Six Sigma Project OverviewFinal Report

Mack Operations Focus

Duration of Project:May ~ July 2004

Craig LesterContinuous Improvement Manager

Iverson Industries Inc.

Team MembersTEAM LEADER Craig Lester – Continuous Improvement Manager

TEAM MEMBERS*Michael Iverson - Engineering Manager*Bill D. - Maintenance Supervisor

Cross Functional Core Team*Jim T. - Process Engineer*Wayne R. / Brenda P. - Quality Engineer*Jim A. / Ali A. - Production Supervisor*Manufacturing Associates

DEFINE

Define Problem Statement

The Mack operation is NOT BalancedLabor is @ 150% of the quoted levelDelivery is below forecast levels +/- 89%.Customer Quality is unsatisfactory – Repeat RejectionsChangeovers are Lengthy and Costly

The Mack operation is not meeting Customer Demand for Delivery and Quality. Labor costs are excessive due to Overtime consumption.

Project GoalsReduce labor costs by 25%Improve OEE ratings by 25%Improve Line BalanceEliminate Customer DefectsReduce Internal Quality rejects Achieve Production Yield GoalsSMED for Changeover Reduction

DEFINE

14.4

16.1

16.916.4

14

16.5 16.5 16.5

0

2

4

6

8

10

12

14

16

18

April May June July

% of Goal

Avg. Parts per Hour Produced

Month

Mack Job #2800 - Monthly Production Averages Op 10AB

Monthly Avg. Goal

Op 10 AB - Process MeasureMEASURE

12.6

14.7 14.9 14.8

12.5

15 15

16

0

2

4

6

8

10

12

14

16

18

April May June July

% of Goal

Avg. Parts per Hour Produced

Month

Mack Job #2800 - Monthly Production Averages Op 10CD

Monthly Avg. Goal

Op 10 CD - Process MeasureMEASURE

21

25.6

18.8 18.9

18 1819 19

0

5

10

15

20

25

30

April May June July

% of Goal

Avg. Parts per Hour Produced

Month

Mack Job #2800 - Monthly Production Averages Op 20AB - 2 Operators

Monthly Avg. Goal

Op 20 AB - Process MeasureMEASURE

Op 20 A/B - Process MeasureMEASURE

8.5

5

4

2.252 2 2 2

0

1

2

3

4

5

6

7

8

9

April May June July

Changeover Time

Month

Mack Job #2800 - S.M.E.D. Apex Broach Changeover - Op# 20

APEX Changeover Tim e

goal

14

18.0

18.8 18.9

18 18

19 19

0

2

4

6

8

10

12

14

16

18

20

April May June July

% of Goal

Avg. Parts per Hour Produced

Month

Mack Job #2800 - Monthly Production Averages Op 30 Drill - Op40 Shape

Monthly Avg. Goal

Op 30 / 40 - Process MeasureMEASURE

Analysis – Downtime and ScrapANALYZE

Wapauca

Foundry.

and

Shipping

Bulk Storage

Iverson Ind. Production Control

Daily Ship

Schedule

Days - Lead

Rough Turn – Op

10A,B

Cut Time (incl. Load) =

157 sec.

Chg./O Time = 30

min.

Avg. Uptime =

2 - 10 hr Shifts

Weekly/Monthly Release

Daily Update – Email

Chg. Over

Finish Turn – Op 10C,D

Cut Time (incl. Load) =

191 sec.

Chg./O Time = 30

min.

Avg. Uptime =

2 – 10 hr Shifts

Slot Broach Op 20

Cut Time (incl. Load) =

60 sec.

Chg./O Time = 1hr

– 4 hr

Avg. Downtime =

2 – 10hr Shifts

Drill Op 30

Shape Op 40

Cut Time (incl. Load). = 150 sec

Chg./O Time = 1hr – 4 hr

Avg. Uptime =

2 – 10hr Shifts

Job #2800 – P/N 30KH430

Weekly Schedule

Chg. OverChg. Over

Chg. Over

Arvin Meritor

Final Insp.

1 pc / pallet

127 sec

100 sec

30 sec

30 sec

191 sec

70 sec

30 sec

30 sec

40 sec

20 sec

120 sec

90 sec

90 sec

30 sec

30 sec

ANALYZE

Improve Op 10 A/B/C/DIMPROVE

Op 10 A/B Rough Turn➢ Balance 10A and 10B cycle times by moving excess turning to the opposite operation to achieve balance.➢ Revise and Retrain Operator Standards based upon a 100% target derived from actual cycle time.➢ Measure and react to Downtime and First Time Quality negatives.

