Post on 07-Feb-2017
1EDU 501 12122013 © 2013 The National Graduate School of Quality Management
EDU QSM 572(O)Cohort 116
Master Business Cost ProjectTeam Independence
10/10/16
Louis Poggenburg
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2 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Team Ground Rules The team leader will be established in the first assignment and remain
consistent throughout the project. All team members will participate in the weekly Sunday (12pm) team
meetings and will notify other team members the day prior when unable to attend. The one-hour team meetings will start and end on time. Additional meetings can be scheduled in advance if needed. Meeting minutes will be maintained by the recorder.
A mutual consensus will be achieved for each assignment prior to submission. If a consensus cannot be met, the professor will be contacted for guidance.
All assignments will be submitted on time. Texts, emails, and phone calls are established methods for
communication between team members.
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3 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Champion and Guiding Coalition
Champion
Chad Gillenwater The Plant Manager has complete responsibility for the overall leadership, commitment, implementation, and adherence to Independence Corrugated Production & Quality System.
Day-to-Day ChampionsJoe SextonProduction Superintendent; responsible for the day to day control of manufacturing processes, equipment, maintenance and adherence to the Quality System.
Jacob BrandtAccounts Receivable; gathers and collects data, maintains financial spreadsheets
John LuznickyProduction Coordinator and Safe Trainer; assists with quality as needed
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D M A I C
4 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Force Field Analysis
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Reduce loading
damaged product and
customer credit
requests.
Supportive Forces Restraining Forces
Increase Customer Satisfaction (5)
Reduced Redundancy (4)
Decreased Rework Time (4)
Reduced Processing and Shipping Time (4)
Cost reduction for rework and materials (3)
Supporting Forces Weight: 20
Training time (1)
Resistance to Change by Front line and Supervisory Staff (5)
Sense of Urgency/ creating short-cuts (4)
Increased monitoring (2)
The ability to ensure change is implemented accurately (3)
Communication between all 3 shifts (2)
Restraining Forces Weight: 17
D M A I C
5 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Problem Statement The Independence Corrugated Plant in Oak Creek, Wisconsin, shipped
damaged product to its customers resulting in 57 requests for credits totaling $11,420 between January 2015 and March 2016. External nonconformance return costs due to rework and remanufacturing resulted in an annual cost of poor quality of $89,320 during this time period.
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D M A I C
6 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
SIPOC
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Suppliers Inputs Process Outputs Customers Independence
WI plant production line
Product orders Fork lift
computer I.D. tag printer Q.M.S. and
training requirements
Loading Department
Shipping Contracted Carrier
Produced units Unit scanner Units needing
to be scanned Shipping
schedule Loading
efficiency order I.D. tag Loading
configuration Fork lift
operator Trailer loading
standard operating procedure (SOP)
Lift product from product line
Product scanned by
fork lift computer
Product is taken temporarily to
finished goods or directly to trailer
Product loaded
directly into trailer or staged outside of
trailer to shortly be loaded
Scan product when unloaded into trailer
Unload product on left or right side of
trailer Blow horn and back fork lift out of trailer
Produced units being moved
Finished Goods Staging Area
Inventory into Axiom software
Loaded Trailer
Axiom trailer inventory
Fork Lift Operator
Shipping Department
Quality
Assurance Department
Customers
ordering/ receiving final product
D M A I C
7 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Current “As-Is” Process
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Lift Product from
production line via fork
lift
Product Disposition
Product scanned by computer which determines where product goes next
Product dropped/ stacked in finished goods area by fork lift
Product picked up in finished goods area by fork lift
Product dropped in trailer according to width or length of product
Fork lift backs up from production line and turns around
Fork lift backs up from finished goods area and turns around
Fork lift backs up from finished goods area and turns around
Product picked up by fork lift and repositioned if needed to maximize space
Product Directly
loaded in trailer
Product taken to trailer on fork lift
Product dropped next to trailer awaiting optimal loading space by width or length of product
Fork lift backs up from dropped product
Fork lift picks up product and backs up to load onto trailer
Blow horn and back fork
lift out of trailer
D M A I C
8 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Customer Requirements Matrix (CRM)
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Customer Output Quality Characteristics
Description What to Measure Target Importance to Customer
Customer View of
Gap
Rank
Internal
Shipping Department
Ship out undamaged
product to customers
Efficiency Determine what is loaded and when
The time to load trailers and empty finished goods staging
area
5 4 1 4
Accuracy Loading product without wasted space
Product that is shorter or longer than 98”
4 4 1 4
Undamaged Product has no tears, scrapes, bends, or
punctures
Frequency of return authorizations >$25 for
damaged product
4 5 1 5
Quality Assurance
Department
Efficiency No rework Labor costs for rework completed
5 4 1 4
Accuracy No waste Cost of product material thrown away due to damage.
5 3 1 3
Undamaged Product has no tears, scrapes, bends, or
punctures
Amount of return authorizations >$25 for
damaged product
4 4 1 4
External
Customers ordering/ receiving
final product
Efficiency Product is delivered timely
The amount of time from order received to product
delivered
4 5 1 5
Accuracy Product received is correct order amount
and type
Customer requests for order corrections regarding
quantity and type
5 5 1 5
Undamaged Product has no tears, scrapes, bends, or
punctures
Frequency of return authorization >$25 for
damaged product
5 5 1 5
D M A I C
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Data Collection PlanData to be collected
Stratification/ Grouping
Operational Definition?
