Jeff Taylor

Aveta Six Sigma Master Black Belt Program

Master Black Belt Project #1

Executive Summary

1

As an existing Fortune 500 Company, we are taking existing departmental processes and reinventing

their operating identities with-in given managerial and legal constraints. The goal is to re-examine past

departmental policies and procedures that have been in place since the department’s existence and

eliminate financial waste that has plagued the department as a result of inefficient policies and

procedures. Our company has relied on a “good old boys” system of management with a “yes man”

mentality that has plagued a series of questionable managerial decisions and cost the company many

lost hours of productivity and failed capital management policies. A new department with a new identity

will be formed as a result of poor decision making driven by personal profits by former senior leaders

who put their personal agendas ahead of company goals. We will hire people outside the organization to

avoid a conflict of interest mentality that has infected past departmental policies and procedures. There

were many departments that were suffering as a result of poor company mismanagement but we

decided to focus on the Supply Chain department where most of the company’s questionable policies

and procedures were developed. Using knowledge of past failures with-in the department, a new

blueprint was created to eliminate red tape discrepancies that interfered with sound managerial

decision making hierarchies. We feel this blueprint will resonate with various internal and external

stakeholders who have a vested interest to see extensive departmental overhauls for future cash flow

opportunities. We also feel that future employees will benefit using these change management

strategies. The situation is ideal for using Six Sigma methodologies to:

1. Introduce multiple new change management variables and processes.

2. Ensure that past departmental system management failures would not be repeated.

3. Rollout new departmental KPI measurements and beta testing policies and procedures.

4. Manage new departmental change management variation under legal framework constraints and

proven industrial standards of productivity.

2

The Problem

Using past research and bankrupt departmental failure examples, we found that Supply Chain

department mismanagement ideologies and cultures created a “me first” mentality because of the

absence of accountability departmental procedures and policies that promoted fiscal responsibility and

managerial decision safeguards for the entire department. These mentalities stunted departmental

growth driven by decisions that made other managerial decisions inefficient and allowed other

managers to participate and avoid the fear of questionable decision making backlash from senior

departmental managers and executive officers. After measuring and examining the process, there were

several reasons for departmental system failures and repetitive managerial decision inaccuracies:

1. Vendor relationship management was non-existent.

2. Procurement equipment discrepancies.

3. No-bid contracts for parent company purchasing operations

4. “Just in Time” inventory delays.

5. Budget constraints were eliminated and supply chain miscommunication with other departments was

the norm.

6. Contract violations.

7. Supply Chain ERP system failures.

After discussing our concerns with the new CEO and using inputs from other departments, we concluded

that departmental system process failures were caused by snafus that could be easily identified and

corrected in the near future. Departmental system inaccuracies could be solved with Six Sigma

3

methodologies to eliminate past, present, and future company roadblocks. Past departmental

administration mismanagement cost our company $300,000 annually in lost revenue which cannot

happen.

Process Evolution

By implementing and executing the Six Sigma process of Define-Measure-Analyze-Improve-Control, we

put our main focus on departmental change management policies, protocols, and procedures. Next, we

developed a project to better understand Supply Chain departmental business processes and how

questionable decision making systems could be avoided or eliminated altogether in the future. Through

video conference calls, various surveys, interviews from senior leaders and employees, departmental KPI

measurements, forum discussions, and change management testing procedures, we mapped new

Supply Chain business processes, relationships, and policies for profitable managerial endeavors. Our

new strategies corrected past mistakes and provided new safeguards tools to correct mismanagement

realities and integrate successful default departmental operating standards. In the measurement and

analysis phases, we discovered a desire to integrate questionable managerial practices as departmental

pressures grew in complexity and a mentality to do more with less. These pressures, issues, and

expectations presented new departmental challenges that were unforeseen, but grew in complexity

because outside, inside, and culture constraints were developed as departmental policies developed

along a departmental descending productivity curve. Our new strategies had to be tested to ensure

managerial and end-user employee satisfaction with our new system designs for improvement gains.

Therefore, a new team was brought in from various departments and companies to ensure a successful

departmental transition to new policies, procedures, and leadership models developed from scratch

with no internal departmental bias variables.

Findings

4

Our findings were very enlightening to the new company president because of obvious and hurtful

departmental strategies that had been implemented and various accountability controls that had been

blatantly ignored. Thus, we decided to use expertise of outside observers, consultants, and change

management champions to fix a culture of bad managerial decisions. We concluded that Supply Chain

departmental decisions started with the Senior Vice President that was in charge of leading the

department. This manager had developed policies and procedures that put a stipend on basic

accountability process controls to hide indiscretions which helped him avoid any red flags or alarm bells

that would signal departmental inefficiencies. This manager hired individuals and made policy decisions

that he termed “Laissez Faire” implementation protocols. In other words, he let the department

function under departmental policies that he could control and would allow him to avoid any outside

objections to challenge his managerial protocols. He used company politics to gain executive favorability

because of past business connections and inside dealings. We are in the process of determining the

legality of his mismanagement footprint and any potential fallout actions that will occur as a result of

our findings. These realities affect departmental confidence across the company in order for certain

departmental standards to be carried out according to policy standards. This created a loophole of

variation with several departmental processes which brought his managerial discrepancies to light.

Patterns of inconsistencies were observed with process cycle time, vendor waste delivery downtime,

excess orders etc. Based on these findings, there are several processes we have developed renovation

strategies for. We have partnered with an outside consulting firm and several change management

champions to verify process improvements along the way to verify successful rates of change

management for each departmental strategy process.

Conclusion

5

We had to get back to departmental managerial basics. We had a departmental culture that was created

according to one individual’s misguided managerial philosophies predicated on an enabling culture. The

end result was $300,000 in annual savings by identifying unforeseen inefficient departmental processes,

restoring previous process controls that were previously eliminated, and implementing new

departmental process strategies and changes to improve departmental confidence levels. Based on our

team’s new strategy, we have been given the authority to restore our Supply Chain department’s

identity back to a productive business unit. Our team of proactive managers, analysts, and change

champions were able to develop strategies that invoked incremental changes for various processes and

procedures. We are humbled the new president has instilled his trust in our abilities to take a failing

business unit and make it productive again according to Six Sigma process improvement quality

standards.

Define Phase

As a new team of strategic change innovators, many new exciting yet challenging projects present new

learning opportunities to create visionary goals. As we combine old subpar departmental processes with

change process strategies, our new process redesign ideologies will test our leadership decision making

principles. To simplify the process we will define our process operations by our Supply Chain vendors,

procurement middlemen, and change management consultants who are transforming our inefficient

Supply Chain department into a thriving business entity. Supply Chain vendors represent those

individuals whom we conduct our core business processes and strategies with. Procurement middlemen

represent those individuals who provide process upkeep and maintenance levels of optimum business

process efficiencies. Change management consultants represent those individuals that are hired to make

drastic changes to the overall departmental system of operations that represent the backbone of

business operations for the newly formed Supply Chain department. Our overall process strategy is

6

designed to make Supply Chain operations more affordable while eliminating subpar or

underperforming procedures that contribute to departmental shortfalls. Making departmental

processes more efficient encourages departmental employees, managers, and analysts to adopt new

methodologies for conducting business operations. As a result, frustration levels will decrease because

managerial decisions will drive profits that affect our company’s bottom line. It will make department

personnel more likely to contribute their skillsets if they know that past departmental sins have been

eliminated. Different process methodology strategies will be available based on levels of change that are

needed to redefine individual processes. To simplify our departmental survey findings, we will focus on

three types of departmental change game players that will drive positive process changes. In other

words, which Supply Chain processes, procedures and ideologies are bleeding Supply Chain operations

the most and how each one impacts strategy outlooks. From our survey, in (Table 1) below, potential

projects are identified and weighted according to various departmental team business operations and

their managerial process ratings that will have the greatest impact on Supply Chain process efficiency

level improvements.