Op 10 C/D Finish Turn➢ Balance 10C and 10D cycle times by moving excess turning to the opposite operation to achieve balance.➢ Revise and Retrain Operator Standards based upon a 100% target derived from actual cycle time.➢ Measure and react to Downtime and First Time Quality negatives.

Improve Op 20 A / BIMPROVE

Op 20 A/B Broach – Throughput

➢ There is NO opportunity to improve operator efficiency without adding headcount.➢ Temporarily add 1 to 2 per shift➢

➢ Follow Up project will pursue Material Handling Assistance to break this constraint and allow headcount reduction to 1.

Op 20 A/B Broach – S.M.E.D. Changeover Reduction Phase 1

➢ Project Start – Changeover averaged 8.5 hours at this Operation.➢ End of Project – 3 subsequent Changeovers have been completed with 1st piece approval in 2.25 hours or less. A 73% Reduction

Improve Op 30 Drill / Op 40 ShapeIMPROVE

Op 30 Drill / Op 40 Shape➢ Throughput increased from 14 parts per hour to 18.8 parts per hour. ➢A 34% Improvement➢

➢ Rewrite the program for the Mitsubishi Shaper to reduce Constraint cycle time. Completed w/ 50% Reduction.

Op 30 Drill / Op 40 Shape – S.M.E.D. Changeover Reduction Phase 1

➢ Project Start – Changeover averaged 3.6 hours at this Operation.➢ End of Project – 2 subsequent Changeovers have been completed with 1st piece approval in 1.5 hours or less. A 42% Reduction➢

Op 30 Drill / Op 40 Shape – Setup Scrap Reduction Phase 1

➢ Project Start – Changeover averaged 3 pieces at setup at this Operation.➢ End of Project – 2 subsequent Changeovers have been completed with 1st piece approval on the first part (Zero setup scrap).

Control – Control Plans, LPA's• Control Plans– The Mack Control Plans have been thoroughly reviewed and scrutinized in conjunction with PFMEA and Customer Feedback.All revisions have been completed through document control.Each Corrective Action (Internal / External) requires C.P. / PFMEA review.

• Layered Process Audits Layered Audits are utilized to determine if Controls are adequate.

Layered Audits are supported and driven by Executive Management

CONTROL

0.0%

90.9% 89.2% 87.4%96.3% 95.7%

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

JAN FEB MAR APR MAY JUNE JUL AUG SEP OCT NOV DEC

Goal

'% of Assessments that Comply

Mack Truck

Monthly Compliance Report - Layered Process Audit

% OF COMPLIANCE: Goal

LPA Implementation

Control – Management Review• Management Review– The Mack project has been driven by weekly Management Review and Action Assignment Sessions. Example

CONTROL

Project Summary• Problem– The Mack operation is not performing @ acceptable cost and / or performance levels.

• Analysis and Solution– The Mack Line as a whole is not well balanced. Individual Operations are also imbalanced creating NVA wait time.✔ Post and Coach updated Targets for maximum throughput. ✔ Re-Balance each operation to improve flow and throughput✔ Re-write machine programs to reduce cycle time and eliminate dead air time with the tools.

• Results and Business Benefit(s)– Op 10 A/B increased throughput 2.5 parts per hour or 17%_ Op 10 C/D increased throughput 2.3 parts per hour or 18%_ Op 20A/B – Decreased Changeover time by 73% (6.25 hours)_ Op 30 / 40 increased throughput by 4.9 parts per hour or 35%

PROJECT SCORECARD

Productivity Improvement ReportMack Line - Job # 2800 - P/N - 30KH 430

PPH

April May June July August Change ∆∆∆∆

10 AB Rough Turn 14.4 16.1 16.9 16.9 16.8 2.5 17.4%

10 CD Finish Turn 12.6 14.7 14.9 14.8 14.8 2.3 18.3%

20 AB Slot Broach 21 25.6 18.8 18.9 21

20 AB 3 Oper.s 44.0 44.0 44.0 44.0

30 Drill 14 18.0 18.8 18.9 19 4.9 35.0%

40 Shape 14.0 18.0 18.8 18.9 18.8 4.9 35.0%

APEX Changeover Time 8.5 5 5 3.5 2.25 -6.25 -73.5%

(Stick & Fixtures)

Parts Per Hour