Performance-based pay vs. Defective products
At a rubber vulcanization plant, there was a noteworthy surge in the manufacturing of defective products. There were no “noticeable” changes in the circumstances. They found no objections in the quality of the raw materials, all parts of the machine were in order and they made no adjustments to the manufacturing process.
Then what explains the great number of defective products?
The OEEm industrial data collection system was implemented for the production machine, which records real-time data for cycle times (start-stop), vulcanization time as well as the pressure and temperature values measured during production.
Subsequent to the analysis of the data, it transpired that the mid-shift vulcanization times were shorter, preventing the machine from manufacturing the products according to specifications. The vulcanization time can be adjusted with a button on the side of the machine, which is in easy reach of the operator.
It’s important to know that prior to the increase in defective products, the company adopted a performance-based payment scheme for its workers. In light of this, the foreman quickly figured out that in order to increase the number of products manufactured in their shift, the employees reduced the vulcanization time. However, this led to the manufacturing of defective products.