Weight Criteria And Weights(8) (10) (6) (3)

Company Profits Overall Efficiency

and Mgmt.

Process Support

Low Cost Alternatives

Total

1. Decrease supply chain fleet business operating processes that have a negative variation.

8 10 4 2 170

2. Add procurement supply chain processes that decrease vendor cycle time.

8 10 5 4 147

3. Increase service processes that decrease late payments for raw materials.

6 10 7 1 123

4. Purchase order ERP network downtime configuration.

7 9 7 1 95

7

(Table 1): Supply Chain Project Significance List

After discussions with our Supply Chain vendors, procurement middlemen, change agents, and internal

department senior leadership, we weighted which Supply Chain processes to focus on. Based on all of

the individual processes that make up Supply Chain, overall efficiency and management was given the

highest “value added” significance because it focuses on what our previous Supply Chain department

lacked which caused the department to loose direction. These operational processes will serve as the

foundation to help turn around an underperforming business entity. Departmental confidence oversight

will be a key variable to make our Supply Chain department a functional aspect of the entire corporation

as a whole. We will have to win over people who have been affected by bad decisions made by the

previous regime in order to regain trust and credibility amongst our peers. By focusing on our findings

from (Table 1) senior leadership decided to focus on Supply Chain Fleet business operating processes

that have a negative variation. Our Supply Chain Fleet departmental processes were the starting point of

managerial decisions that caused the department to suffer from gross negligent mismanagement

ideologies.

Vendor and Customer Concerns

Given the fact that we are overhauling an entire department from the ground up, we concluded that

continuous research is important for long term improvements and serves as a foundation for strategic

growth and development. In other words, look at blue prints from other successful industrial Supply

Chain departments and measure our progress according to their Fleet benchmark standards. So what

does senior leadership think about vendor and customer feedback? I have taken relevant parts and

highlights from various management feedback sources based on personal interviews and surveys.

8

Fleet and Equipment Manager

“We started out with great relationships with our vendors, but somewhere along the way the

department lost its identity. I was ecstatic when we got new leadership because it was an opportunity to

provide input concerning processes that had failed miserably. Our fleet and equipment process

philosophies are considered sub-par by most industrial standards. I have worked in other Supply Chain

departments and we never operated at these quality levels of production. I don’t think anyone could

learn long-term valuable skillsets as things are now.”

Fleet Maintenance Implementation Manager

“Fleet and Equipment upkeep is a tricky process. By focusing on business processes with low variation,

we will be able to increase repair efficiency by 35% in the first quarter. By keeping our maintenance

vendors in the loop concerning our operational needs, we will have reduced operational downtime and

fleet vehicles will have greater functional longevity. Delivery process rates will decrease and production

will increase.”

Senior Six Sigma Supply Chain Champion

‘There are a lot of expectations that have been placed upon myself and the new team. If we are given

the authority to make significant changes and do not turn around the Supply Chain department, then we

will lose our credibility with our vendors, our company departments and the new CEO that brought us

on. We will be just like the previous regime that drove our Supply Chain department into the ground. I

hope we can live up to the hype.”

The comments expressed above are mixed in nature. Some are glass half full viewpoints while others are

glass half empty viewpoints. The comments from our Fleet and Equipment Manager held the most

weight with new senior leadership. They took note of the comments expressed by this individual

9

because he has been with the department through good times and bad times concerning Supply Chain

operational business processes. He knows what processes have worked and what processes have

brought the department to its knees. Since the evidence points to our Fleet department being the main

catalyst where bad decisions started occurring, it makes sense to seek the input of an individual who has

participated in its day-to-day activities from day one. Thus, management has made the overhaul of this

sub-department in Supply Chain one of our primary targets for massive strategic process improvement

initiatives. The outcome will begin with Fleet department overhaul efforts. If we can fix Fleet correctly,

then the entire Supply Chain department will start to revert back to efficient business operations.

(Table 2): Project Charter

(Project Information)

Project Name-Supply Chain Fleet Department Overhaul

Sponsoring Organization-Parent Fortune 500 Oil Company

Charter Date: 3/1/2015

Project Start Date: 3/2/2015

Target Completion Date: 5/8/2015

(Team Members)

1. Project Sponsor: Jim Senior Six Sigma Supply Chain Champion (999-999-9999)

2. Project Black Belt: Jeff (777-777-7777)

3. Project Green Belt: Sam (444-444-4444)

10

(Additional Team Members)

1. Fleet and Equipment Manager: Tom (888-888-8888)

2. Fleet Maintenance Implementation Manager: Jenny (111-111-1111)

3. Fleet Analyst: Jay (987-567-1245)

4. Maintenance Lead Technician: Ashley (555-555-5555)

(Principal Stakeholders)

1. VP of Supply Chain: Chad (725-112-1234)

2. Director of Fleet Operations: Audrey (512-675-9975)

3. Procurement and Purchasing Category Manager: Bill (232-444-6271)

4. Senior Leadership Team: Senior Leadership Team

(Project Goals)

Eliminate any Fleet business operational process deficiency. Correctly identify a “hiccup”, develop an

appropriate responsive reaction while bringing operational standards up to successful operating

departmental levels of efficiency. Document process progress with benchmark operational performance

improvement process goals and report progress statistical data to Supply Chain departmental leaders.

Update: The following was added to our project by our maintenance vendors. Delays of raw materials

for upkeep priorities has occurred because of market shortages. Incorporate new operational business

11

Fleet process adjustments to match external market conditions until market process delivery flows are

up to acceptable levels of production.

(Process Problem)

After many high level meetings with our vendors, other items were added to the Project Charter before

proceeding with our plans. For better relationships to occur, we need some level of vendor relationship

management expectations. Open communication and honest feedback from both sides need to happen

for this process to be successful. Our functional Supply Chain Fleet processes will depend upon cross-

functional team collaboration ties for both sides. Channel activities need to be assigned accordingly for

the flow of goods and service processes to make a profitable impact on the bottom line. Purchase

orders, raw materials, payment systems, just in time delivery protocols, contract variables, and channel

assignments will be affected until mutual agreement benefit understanding relationships are hashed out

between interested parties. Relationship formation was a project barrier that was unforeseen and

ample time must be invested to achieve new channel partnerships.

(Scope of Project)

The following items have been identified as high value added project scope requirements:

1. Develop new Supply Chain Fleet surveys, discussions, and feedback forums to identify problems

before they occur.

