Deliverables High Level Process Map...
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Transcript of Deliverables High Level Process Map...
Deliverables
• Project Charter
• High Level Process Map
• SIPOC
• SWOT Analysis
• CTQ’s (Critical to Quality Customer Requirements)
• Cost of Poor Quality
Project Charter
Project Name:
Work Order Development
Business Case:
Eliminating late Work Orders will improve on time deliveries to customers; improve production scheduling
and plant capacity, reduce errors, rework and OT, and improve customer satisfaction which will increase
margins by 2% or approximately $100,000 per year.
Problem/Opportunity: Scope, Constraints, Assumptions:
25% of work orders are late Start: Quote Stop: Hand-off of work order
to plant In-bounds: Sales, Quoting,
Design, Customer Service Out of bounds:
Manufacturing, Shipping
Goal: Team Members:
Eliminate all late work orders. Set milestones for improvement
at reduction to 10% in one month, reduction to 2% or less in
two months Deliverables: On-time
Work Orders, On-Time deliveries, Best practice procedures
Dave (VP) Champion, Denise (Customer
Service) Process Owner, Pat (Production
Manager) Team Member, Cindy
(Accounting) Team Member, Jim (Quoting)
Team Member, Richard (Design) Team
Member
Preliminary Project Plan Target Date Actual Date
Define 4/27/2009 4/27/2009
Measure 4/29/2009 4/29/2009
Analyze 4/30/2009 4/30/2009
Improve 5/29/2009 5/29/2009
Control 8/1//2009 8/1/2009
Prepared by: Paul Gormas Approved by: Dave Rettig
Deliverables:
On-Time Work Orders
On-Time Deliveries
Best Practice Procedures
Project Name: Work Order Development
Problem Statement:
The cycle time from quote to work order delivery is exceeding the 2 day standard for 25% of work orders causing inefficiencies in manufacturing and late deliveries
Goal Statement:
Eliminate all late work orders. Set milestones for improvement at reduction to 10% in one month and 2% or less in three months
Deliverables:
On-time Work Orders, On-Time deliveries, Best practice procedures
Initial Cost of Poor Quality Estimate:
The COPQ (Cost of Poor Quality) is approximately 2% of margin or $100,000 of net profit annually.
Process Start : Quote
Process Stop: Hand-Off of Work Order to Plant
In bounds: Sales, Quoting, Design, Customer Service
Out of bounds: Manufacturing, Shipping
Project Schedule: ◦ Define Phase Complete by 4/27/2009
◦ Measure Phase Complete by 4/30/2009
◦ Analyze Phase Complete by 4/31/2009
◦ Improve Phase
Pilot Implementation Complete by 5/29/2009
◦ Control Phase Complete by 8/1/2009
Dave (VP) Champion
Denise (Customer Service) Process Owner
Pat (Production Manager) Team Member
Cindy (Accounting) Team Member
Jim (Quoting) Team Member
Richard (Design) Team Member
High Level Process Map
Purchase Order
Prepare Work Order
Quote
Hand-Off To
Plant
S I P O C
Suppliers Inputs Process Outputs Customers
Provider
Input requirements and
measures Start:
Output requirements
and measures Receiver
Sales contacts with customers
High-Level Process Description:
Quoting Department
Estimating Quotes Acknowledgement with
Order Entry Projected Delivery Date External Customer
External Customer Purchase Order
Engineering Designs/Drawings Convert Order to Work Order Router Customer Service
Print Pick List and Traveler Bill of Material
Check Material Status and Order Materials Drawings
Prepare Documentation
Generate Order Tags and Drawings Work Order Plant
Hand Off to Plant Date Received by Plant
End:
Plant Receives Complete and Correct Work
Order
Customers ◦ External Customers
