are presented below.
Scrap Type Q
Price c.*
Recoverable Scrap
Arising Scrap Received
£/Ton Tons Value £ Tons Value £
Carbon 12.85 2,528 32,484.8 3,495 44,910.75 I^CR .MO 14.75 1,513 22,316.75 1,105 16,298.75 3 CH.M0 13.45 129 1,735.05 70 941.5 1 N..CRjL 17.9 12 214. G 2 H..CRl 20.6 191 3,934.6 to H* • Q ✓-y 25.2 52 1,310.4 L/NCM 17.1 286 4,890.6 207 3,539.7 1 NCM 18.4 96 1,766.4 2 NCM 21.15 594 12,563.1 705 14,910.75 3 NCM 25.7 573 14,726.1 10 257.0 Miscellaneous 14.2- 30.4 118 2,274.5 Mixed 8.0 233 1,864.0 497 3,976.0 TOTAL 6,207 97,806.6 6,207 87,108.95 Devaluation = £97,806.6 - £87,103.95 = £10,697*65, in 16 weeks Average Weekly Devaluation = £668.6/WEEK Devaluation/Ton = £10,697.65/6207
Observations on the Results from Method I
The results from this study suggest that the scrap segre gation system in force is not satisfactory. Further invest igations were carried out to IclGntify the weaknesses of the existing system. It was found that poor scrap segregation arises when scrap discards are not adequately identified or when the storage space for scrap becomes congested. The
existing method of scrap identification was to hand-stamp the scrap code, using single dies. The code is stamped when the discard is hot which results in the indentation being vulner able to erasure by surface scaling. The operative responsible for segregating scrap and routing it to respective storage areas, often finds difficulty in locating the identity on the discard and all too often the information required is illegible or incomplete. In such cases he routes the discard to a
storage area which may or may not be the correct one. To overcome this problem the HILTI identification was developed which utilises an electric embossing machine to print the
identity code on a metal plate, which is nailed on the discard using a HILTI power tool. This system is now in operation and the results so far have been satisfactory. To avoid the problems arising from insufficient storage areas, the plant management authorised the allocation of new areas for scrap bunkers.
The details of this study were published in a British Steel report a copy of which is included in the appendices (II).