2. Identify Fleet maintenance needs and improve operational performance business operating

standards.

3. Benchmark Fleet disposal/repair plans against industrial standards.

4. Implement “just in time” purchase orders for raw materials to meet fleet needs, maintenance,

repairs, and disposal process operations.

12

5. If channel performance is substandard, work with channel supply chain partners to improve

communication misunderstandings and contract fulfillment to improve channel member confidence.

(Process Importance)

Supply Chain Fleet operational business processes create more problems for our Supply Chain

department as a whole than any other variable. Eliminating fleet replacement hiccups,

maintenance/repair lag time, and cross functional problems will allow our fleet area to function at

higher operational levels. This area of Supply Chain was leveraged with questionable decisions, a lack of

ethics, and processes were negated altogether which lead to inefficient business operational

inefficiencies across the board which affected other areas of study. Industry data suggests $500-$1,000

per fleet process unit. In the past, fixing reoccurring fleet unit breakdowns has plagued Supply Chain

operational budgets which has taken away from other operational business process functionalities. We

have hired an outside fleet management company to assist our fleet workers and managers to better

manage our fleet operational process needs. The previous regime had a way of doing business that

encouraged the use of company vehicles until they broke down and needed replacing. This strategy put

our entire fleet inventories at all-time lows because multiple fleet units would break down all at once

leaving business process operations in jeopardy. Since we are an Oil and Gas company, this could mean

huge down time for our contract workers in the field which means lost productivity and lost confidence

in our strategic solutions that we were hired to implement. Our fleet unit inventories need to be

examined very closely so we can identify operational repairs before they happen and make sure

maintenance is done to prevent future reoccurring problems. Each fleet unit malfunction costs the

company $2,500 per day in lost business revenues. Acceptable operating processes would cut fleet

downtime by 55% and allow better functional oversight per unit. More operating capital will need to be

13

acquired if these threats are ignored which would cost the company $250,000 total. We need to

implement major business process operation capabilities to restore departmental confidence.

(Authorized Resources)

Project Sponsors-Jim (Senior Six Sigma Supply Chain Champion)

As project sponsor, Jim is responsible for the following:

1. Overseeing the overhaul of the entire Supply Chain department which begins with fleet.

2. Coordinating fleet overhaul decisions between Master Black Belts, Black Belts, Green Belts, and other

new team personnel with-in budget constraints.

3. Being the departmental representative who reports to Chad (VP of Supply Chain) concerning overhaul

process progress.

Key Stakeholders-Chad (VP of Supply Chain)

Chad’s job is to report overhaul departmental process improvement progress and expected quarterly

progress timelines to senior leadership. Tim runs his project budget by Chad for approval and makes

sure fleet functional levels of progress are achieved. He is our primary stakeholder that ensures new

levels of department quality are met and executed according to charter by-laws. He works closely with

Tim to monitor appropriate project funding sources and measures which ones increase successful

project processes and variables. He addresses issues made by other departments and executive

managers regarding:

1. Time constraint deadlines.

2. Strategic operational business process improvement levels.

3. Overall project progress and delays

14

Audrey-(Director of Fleet Operations) and Bill (Procurement Category Manager)

Both people work closely with Tom (Fleet and Equipment Manager) who handles new fleet unit orders

and disposals of vehicles and equipment that is outdated or broken down. Audrey ensures fleet units

are functional and assigns them to job service locations or company sites where they are required for

business operational needs. She schedules the time, # of units, and which managers need certain fleet

units at specific job sites while working with Tom to address future job site needs and contractual job

site obligations. Bill is responsible for raw material repair maintenance side of fleet units operations. His

job scope involves new parts, old parts, fuel cards, GPS unit tracking, accident events, and employee

fleet negligence as a result of employee error. He works closely with Tom to ensure that parts are

available for repair and maintenance needs and acts as a “parts” expert. He provides fleet unit cross

functional channel expertise when certain channel members are needed to acquire a specific part for

repair. Tom informs Bill about his business needs and Bill finds a vendor to acquire the parts that Tom

needs.

Senior Leadership Team (Four people)

This team represents the board of directors, internal and external stakeholders, and outside influences

such as law firms and government oil and gas regulatory agencies. All members of this group document

and report departmental growth progress. The team tracks departmental goals and setbacks that have

occurred. They were brought in to be the new face of Supply Chain and fleet management business

operational processes. They also make sure cash flows are available for departmental overhaul

strategies. Divided distribution payments will be provided if new goals are met in a timely manner and

they control cost of capital liabilities for the present and in the future. The team manages outside

15

agendas that could have significant influence on business dealings. These include unions, sponsorships,

and charity nonprofit donations that could further the interests of Supply Chain and our parent company

offerings. If proper returns are not provided, then cash flows will cease and Supply Chain fleet processes

will stay inefficient and progress will be halted.

Team Members

1. Tom (Fleet and Equipment Manager)

2. Jenny (Fleet Maintenance Implementation Manager)

3. Jay (Fleet Analyst)

4. Ashley (Maintenance Lead Technician)

Outside Needs

Depending on departmental progress overhaul, there will be moderate to heavy travel to vendor

meetings, repair shops, and job sites to maintain proper understanding of business operational process

needs. Audrey and Jenny have extensive working knowledge with all of these groups to ensure optimal

process strategies. Handling problems and agendas before they occur will cut down on

misunderstandings and fleet process improvement roadblocks. Field technical maintenance expertise

will be assigned to Jay and Ashley who will provide knowledge concerning major fleet repair tickets or

bills that arise as a result of fleet needs. These repairs include major overhauls for engines and

transmissions, engine and transmission replacements, “lemon” fleet units, disposals, etc. Jay will handle

communication between job sites and project management needs to meet operational process needs.

He will have access to company job site budgets and inventory fleet lists so needs can be met in a costly

time manner. Ashley will handle special order fleet unit needs like commercial trucks, maintenance

equipment, executive company vehicles, flatbeds, dump trucks, employee hauling vans, etc. to meet

16

specific job site requirements for business to function properly. She will provide fleet upgrades that are

needed specifically for special project tasks. She will be proactive in her efforts to take specific

measurements, consider axel bed ratios, get cost estimates, and communicate those needs to

customization shops that build fleet units from scratch. Training needs have been well defined by upper

management in order to streamline Supply Chain fleet process overhaul strategies to increase

operational strategies. There will be unknown problems because we are overhauling Supply Chain from

scratch and have inherited a broken departmental system. However, with considerable foresight we can

minimize past problems and make significant growth and development for department overhaul

strategies.

Sponsor Approval: Chad Date: 5/8/2015

Project Schedule (Figure 1)

The project schedule can be edited as new raw materials inputs/outputs and time constraints appear in

the future. We believe the days allocated to each task will give the project flexibility and can be

adjusted.

Note: The following data figures are starting estimates and extra time and days can be added as project

progress is documented.