◦ Customer Service
◦ Plant
Sampling Method ◦ Data Collection Sheet, all work orders YTD Jan. 1 –
April 30, 2009
VOC – Customer interviews and complaints
SWOT ANALYSIS - Work Order Development STRENGTHS WEAKNESSES
Can do capability Dots not connected
Good knowledge Lack of ability to pull together
All the tools Time schedules tight
Good accuracy Experience
No consistent numbering system or central
database of information
OPPORTUNITIES THREATS
Creating a system that allows for retrieving info Losing customers
Streamline order entry process Losing employees
People are suggesting potential solutions Internal customers dissatisfied
Improved plant efficiency Image in Industry
Lack of disciplines and follow through
Inefficiency in plant
Accuracy of Work Orders
Timeliness of Work Orders
On Time Deliveries
Excellent Response on Customer Service Issues
Retention of Experienced Employees
Quotes per Day 17
Converted to Work Orders 10% 1.7
Work Orders per Year (260) Days 442
Work Orders Late 25% 111
AVG Cost per Late Work Order
Overtime $300.00
Lost Revenues (Customer
Dissatisfaction) $500.00
Turnover (Employee Dissatisfaction) $200.00
Total Average Cost $1,000.00
Total Cost $111,000.00
Deliverables
• Current State Process Map
• Baseline Process Performance
• MSA
• Data Collection Plan
• Data Collection
• Cost of Poor Quality
Current State Process Map
Purchase
Order
Find
Correct
Data
Delays
From
Interruptions
&
Bottlenecks
Prepare
Work
Order Quote
Hand-Off
To
Plant
Key Process Output Variable:
Y1: Number of Late Work Orders
Total and Late Work Orders Comparison YTD 2009
0
5
10
15
20
25
30
35
40
Jan Feb March April
# o
f W
ork
Ord
ers
Total Work Orders
Late Work Orders
Key Process Output Variable Performance
◦ Y DPMO = 256,000
◦ Y Sigma Level = 2.1
Key Process Input Variables Identified as contributing to the undesirable Key Process Output Variable (Y): ◦ X1: Interruptions ◦ X2: Heavy Work Load ◦ X3: Quote Not Complete ◦ X4: Can’t Read Purchase Order ◦ X5: Can’t Find Quote ◦ X6: Part Being Revised ◦ X7: Create New Part ◦ X8: New Customer Information
Measurement System is a Data Collection Sheet
Sampling is evaluation of 100% of Work Orders generated YTD 1/1 to 4/30, 2009 for baseline data and100% of Work Orders generated in future for pilot and control going forward
Late Work Orders - Data Collection Sheet Paul Gormas
Reason Work Orders Late - Mark with X
Late Quote Inter- Heavy Quote Can't Can't Part Create New
WO # Acceptance ruptions Work Not Read Find Being New Cust
Date Load Complete PO Quote Revised Part Info
33358 1/2/2009 x
33362 1/6/2009 x
33367 1/9/2009 x
33370 1/12/2009 x
33375 1/15/2009 x
33378 1/16/2009 x
33383 1/19/2009 x
33386 1/23/2009 x
33391 1/27/2009 x
33394 1/29/2009 x
33399 2/2/2009 x
33402 2/4/2009 x
33407 2/10/2009 x
33409 2/11/2009 x
33414 2/16/2009 x
33417 2/19/2009 x
33422 2/25/2009 x
33425 2/27/2009 x
33430 3/2/2009 x
33433 3/5/2009 x
33438 3/10/2009 x
33441 3/13/2009 x
33446 3/16/2009 x
33449 3/18/2009 x
33454 3/24/2009 x
33457 3/27/2009 x
33462 3/30/2009 x
33465 4/3/2009 x
33470 4/6/2009 x
33473 4/7/2009 x
33478 4/9/2009 x
33481 4/13/2009 x
33486 4/15/2009 x
33489 4/20/2009 x
33494 4/22/2009 x
33497 4/23/2009 x
33502 4/28/2009 x
Count 37 15 7 4 4 3 2 1 3
COPQ and ROI - Work Order Development
Cost of Poor QualityQuotes per Day 17
Converted to Work Orders 10% 1.7
Work Orders per Year (260) Days 442
Work Orders Late 25% 111
AVG Cost per Late Work Order
Overtime $300.00
Lost Revenues (Customer Dissatisfaction) $500.00
Turnover (Employee Dissatisfaction) $200.00