Sample Size Source & Location
Collection Period
Primary Responsible MBP Member
QVR Report By week Yes 12 months 100% QVRs
Customer Service Department
October 2015 to September 2016 (last day of each month)
Louis (Collection)
Yvonne andKistler (Analysis)
In-process Damage Detection Monitor
Per dayPer shift
Yes 45 daysMon – Fri3 Shifts
Observational Product Inspection
July 25, 2016 to September 15, 2016
Louis (Collection)
Kister (Analysis)
Survey Forklift Drivers No 10 drivers (100%)
In-person and while loading from floor each shift
July 25, 3016 to August 5, 2016
Louis (Collection)
Yvonne (Analysis)
Employee Training Records
By employeeas a group of Drivers
Yes 12 records12 months
Shipping Supervisors or Production Coordinator
October 2015 to September 2016
Louis (Collection and Analysis)
D M A I C
10 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Fishbone Diagram
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D M A I C
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Shift 3
Shift 2
Shift 1
0
5
10
15
20
25
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Customer Credit Requests by Shift Jan-July 2016
Dam
age
Occ
urre
nces
D M A I C
12 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Strategic Priority and Project Goals
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To decrease product damage that occurs prior to loading in a shipping trailer, resulting in a 50% decrease in monthly customer credit requests based on receiving damaged product.
To decrease product damage opportunities at each of the three “points of contact” within the process flow.
Establish a monitoring system that reviews loading damage on a weekly basis.
D M A I C
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Cost Analysis / QOPQ
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D M A I C
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Recommendations
Continue with daily process audits, due to the awareness that has been raised. Focus on 3rd shift for process improvement but also look at 1st shift for any best practices. Develop a training program with a SOP (handling & preservation of product) to further
reduce forklift damage. Maintain visual damage metric for the shipping department personnel which include
communication of results (good or bad).
Pursue a benchmarking venture with Ecologic’s fiberboard bottles.
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D M A I C
15 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Future State Process
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Lift Product from
production line via fork
lift
Product Disposition
Product scanned by computer which determines where product goes next
Product dropped/ stacked in finished goods area by fork lift
Product picked up in finished goods area by fork lift
Product dropped in trailer according to width or length of product
Fork lift backs up from production line and turns around
Fork lift backs up from finished goods area and turns around
Fork lift backs up from finished goods area and turns around
Product picked up by fork lift and repositioned if needed to maximize space
Product Directly
loaded in trailer
Product taken to trailer on fork lift
Product dropped next to trailer awaiting optimal loading space by width or length of product
Fork lift backs up from dropped product
Fork lift picks up product and backs up to load onto trailer
Blow horn and back fork
lift out of trailer
D M A I C
16 EDU 501 12122013 © 2013 The National Graduate School of Quality Management
Implementation Strategy
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D M A I C
Root Cause Recommendation Rationale Start Date End DateLength of time
There is no current written operating procedures for drivers to reference or be trained.
Develop Loading Process SOP A written SOP will standardize the process and give the drivers a reference in which to be accountable to; increase staff knowledge, and competency. This step should be completed prior to any training or competency.
12/1/2016 12/9/2016 9 days
There is no current driver or competency program to ensure drivers know how to operate a forklift and know the correct loading process.
Develop & Implement Annual Driver Trng & Competecy Program
Annual training and competency will educate all drivers on the expectations and process. It will identify drivers needing more education and/or competency skills for remedial training. Driver discussion during training may impact the communication plan.
12/10/2016 12/30/2016 20 days
Driver interviews revealed they do not think damage is likely to occur at any stage of the loading process. There is no communication to the drivers regarding actual damage reported or related cost.
Develop & Implement Driver Damage/ Cost Communication Plan
Communicating frequency and cost of weekly or monthly damage will educate drivers on the group performance and how it impacts the company's reputation and finances. This will include information gathered from training and competency.
12/10/2016 12/30/2016 20 days
There is no monitor of loading process or end result within the trailer. Damage as a result of loading is currently unknown.
Add cameras facing inside of loading trailers
Using video footage to review loading practices and the end results of product loads can be used for lessons learned and investigating shipping damage. This step will likely cost the most and logistical research is needed therefore will occur once drivers are trained.
1/1/2017 2/1/2017 30 days
Root Cause Recommendation Rationale Start Date End DateLength of time
Internal damage occurred within the loading process prior to being loaded onto truck trailer.
Internal Damage Audits
Internal damage data was not being collected; routine but random audits were implemented during the measure phase and logged per shift by supervisors for tracking and trending. Identifying internal damage before loading onto trailer
7/26/2016 On-going On-going
Customer credit requests were logged but not analyzed for useable data for identification of improvement opportunities.
Normalize Credit Requests by Customer Sales
By normalizimg the requests, the company can determine if a specific customer has more requests and use that information to determine why. The cost alone will not give the clearest root cause.
9/15/2016 On-going On-going
1st shift had only 6% of total damage reported by customers.
Identify 1st Shift Best Practices
Examining the process and environment on 1st shift will help guide improvement efforts on 2nd and 3rd shift. This results in focused improvement efforts for root causes. This information will assist in writing the SOP and training modules.
11/1/2016 11/14/2016 14 days
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Cost Analysis / QOPQ
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D M A I C
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References
Fujii, R. (2013, July 19). Liquids in Cardboard Containers? The Record, pp. 1, 2.
Tague, N.R. (2005). The Quality Toolbox (2nd ed.). Milwaukee, WI: ASQ Quality
Press.
Wood, Douglas C., . (2013). Principles of Quality Costs (4th ed.). Milwaukee, WI: ASQ Quality Press.