17

(Figure 2): Fleet Maintenance/Repair and Raw Material Acquisition Processes

Our Supply Chain fleet department analysts and technicians documented many repair tickets that

involved many different variables involving inefficient business operational processes between our fleet

management inventory partner companies and our fleet units (vehicles and equipment). Each fleet

maintenance/repair ticket had certain criteria patterns that were recorded and documented from many

18

Task Name DurationDEFINE 30 days Implement process survey 8 days Process results 4 days Discuss findings with Senior Managers and New President 1.5 days Investigate Fleet unit processes 7 days Inform Senior Leadership about fleet process findings 0.75 days

Identify important process players: (Vendors, Procurement Middlemen, Change Agents, Maintenance Shops, Channel Members 1.63 days

Confirm raw material resource necessities 1.82 days Project team member selection 2.24 days Draft project schedule details 5 days Draft project budget details 1.25 days Go over specific details with project sponsors 0.42 days Discuss fleet project charter goals 1.37 days Approve detailed fleet project plan process operational necessities 3 days Map out operational process variables 2 day Detailed project mapping strategies .75 day Eliminate strategy improvement roadblocks 1.42 days Develop implementation project success metrics (CTQs) 1.35 days Summarize existing fleet data requirements and unit needs 2 days Final review by relevant sponsors and leadership 1.10 daysMEASURE 21 days Validate (CTQs) with industrial fleet benchmark measures 3 days Analyze existing fleet data 7 days Implement relevant measurements & sample sizes for process verification improvements 4 days Primary analysis chart reviews 5 days Re-formulate data samples and information sources .65 dayANALYZE 4.36 days Chart analysis process overview 1.23 days Benchmark fleet process management standards 0.67 days Outcome comparison for vendor raw material sources 1.93 day Meet with channel and maintenance repair vendors 0.49 days Review findings with Senior Management 0.72 days

IMPROVE 15.46 days

Project Group Team improvement meetings 1.23 days Define process benchmark improvements .58 days Summarize fleet overhaul improvement options with Senior Leadership 1.64 day Capital Budget items and time frames 2.21 day Begin supply chain fleet overhaul 3.87 days Begin operational process measurements necessary for strategic goals 5.23 days

CONTROL 18.24 days

Evaluate supply chain fleet process control variables 1.54 days Track control process variables 2.36 days Review operational data for learning curve development 5 days Provide supply chain process overhaul updates 10 days

different types of repairs, vehicles, equipment and maintenance. One surprising find was the impact of

certain usage styles which included employee fleet unit operational usage styles vs. company executive

fleet unit operational styles. In other words, how was the fleet unit used at the jobsite? We had to ask

the following questions about repair maintenance costs.

1. Was the fleet unit driven hard or normally?

2. Were there any driver errors that caused the repairs or maintenance to the fleet unit?

3. Are vehicle delivery and maintenance costs justified for each vehicle job assignment?

A. executive vs. employee fleet unit

B. vehicle vs. equipment fleet unit

C. personal vs. company time

4. Are fuel costs justified per vehicle?

Once we examine the entire process, we can connect various variable interactions between fleet unit

processes.

Key Measures of Success

As we made our process flow chart for fleet maintenance repair and raw material acquisition processes

we discovered several issues with variable process relationships. The old perception given off by the

previous managerial regime did not stop at the Supply Chain department. These types of questionable

managerial ideologies stretched to our fleet channel and fleet repair maintenance shops. From this

information we decided to investigate the norms that were used by the previous regime that were

efficient so we could combine those operational processes with our new overhaul process

improvements to cut down on implementation improvement time for real time results. We researched

19

several variables and found that maintenance costs that were given extensive oversight by individuals,

other departments, and 3rd party partner companies had a higher success rate of being efficient fleet

repairs/maintenance. Costs that were given limited oversight produced inefficient and repeat repair/

maintenance outcomes. This had a significant impact on fleet unit cycle time, decision time, repair

maintenance downtime, and new acquisition of raw material cycle time payables. We decided to take

our research even further by looking at our third party partner fleet management company which was

never considered as an “impact” variable at the beginning of the project. Our findings shocked everyone

because our business fleet operation process had a skewed variation that was caused by our 3 rd party

fleet management company that we used to manage our fleet units. We found a link between various

fleet business operational process variables.

Vehicle Variables

1. Car

2. Truck

3. Van

4. Work vehicle

5. Personal vehicle

6. Executive vehicle

7. Non-executive vehicle

8. Jobsite vehicle

9. Non-job site vehicle

10. Gas mileage

11. Warranty

12. Vehicle packages

13. In-state vehicle

14. Out-of-state vehicle

15. Tax

16. Title

17. License

18. Renting

19. Leasing

20. Buying

21. Upkeep costs

22. Part cost

23. Vehicle class

24. ½ ton truck

25. ¾ ton truck

26. 1 ton truck

27. ½ ton hauling van

28. ¾ hauling van

29. 1 ton hauling van

30. Flatbed

31. Regular bed

32. Tires

33. Gas Engine

34. Diesel Engine

35. Repair history

36. Regular bed

37. Dealer shop

38. Non-dealer shop

39. 2 wheel drive

20

40. 4 wheel drive

41. Off-road

42. Hauling capacity

43. Electric engine

44. Primary vehicle

45. Support vehicle

46. Hitch

47. Non-hitch

Repair/Maintenance Variables

1. Maintenance records

2. Number of shop visits

3. Lube maintenance

4. Oil maintenance

5. Number of repair tickets

6. Cost per maintenance unit

7. Cost per repair unit

8. Engine replacement or overhaul

9. Transmission replacement or overhaul

10. Purchase order process

11. Bulk discounts

12. Delivery speed

13. Used part

14. New part

15. Ordering part

16. In-stock part

21

(Figure 3) Fleet Disposal Process

22

Process Summary Notes

While we were mapping out our Supply Chain Fleet disposal process, we discovered several relevant

points. The first point was that disposal speed necessity had an impact on new fleet unit pricing points

because of additional leverage provided by operational process necessities. This was a major factor in

determining vehicle fleet unit replacement costs. If a jobsite needed a fleet unit right away, there would

be a pricing point replacement variation variable that was determined by contractual external forces.

Fleet unit downtime was another factor since multiple unit replacements would put weights on vendor

selection. We learned that cost was only one factor when multiple fleet unit necessities affected

production efficiency. We found a negative variation with cycle downtime and fleet production costs.

Finally, special order vehicle replacement variables was another factor that had more process unit

variation. These fleet unit types required more replacement cycle time than other traditional company

fleet units. The correlation was: the more specialized the vehicle was, the more cycle time that needed

to be allotted for selection process requirements. If additional components needed to be added, then

more process variation was unforeseen and process improvements had to be adjusted accordingly.