Total Average Cost $1,000.00
Total Cost $111,000.00
Return on Investment and PaybackTarget Reduction 92% $102,120
Prevention Costs $10,000
ROI $10:$1
Payback Period (days) 36
Deliverables
• Root Cause Analysis – Fishbone Diagram
• Pareto Chart
• KPIV’s
• Cost of Poor Quality
Late
Work
Orders
Manpower Machines
Materials Methods
Heavy Work Loads
Interruptions
Quote Not Complete
Can’t Read PO
Unbalanced Work Loads
Uneven Work Flow
Lack of Communication & Coordination
Bad Copy or Fax
Poor Handwriting
Root Cause Analysis – Cause & Effect
People Continually Asking for Info & Data
Data Not Provided to Plant or Office
Constant Phone Calls
Data Doesn’t Make Sense
Data Missing
Data Incorrect
Looking Up Invoices & Tracking #’s
No Master Database
15
7
4 43 3
21
38.5%
56.4%
66.7%
76.9%
84.6%
92.3%
97.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0
5
10
15
20
25
30
35
Interruptions Heavy Work Load
Quote Not Complete
Can't Read PO Can't Find Quote New Customer Info
Part Being Revised
Create New Part
De
fect
sPareto Chart
X1: Interruptions
X2: Heavy Work Load
X3: Quote Not Complete
X4: Can’t Read Purchase Order
COPQ and ROI - Work Order Development
Cost of Poor QualityQuotes per Day 17
Converted to Work Orders 10% 1.7
Work Orders per Year (260) Days 442
Work Orders Late 25% 111
AVG Cost per Late Work Order
Overtime $300.00
Lost Revenues (Customer Dissatisfaction) $500.00
Turnover (Employee Dissatisfaction) $200.00
Total Average Cost $1,000.00
Total Cost $111,000.00
Return on Investment and PaybackTarget Reduction 92% $102,120
Prevention Costs $10,000
ROI $10:$1
Payback Period (days) 36
Deliverables
• Improve Solutions Recommendations
• Affinity Map
• Future State Process Map
• Pilot Project Implementation Plan
• Post Implementation Results Validation & Capability
• Cost of Poor Quality
Team brainstormed ideas to address priority issues and root causes identified by pareto and cause & effect analysis
Interruptions
Develop Master Database
Give Data Access to Co.
Develop Cust. Contact Proc.
Enter needed data in DB
Force calls to go direct
Better up front communication
Identify critical priorities
Heavy Work Load
Balance work load
Rewrite job descriptions
Rebalance work force
Create a consistent work flow
Improve teamwork in office
Reduce interruptions
Better automation of process
Process Issues
System require & edit data
Set Std. for PO’s
Develop data conventions
Upgrade fax machine
Exception reporting
Issue tracking
Feedback to inputs
Applied impact vs. cost analysis to select final improvement solutions
Initial solutions were selected and consolidated as follows: ◦ Develop consistent data standards and conventions ◦ Establish and enforce time, completeness and
accuracy standards for quotes and PO’s ◦ Create online database and make accessible to all
employees
Future State Process Map
Purchase
Order Access
Database
Prepare
Work
Order Quote
Hand-Off
To
Plant
Pilot Start Date: 5/4/2009
Pilot End Date: 5/29/2009
Feedback Method to Improvement Users: ◦ Report on Late Work Orders
◦ Database use and interruptions
Feedback Method to Team: ◦ Report on Late Work Orders
◦ Database use and interruptions
Develop new data standards
Develop trail database on Access – IT
Train all users
Start up trial on 5/4
Track new processes and late WO’s for 4 days on first phase
Make adjustments and continue pilot
Database Uses
Interruptions each Day
Work Orders Processed
Work Orders Late
KPOV – Late Work Orders
Measurement - % of Work Orders Late ◦ Baseline 25%
◦ Improvement goal metric 2%
◦ Actual Pilot metric 15%