Measuring and Analyze Phases

Using data measures from above, we concluded that critical fleet management process variables had a

direct relationship with operational processes we were trying to overhaul. These variable processes had

many cross functional relationships that made up a spider web of outcomes. To simplify our

measurement process schematics, we chose a few key variables to analyze that spread across multiple

processes in order to improve our core operational processes. The variables we selected have no bias

variation which means that one variable is not favored over another. We decided to start with fleet

process lead and cycle time measured in (hrs.) which represents the time it takes to implement support

upkeep fleet operation requirements to improve overall efficiency. We decided to measure this variable

23

across all of our core operational processes that include (repair, maintenance, disposal, raw material

acquisition, and GPS monitoring). Lead time is measured by elapsed time and cycle time is measured per

unit. In other words, cycle time measures completion rate and lead time measures the arrival time. This

was a major problem for the last regime because managerial decisions were based on skewed process

managerial decisions. Cycle and lead time represent important variance factors in the fleet industry

because both create constraints for efficiency quality standards and speed variation timetables. We

could have looked at external force process variation closer but then we would have to account for an

uncertainty variable which cannot be measured with precise process precision. Thus, fleet core

processes were researched thoroughly and divided into many other sub-variables that we will examine

alongside lead and cycle operational process time. (Appendix A) shows lead and cycle time cost variables

for fleet management decisions and efficiency production downtime costs associated with lost

production hours. Before we examine process lead and cycle time in depth, here are some interesting

points we discovered that all of our core operational business processes have in common.

1. Employee vehicle use errors vary depending on job assignment and represent a dependent variable so

examining every error circumstance independently offers “no value” added incentive.

2. Managerial process decisions are affected by jobsite needs given by Project managers. Jobsite

variables represent, contract length, number of men to complete the job, number of operational fleet

units, jobsite budgets, worker errors, union demands, etc. These variables can increase or decrease

business process variation and it is assumed there will be a sampling error when combining these

elements with core operational processes.

3. Hard dollars have a direct correlation with process led time because of technician repair agendas and

the possibility of multiple repair tickets. If a vehicle is repaired and other repairs are identified after

24

initial repairs are made then repair costs go up because of more repair opportunities for non-preferred

shops.

4. Soft dollars have a direct correlation with managerial decision confidence and repair maintenance

shop reliability.

Tough managerial decisions will have to be made with-in budget constraints and process outcomes will

restore or negate new leadership Supply Chain department fleet confidence. If shops repair and

maintain vehicles under cost constraints provided by our partner fleet management company then

shops have a greater chance of being considered as a preferred fleet channel member.

Some other key variables for lead and cycle time strategic process improvement include the following:

1. Part type

2. Fleet management company ERP system

3. Fleet unit need level

4. Channel network member relationships

5. Cost negotiation tactics and fleet management company inventory advice for each fleet unit

Fleet unit handling lead time failure means the fleet unit took more time to become operational than

industry quality standard defaults. (Appendix A) involves raw data that we used to form our conclusion

results which helped us create our Pareto chart in (figures 4 and 5). We discovered a correlation

between optimal process lead time and total time spent on fleet unit upkeep and support category by

preferred vs. non-preferred vendors.

25

Repair

Maintenance

Disposa

l

Raw Materia

l Acq

uistion

GPS Monito

ring

0100200300400500600700800

500600

700

300

100

Operational Process Lead Time for Fleet Unit Upkeep Support by Preferred Vendors

Upkeep Category

Proc

ess L

ead

Tim

e To

tal U

pkee

p Su

ppor

t Hou

rs

Figure 4: (Operational Process Lead Time for Fleet Unit Upkeep Support by Preferred Vendors)

In (Figure 4) we see that disposal, repair, and maintenance process takes the longest lead time upkeep

support hours among the five upkeep fleet unit categories. This is not surprising given that all three have

many more sub-variables that can limit or slow lead upkeep hours vs. the other two. All three usually

command a higher hard dollar cost individually than the other two categories combined because all

three represent core business unit fleet processes. It is also realized that individual process agendas by

outside forces is not a process variable because it can represent questionable decision making that may

be legal or illegal which can affect strategic process improvements. Raw material acquisition and GPS

monitoring represent non-core fleet unit processes that can be executed at a lower lead time per unit

because process controls are easier to implement than core operational processes. The time constraints

for non-core operational processes are much lower which allows for a higher range of operational

variance. Some of these sub-variables include: vehicle repair history, lemon vs. non-lemon salvage title,

26

flooded title, channel member relationships, in stock vs. out of stock parts, fleet unit needs, gas mileage,

car vs. truck, contract job, delivery time, payment type, fleet management company process

relationships with parent company operational processes etc. The next question we researched was lead

time fleet upkeep support hours in relation to non-preferred vendors. Non-preferred vendors don’t have

to follow certain guidelines like our preferred vendors do. The question we asked ourselves when doing

research concerns the “value added” dimension of being a preferred vendor. Our Fleet management

company manages these vendors and every ticket has a default fleet unit support sheet that must be

filled out in depth by our preferred vendors depending on the upkeep fleet unit operational process that

must be performed. Trying to micromanage every sub-variable offers no real value because we auto-

create a generic support form for each upkeep claim that comes in. A sample can be found in (Appendix

B).

Repair Maintenance Disposal Raw Material Acquistion

GPS Monitoring0

200

400

600

800

1000

1200

800

900

1000

500

200

Operational Process Lead Time for Fleet Unit Upkeep by Un-Preferred Vendors

Upkeep Category

Proc

es Le

ad T

ime

Tota

l Upk

eep

Supp

ort H

ours

Figure 5: (Operational Process Lead Time for Fleet Unit Upkeep Support by Un-preferred Vendors)

27

In Figure 5 we analyzed process lead time upkeep support for non-preferred vendors to see if specific

operating guidelines had any effect on lead upkeep support time. When we researched this issue and

made the comparison, we found that most of our support upkeep tickets came from non-preferred

vendors and represent over 50% of our support calls and e-mails to our fleet management company.

Our fleet management company reported their fleet advisors had a tougher time negotiating better

upkeep rates for all categories that they manage (Repair, Maintenance, and Disposal). Our fleet advisors

were able to negotiate better rates for (Raw Materials and GPS Monitoring) given that it was a direct

one on one negotiation with these un-preferred vendors. We were able to cut down on direct lead time

for these two upkeep processes vs. the other three processes handled by our fleet management

company. We asked ourselves “Can we handle the other three processes more efficiently than our fleet

management company and cut down on process lead upkeep support hours at the same time. We

decided we had to look at the whole picture since un-preferred vendors only represented 50% of

applicable ticket requests. Since un-preferred vendors represented more lead time vs. preferred

vendors, we wanted to look closer at lead process time with un-preferred vendors. We decided to

expand on (Figure 5) and look at the number of upkeep failures in a 24hr/ 3 month time frame or a

quarterly business period for un-preferred vendors. We are assuming that proper control are in place for

preferred vendors because of specific operating guidelines that have been laid out by our parent

company. We decided to pay special attention to process management upkeep lead time by our

technicians for our two categories us our Fleet Management Company’s other three categories. We

calculated average delivery failures at 15.45 days and put it against an upper control limit because

negative lead time failures mean upkeep support never took place at all. We are defining a failure as the

unsuccessful completion of the entire upkeep operational process from start to finish based on a hiccup

at some point in the operational process. We found that most operational upkeep processes are “semi-

controlled” meaning that basic operating guidelines are expected with most non-preferred vendor

28

guidelines. We then asked ourselves “Can both companies better communicate upkeep operational

standards that would closely mirror preferred vendor guidelines for preferred vendors?” However, we

discovered that semi-controlled definitions meant different things to both companies. We found that in

the two upkeep processes that we handled, lead time was improved for both preferred and un-

preferred vendors vs. our Fleet Management Company for their three processes for preferred and un-

preferred vendors. Our Fleet Management Company offered the following points:

1. Our Fleet Management Company’s processes (R, M, D) took longer to execute vs. our two processes

(RM, GPS).

2. Our Fleet Management Company’s three processes average more failure rates because they are

enacted at higher execution rates.

We concluded that our Fleet Management Company had certain operational constraints but we

wondered if we wanted a new vendor to handle these upkeep processes or did we want our company to

handle them? We decided to investigate further before making any final conclusion? We needed to

better understand all five core operational upkeep processes. Next, we calculated several process

figures that created business impact. The average upkeep assignment cost per hour was 26.75, the

average monthly business assignment cost was $1,700 and the average cost per raw material was 2.262

(these figures were derived from Appendix A). We decided to look at all five processes lead time as a

whole to compare with our process segmentation results. We wanted to know if either company could

pick up “operational process slack” if one process upkeep lead time was looking over other upkeep

process lead times. We wanted to know if the points made earlier by our Fleet Management Company

had any validities.

29

1 2 3 4 5 6 7 8 9 10 11 12 13 140

2

4

6

8

10

12

Number of Failures by Week and Upkeep Type

Repair Maintenace DisposalRaw Material Acquistion GPS Monitoring AverageUpper Control Limit

Upkeep Type

Num

ber o

f Fai

lure

s

Figure 6: (Number of Failures by Week and Upkeep Type)

In (Figure 6) we see distribution of fleet management upkeep support process failures over a three

month (Quarter Cycle) period and Repair, Maintenance, and Disposal produce more failures per week

than the average failure rate of 6.74. This raw data is an extension of figures 4 and 5 and we see that

sub-variables are more present in these three processes alike. We need to acknowledge the soft dollar

costs created by our Fleet Management Company. We realize that our fleet process timeframes can

create additional direct and indirect costs associated with their service offerings based on upkeep

process complexities. Our Fleet Management Company will pass some of those costs onto us which

could affect our delivery lead time on all of our processes. Specifically, the direct costs will affect our

project job sites and indirect costs will affect our two support upkeep processes. Some of these costs

can be controlled while others represent progressive process costs which can be foreseen or

unforeseen. Thus, we implemented the next step of our project that involved open dialogue

30

communication with our Fleet Management Company concerning direct and indirect costs and how we

will manage them as we improve our strategic fleet unit operational process management between our

companies. We decided to do strategic audits, weekly feedback, and information sharing so we can

achieve our goals together. Thus, our Fleet Management Company agreed fleet unit upkeep support

failures from 7 (6.76 rounded-up) per week to 5 per month and then 3 per month. This strategic

improvement would cut repair, maintenance, and disposal failures by 40% per week and equate to

savings of $20 per hour in repair and maintenance for un-preferred vendor shop technician services and

$75,000 in annual hard dollar savings from both companies in the upkeep support fleet unit processes.

We realize that this process implementation is a progressive one and will require stage development.

We decided we needed a few more questions answered about delivery fleet unit impact process upkeep

failures. We decide to ask the following questions.

1. How much would our Fleet Management Company charge us if direct or indirect costs increase

exponentially?

2. If our parent company eliminated our Fleet Management Company, could we implement new cost

controls to decrease direct or indirect costs?

3. Will our preferred vendor relationships suffer if we eliminate or go with another Fleet Management

Company?

4. Will our company have unforeseen opportunity costs if we lack process knowledge and try to improve

our strategic management company’s operational process methods?

All of these questions were not easily answered. As a result, we decided to go back to our original data

and had to make certain assumptions.

1. Our Fleet Management Company would warn us if their fleet operational costs increased.

31

2. We are able to implement cost controls but our Fleet Management Company has a proven

operational plan and our company does not.

3. Our preferred vendors would still take our business regardless of business affiliations because we are

a big industry client.

4. Direct and indirect costs would be better controlled by both companies instead of one company.

Under these assumptions, both companies made process correlation comparisons between fleet unit

support failures and process upkeep infrastructure operational capabilities from both company sides.

Our research findings can be expressed in many different fashions depending on research value weights

so we chose the following information to express our findings. We assumed a lead downtime time frame

of 75 days based on process recovery expectations by our vendors, project managers, and contract

obligations.

1. Number of failures (40)

2. Total Population (850)

3. Average time until failure occurs (15.45) days

4. Failure redelivery process upkeep implementation (75) days

Channel communication failures and project jobsite downtime were sampled for a 26 week period.

(New corporate jobsite contracts are assigned every 45 days).

To better understand communication process lead time breakdowns, we decided to examine channel

communication points.

32

Column1 Column2 Column3Location Communication Point Total

Parent Company (Project Jobsite) Origination Point 22Parent Company (Corporate Headquarters) Decision Point 20Parent Company (Upkeep managing channel member) Upkeep Point 8

Parent Company Total Failures 50

Partner Company (Parent Company Project Jobsite) Origination Point 20Partner Company (Corporate Headquarters) Decision Point 12Partner Company (Upkeep managing channel member) Upkeep Point 10

Partner Company Total Failures 42

Preferred and Un-preferred Vendor Middlemen Management Decision Allocation 40

Total Communication Failures 132

Not documented Vendor Mismanagement 40

Summary Total 172

Table 3: Number of Channel Communication Failures, Locations and Communication Points

We will refer to our company as “parent”, our Fleet Management Company as “partner” and other

various communication points. Our goal was to figure where the failures or communication breakdowns

were occurring between process channel members. Direct and indirect costs would impact both

companies if we could not identify process communication failure variables. (Table 3) shows a lot of

communication failures started with-in our own company and with individual project jobsites

(origination point) with-in both companies.

33

Column1 Column2 Column3Total Channel Communication Attempts by Company

Location Total % of Total

Parent Company 550 64.7Partner Company 300 35.3Total Communication Attempts 850 100

Table 4: Total Channel Communication Attempts by Company

(Table 4) also indicates this trend because most of the failures occurred with-in our parent company. We

assumed contract reassignment was 30 days but was adjusted to 45 days by senior management to

improve process variation. We adjusted new ratio variations and started with the average time until a

delivery occurs which we moved from 15.45 days to 57 days with a standard deviation of 6.74 days. Our

sample mean is 45 days given our new contract assignment schedule by senior management. We

requested that our Fleet Management Company have a larger role in the latter stages of the project

with increased upkeep support knowledge sharing.