Database Uses ◦ Baseline Metric 0
◦ Improvement Goal Metric 50/day
◦ Actual Pilot Metric 25/day
Database Uses
0
10
20
30
40
50
60
Baseline 4-May 5-May 6-May 7-May Pilot AVG IMP Goal
Interruptions Per Day ◦ Baseline Metric 20
◦ Improvement Goal Metric 4/day
◦ Actual Pilot Metric 11/day
Interruptions
0
5
10
15
20
25
Baseline 4-May 5-May 6-May 7-May Average IMP Goal
Lessons Learned ◦ Initial Communication and Training are key to
success
◦ Involvement of a broader team in solution development stage will help with buy-in
◦ Access Program will be OK as a pilot process, but IT should evaluate database software more specifically suited for work order development applications
After phase 1 of the pilot, the initial cost of poor quality and ROI projections are the same as initially projected
COPQ and ROI - Work Order Development
Cost of Poor QualityQuotes per Day 17
Converted to Work Orders 10% 1.7
Work Orders per Year (260) Days 442
Work Orders Late 25% 111
AVG Cost per Late Work Order
Overtime $300.00
Lost Revenues (Customer Dissatisfaction) $500.00
Turnover (Employee Dissatisfaction) $200.00
Total Average Cost $1,000.00
Total Cost $111,000.00
Return on Investment and PaybackTarget Reduction 92% $102,120
Prevention Costs $10,000
ROI $10:$1
Payback Period (days) 36
Deliverables
• Full Scale Implementation Plan
• Detailed Control Plan
• Cost of Poor Quality
• Lessons Learned
Continue Pilot Program Phases
◦ Phase 1 Week 1 4-May to 7-May
◦ Phases 2-4 each week through end of May
Track database use, interruptions and correlation to late work orders with weekly reviews
Utilize feedback to make adjustments
IT evaluate database software with recommendation due on June 1
Approve and install new software by July 1
Achieve full implementation and final goal by Aug 1
Training and Communication will be accomplished by project Champion, Process Owner and IT during phase 1 pilot
Full capability will be accomplished during pilot phases 2-4
CONTROL PLAN
Project Title: Work Order Development
Process Owner: Denise Roberts
Metric Target Collected Sample Size Collection Review
Value By Frequency Method Frequency
Interruptions 4/Day DR All Check Sheet Weekly
Database Use 50 Uses/Day IT All System Rpt Weekly
Late Work Orders 2% DR All Check Sheet Weekly
Interruptions
Database Usage
Total Work Orders Processed
Late Work Orders # and as # of Total Work Orders Processed
Same as previously projected
COPQ and ROI - Work Order Development
Cost of Poor QualityQuotes per Day 17
Converted to Work Orders 10% 1.7
Work Orders per Year (260) Days 442
Work Orders Late 25% 111
AVG Cost per Late Work Order
Overtime $300.00
Lost Revenues (Customer Dissatisfaction) $500.00
Turnover (Employee Dissatisfaction) $200.00
Total Average Cost $1,000.00
Total Cost $111,000.00
Return on Investment and PaybackTarget Reduction 92% $102,120
Prevention Costs $10,000
ROI $10:$1
Payback Period (days) 36
Project Closeout: ◦ Final paperwork completed
◦ Handoff to Process Owner 5/4
◦ Business Case same as previously stated Eliminating late Work Orders will improve on time deliveries to
customers; improve production scheduling and plant capacity, reduce errors, rework and OT, and improve customer satisfaction which will increase margins by 2% or approximately $100,000 per year.
Involve the process owner in the development of the data collection check sheet earlier in the process
Conduct more training overview of the Six Sigma project process with the whole team up front
Drill down deeper on the facts surrounding the issue in the define step