34

0 100 200 300 400 500 600 700 800 9000

10

20

30

40

50

60

70

80

Upkeep Support Production

Failures UCL Average Time Until Delivery FailureNew Contract Assignment LCL

Upkeep Type Production

Upke

ep S

uppo

rt P

roce

ss D

ays

Figure 7: Upkeep Support Production Days

35

0 100 200 300 400 500 600 700 800 9000

20

40

60

80

100

120

Upkeep Support Production Days Against Industrial Production Standards

Failures UCLAverage Time Until Delivery Failure LCL

Upkeep Type Production

Upke

ep S

uppo

rt P

roce

ss D

ays

Figure 8: Upkeep Support Production Days Against Industrial Standards

As we started implementing our adjusted upkeep support process data, we concluded there is some

improvement in our overhaul efforts but our expectations are not on par with early process results. We

realize we need improved communication efforts at all three communication channel points so failures

can be reduced by both companies. Statistical gains cannot happen if we are content with early overhaul

improvement gains. We concluded that our parent company was experiencing the most upkeep support

failures because our Fleet Management Company lacks more Fleet upkeep support knowledge than

previously thought. It was a shock because earlier lead time charts painted a completely different

picture which made us question our Fleet Management Company upkeep process standards. We

36

decided we needed to look at our fleet parent company process operations more closely to figure out

where our own fleet support upkeep process stood. We concluded we needed more input into the three

processes that we outsourced to our Fleet Management Company (repair, maintenance, and disposal).

This is a big transition because our company has had little or zero input for those three upkeep

processes in the past. As a result of adjusted process ratio variances, we wanted to know if our Supply

Chain operational processes were outdated and did it warrant starting over from scratch since we left

certain processes alone at the request of our Project Managers. The project team decided that we

needed a fishbone or cause and effect diagram to handle our upkeep process support realities. Some of

our information came from our preferred vendor upkeep support tickets where process control

operational guidelines were already in place (Appendix B) and others from our service technicians and

analysts.

37

Research And Development

Cheap Fleet Unit Raw Materials (Parts)

Vendor Relationship

Unfavorable Contract Terms

Power Allocation Mismanagement

Channel Communication Breakdown

Upkeep Process Support Failure

Project Needs

Contract Overload

Repair, Maintenance, and Disposal Upkeep

Support Processes

Budget Overspending

More Input And Oversight Of Processes

Outdated Fleet Units

Driver Error

Figure 9: Upkeep Support Cause and Effect Diagram

At this point, we decided to exchange permanent employee representatives at both companies to act as

ambassadors so we could work on process upkeep support improvements together. We wanted to

further investigate our adjusted ratio data further without our Fleet Management Company more

carefully because there were too many questions and very few answers.

Improvement Phase

Using the information we collected from our preferred vendor upkeep support tickets from all five

upkeep processes from both companies, we analyzed upkeep support process roadblocks.

1. Cheap Fleet Unit Raw Materials Parts-This can be a major issue because it can mean more fleet unit

breakdowns on both fleet and equipment units. This can contribute to forecasting budget improprieties

because data is unreliable.

2. Outdated Fleet Units-This is a major upkeep support problem because multiple fleet unit breakdowns

increase project site downtime which contributes to unfulfilled contracts which can negatively impact

project profits. This could explain a lot of failures from both company upkeep support sides.

3. Driver Error-This could be a problem because drivers that have accidents, misuse fleet units for

personal use, mismanage fuel costs, and hurt our company’s brand name because of personal agendas.

We need to implement better training programs and reeducation efforts for company fleet unit drivers.

4. Contract Overlook-This could be a problem for project jobsites if there are not enough workers and

resources to execute contract terms. Union representatives could threaten strikes as well because of

expectations to do more with less.

38

5. Budget Overspending-This problem is dependent on project jobsites. Project Managers could request

additional fleet units for project execution that are overkill or unnecessary expenditures. Project

Managers could stretch the truth about contractual resource needs for jobsite necessities to conduct

business.

6. Unfavorable Contract Terms-This could be a problem because unfavorable vendor agreements could

increase direct and indirect costs for our upkeep support processes. We will have to employ stronger

negotiation tactics to leverage our costs.

7. Power Allocation Mismanagement-This could be a problem because vendors might take advantage

of our relationships with them. If we keep paying them regardless of service quality, there will be no

accountabilities for product or service delivery. We need to implement vendor relationship management

principles so vendors do not abuse the trust we put in our relationships.

8. Channel Communication Breakdown- This could be a major problem for both companies because

fleet upkeep support processes would experience higher failure rates (total fleet unit process support

breakdown). We need to closely monitor how this affects our process overhaul improvements from a

channel perspective.

9. More Input and Oversight of Processes-This is the most important variable because it allows our

company to have more control over our own core processes that we outsource. At the moment, we

have little or no control over process accountabilities with repair, maintenance, or disposal upkeep

process support. We need to implement standard process control expectations in order to have better

real time data for improvement standard process measurements. We can help our Fleet Management

Company by providing information to control process upkeep support variables.

One of our fleet analysts: “I’m glad that our companies are working together with process data sharing

techniques.”

39

One of our service technicians: “I believe our company partnership will grow stronger because we can

improve our service offerings to your company.”

Based on our findings, outdated fleet units, project needs, channel communication breakdown, and

more input and oversight of processes are the main causes of fleet unit upkeep support process failures.

All of these sub-variables worked together to create a perfect storm. We discovered our failures started

at project job sites because of project manager agendas. The failures began because of inaccurate data

that was underreported by our project managers at jobsites. Our project managers requested certain

operational upkeep support process protocols remain in place when new overhaul efforts took effect in

our Supply Chain department. Most of these protocols involved fleet unit upkeep support processes and

old habits were still being practiced which acted as a counter to overhaul process improvements. We

realized these decisions were failures from every level of the company and that it took Six Sigma project

methodologies to discover questionable project mismanagement practices. Our overhaul strategies of

fleet unit upkeep support processes netted small gains because of roadblocks created by a culture that

encouraged questionable managerial tactics. Our new president thought it would be cheaper and more

efficient to overhaul our Supply Chain department but it was discovered that the entire process system

needed overhauling because of infectious mismanagement habits that were still a part of our parent

company culture. As a result, we had to fire several Project Managers who underreported their process

lead times and developed an action plan to streamline major overhaul measures for our project jobsites.

1. Two project managers and an analyst must now certify lead time from fleet unit process upkeep

support reports for our jobsites.

2. Regular project jobsite audits would be conducted at random intervals to ensure report data integrity.

3. Our Fleet Management Company will record all dealings with our Project Managers and relay that

information back to our Supply Chain Fleet department.

40

At the moment, we are on damage control and are trying to clean up a broken system that needs critical

process repairs and fixes. We will also need to restore process confidence in our project job sites

because of patterns of managerial mismanagement practices. We have also hired additional consultants

to handle our process overhaul transition efforts for our fleet upkeep support processes. Our early pilot

program upkeep support process efforts have shown significant improvements for our strategic

overhaul efforts. Project data site irregularities have decreased because of new process control checks.

Process fleet unit upkeep support knowledge has increased for both companies because of cross

functional department cooperation endeavors. When both companies have a stake in process

improvements, then better oversight becomes a reality. After our first 7 days, outdated fleet units were

cut by 35%, channel communication breakdowns decreased by 20%, project needs decreased by 10%,

and process input and oversight increased by 15%.

Control Phase

As we progressed through our fleet unit upkeep support project, we researched and discussed various

process upkeep support deviations from efficient process controls. As a result, we have executed the

following steps to ensure critical process fixes and increased confidence while eliminating past process

errors and mistakes.

1. We will implement and develop future process control testing measures for all parties involved.

2. We will require all Supply Chain Fleet department employees to take additional education classes to

meet new process operating quality standards.

3. Project Managers will be rotated at job sites to decrease decisions that promote personal agendas.

4. Random project job site audits will occur more frequently and an outside company will administer the

checks.

41

5. Project over-budget spending will no longer be allowed unless approved by the new president

himself.

6. Process control charts will be done every 10 days to monitor improvement process upkeep support

elimination protocols. Two supervisors and one manager will need to sign off on successful fleet upkeep

process lead time success data that is submitted from project job sites each week.

7. Preferred and non-preferred vendors will be reexamined every 60 days to ensure contract

expectations and raw material deliveries are successfully met. Written summaries will be required and a

grade will be given to each vendor we do business with.

We realize that over hauling an entire department and its subsidiaries is a complicated process and we

cannot claim any significant improvement at this time because of undiscovered process job site failures.

Better process controls and accountability standards need to be measured and implemented for all

parties involved. However, early signs point to immediate short term upkeep support operational

process gains as a result of the identification of unforeseen process problems that have now been

identified by our team.

Conclusion

Our project has netted our Supply Chain Fleet department relevant hard and soft dollar savings and has

prevented future wasteful spending by our project job sites. Our process failures have significantly

decreased and will continue once we implement project job site controls that have been non-existent.

Process overhaul efforts will need to be tested, retested, and tested again for significant improvement

gains. We are off to a great start and project goals have increased exponentially when compared to

where we started. We have adopted cross functional knowledge sharing with our Fleet Management

42

Company which has significantly increased fleet unit upkeep process support efforts. However, Six Sigma

levels of efficiently could not be achieved until we eliminated several layers of process inefficiency. Our

entire Supply Chain Fleet department and project jobsite process decision making ideologies had to be

overhauled for Six Sigma levels of process efficiency to become a possibility. At the moment, we are

researching new process add-on procedures so we can strive to constantly improve our levels of

operation. As a result, we have saved $175,000+ hard dollars according to early research data strategic

process findings. When we included our Fleet Management Company and vendors in our process

improvement efforts, soft dollar savings increased because everyone is cooperating which increases

communication efficiencies. We have learned the following lessons:

1. Communication breakdowns significantly increased fleet unit upkeep support process failures.

2. We need more input and oversight of repair, maintenance, and disposal company processes.

3. Previous regime process inefficiencies had to be eliminated, otherwise our overhaul efforts would not

be successful.

4. Assuming company process standards are efficient without checks and balances can lead to new

inefficient sub-variable problems because of process improvement complacency.

Our team has developed a process analysis based on control accountabilities that have significantly

improved department confidence that was lost by the actions of the previous regime. Project goals have

been a success and we will continue our efforts to overhaul the Supply Chain Fleet department and

project jobsite processes for greater operational levels of Six Sigma.

43

Appendix A

The following represent Lead Fleet time process cost elements for efficiency standards

Assignment Cost Cost1. GPS real-time fleet unit installation $20.00/Hr.2. Fleet disposal new unit delivery by Fleet Mgmt. Company

60.00 each day

3. Fleet Mgmt. Company online repair advice service for present company fleet analysts

25.00/Hr.

4. New vehicle locator service vendors 55.00/Hr.

5. Fuel bulk discount card annual fee 70.00 per vehicle

6. Optional On-Star vehicle management services $3,500/month

7. Repair shop maintenance technician services $35.00/Hr.

Below are the efficiency production downtime costs that are associated with fleet unit lost production hours.

Production Unit Downtime length Cost per unit1. Jobsite service truck breakdown

1 week $1,000

2. Employee jobsite hauling van breakdown

1 week $2,500

3. Partner Fleet Mgmt. Company fleet unit delivery failure to jobsite.

1 week $3,500

4. Repair and Maintenance is delayed by preferred shop

1 week $950

5. Raw material delivery delay by vendor

1 week $300

6. Company vehicle misuse due to GPS failure monitoring

1 week $600

7. High fuel costs for vehicle operation

1 week $1,200

44

Preferred Vendor Upkeep Support Ticket (Appendix B)

Upkeep Type: (R, M, D, RM, and GPS) Technician Name (if applicable):________

Vendor Name: ______________ Any previous support upkeep tickets: Y or N

Service Upkeep Time: ___________________ Fleet Unit Type: _________________

Customer First Name: ______________ Customer Last Name: _________________

Address_________________________ City: __________ State: _____________

Zip Code: ________________________ Phone: _________ E-mail:____________

Reported Problem or Issue:

Action Taken to Manage or Resolve Problem/Issue:

E-mail or Phone Inquiry: _________________ Supervisor Comments:

Parts needed (If applicable):______________

Follow-up needed: Y or N Subtotal: _____________________

Date: _________________________ Tax: ____________________________

Ticket Support Number: _________________ Total Amount: ___________________

45

Appendix C Data Summaries

Column1 Column2Project Jobsite Production Downtime (Hours) by Week

Weeks Total1 1262 1633 1954 2695 2606 2407 1378 3469 28010 32711 18412 20613 16914 36915 19316 27917 31418 24319 19920 29921 30322 15723 39024 13525 21726 200

Project Jobsite Downtime 6200

Project Jobsite Chart 1: Project Jobsite Production Downtime (Hours) by Week

46

Column1 Column2Project Jobsite Production Downtime (Hours) by Upkeep Type

Upkeep Type TotalRepair 1900Maintenance 1100Disposal 1400Raw Material Acquisition 1000GPS Monitoring 800

Total Production Downtime (Hours) 6200

Project Jobsite Chart 2: Project Jobsite Production Downtime (Hours) by Upkeep Type

Column1 Column2Operational Process Lead Time for Fleet Unit Upkeep Support by Preferred Vendors

Fleet Upkeep Type Total

Repair 500Maintenance 600Disposal 700Raw Material Acquisition 300GPS Monitoring 100

Figure 4: Operational Process Lead Time for Fleet Unit Upkeep Support by Preferred Vendors

Column1 Column2

Operational Process Lead Time for Fleet Unit Upkeep Support by Un-Preferred Vendors

Fleet Upkeep Type Total

Repair 800Maintenance 900Disposal 1000Raw Material Acquisition 500GPS Monitoring 200

Figure 5: Operational Process Lead Time for Fleet Unit Upkeep Support by Un-Preferred Vendors

47

Column1 Column2 Column3 Column4Delivery Failure Week by Upkeep Type Repair Maintenance Disposal

1 8 9 102 7 8 83 8 5 94 10 8 105 7 7 96 8 9 97 9 8 88 6 7 109 10 7 10

10 8 9 611 7 6 912 9 7 1013 10 6 814 10 8 10

Column5 Column6 Column7 Column8

Raw Material AcquisitionGPS

Monitoring AverageUpper Control

Limit

6 3 6.74 115 2 6.74 117 5 6.74 114 4 6.74 114 3 6.74 115 2 6.74 117 7 6.74 115 4 6.74 114 5 6.74 113 4 6.74 114 6 6.74 116 4 6.74 115 3 6.74 116 2 6.74 11

Figure 6: Delivery Failure Rate by Upkeep Type

48