Priority Spool Throughput Rate

Steve Hoyle / Alan Magner

October 2012 – March 2013

Contact:alanmagner@variancereduction.com

Problem Statement• As of September 2012 the spool manufacturer was required to supply

23,300 Spools by Jun 2013• Based on the current run-rate of 197 spools per week the spools

manufacturer is forecasted to complete the full order of 23,300 Spools in Apr 2014, an estimated 10 months behind schedule

• As the spool manufacturer was on the critical path for the LNG construction project, the delayed spools were a critical risk to first-gas target date

Lean Six Sigma MethodologyAll Lean Six Sigma projects follow the 5-step DMAIC methodology to achieve sustainable improvements, focussing on simplifying and perfecting to make business processes faster, safer, better quality and lower cost

• Define: can we clearly explain the problem, agree on the scope, and understand the customer needs and the business needs

• Measure: collecting the data on what is really happening, mapping the process steps to make the current state visible

• Analyse: Identifying the true causes of waste and variation in the process

• Improve: putting in changes that will remove the causes of waste and variation

• Control: Sustaining the changes & behaviours to make sure the improvements become “business as usual”

Baseline and Predicted Spool Count

The S-Curve chart shows the accumulated total spools;

Red Line is the baseline outputs at the start of the Lean Six Sigma Project, forecasted Spool completion of April ’14

Purple Line is the forecasted outputs based on improved Spool output, forecasted Spool completion of Sep ’13

Now able to make the spool requirements to support the 120-day look-ahead schedule

Value Stream Map

The VSM is both a tool for communicating the improvements, and also a strategy document to focus improvement efforts

Value Stream Map• A cross-functional team created a Value Stream map was to identify the high-level

steps of the production process, and where delays were happening• Of the 4 bottlenecks identified, the Paint Process (Surface Treatment) was the most

significant

Initial Investigation of the Paint Process

• the first-pass yield was 20%, which meant that 80% of the volume going through the bottleneck process was rework

Paint Inspection ProcessObservations• Each spool is inspected twice – 1st: spool manufacturer and 2nd: project management

team• Data not being collected of paint rework and failures• Pass/fail quality decisions not made in a consistent wayArea of Focus• If the Paint Inspection process is deciding that 80% of spools need to be reworked

(touch-up, sanding back, extra paint etc.) how confident are we the process of Paint Inspection is accurate?

• To gauge the effectiveness of the Paint Inspection process an MSA was conducted

Paint Inspection ProcessMeasurement• A 2-day Measurement System Analysis (MSA) event was run over 2 paint shops using 6

inspectors and 32 spools. In the MSA 1200 data points were collected and analysed;• Paint thickness accuracy (using DFT measures)• Cosmetic paint acceptability (pass/fail measure)

Analysis

• 40% accuracy to the baseline standard - inspection process was unreliable; 60% of pass/fail decisions were incorrect

• No clear SOP existed for conducting an inspection; there were 5 different SOPs across the 6 inspectors

Paint Thickness MSA Results

Paint thickness on spools have an upper & lower limit:Lower Limit: ensure adequate protection of the spool from the elements and spool integrityUpper Limit: Spools & paint coatings need to expand & contract due to internal temperatures of contents flowing through spools – paint too thick can crack & deteriorate with temperature expansionFalse Readings of paint thickness can lead to false accept & false reject of spools – customer impact risk & unnecessary re-work risk

Cosmetic Acceptance MSA• Overall Effectiveness was 75%

• Inspectors ranged from 40% to 100% effectiveness• Three of six inspectors very close in effectiveness• Other three inspectors were trained to bring effectiveness range to 80% to 100%

Cosmetic Acceptance MSACauses of variation found at inspection process

Improvement #3 – Truck Touch Up Procedure, at Bottleneck New cosmetic standards for scratches / paint damage on back of the truck – QAQC team are trained

1. Before improvements there was no cosmetic standard or consistency of inspection

2. Before improvements, 20% of spools on trailers require touch-up, which stops the trailer from departing; delays all spools (100% of trailers impacted)

3. After improvements, Touch-up time

reduced from 1-hour per trailer down to

10 mins. per trailer

4. Reduced delays with dispatching completed trailers

Improvement #5 – Inspection Procedures, at Bottleneck

Inspection standards for scratches / paint damage – 9 areas of difference now standardized

New SOPs for;

1. 2 new calibration SOPs written; for System 1 & for System 2

2. New SOP for taking DFTs on Stainless

Observation Recommendation Project Management inspectors borrow the Spool Manufacturer thickness gauge, but don’t always ask if it was calibrated

SOP: Before inspection, ask if gauge has been calibrated

2 ways to calibrate; 1. Calibrated with a shim on a zero plate, 2. calibrated on a spool instead of on shims

SOP: decide on 1 method to calibrate

Checking thickness rules: some follow "within 25mm" rule - don't check thickness within 25mm of a weld, some don’t

SOP: decide to follow/not follow "within 25mm" rule

Different standards to follow - which standard to use - "piping" or "intricate shapes"?

SOP: decide how to choose when a spool is "piping" or "intricate shapes"

Some inspectors use a torch to examine surface, some don’t SOP: decide if torch is needed, then standardize

Some inspectors lift spool to examine underneath surface, some don’t

SOP: decide if lifting spool is needed, then standardize

Some inspectors decide on each spool, 1-at-a-time, others will decide on a batch of spools after reviewing batch

SOP: decide on single-spool or batch method, then standardize

Some inspectors took readings starting at one end of the spool and working towards the other end, others took readings in random locations - gave himself more walking than needed

SOP: decide on random or end-to-end method, then standardize

Some inspectors wanted a second opinion – “discuss with Project Management to see if they would pass”

SOP: decide on individual decision or joint-decision method, then standardize

Improvement #8 – System 2 Paint process, at Bottleneck

• System 2 paint system time decreased from 5 days to 14 hours using simple SOP

Spool Output – Control ChartAverage of 191 spools/week before any improvements to 365 spools/week after most improvements is a 91% increase

Spool Output – Significant Increase

Two samples t-Test Data source: 'Sheet1'O2:P28.

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Sum

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MeanStandard deviation

27190.85291.196

10365.8

122.204

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0.0Based on this sample you can

be greater than 99.99% confident that the means are

different.

BaselineAfter

ImprovementsSample size

Analysis by Quantum XL 2013www.SigmaZone.com/QuantumXL.htm

H1 (ALT)'Baseline' Mean not equal to 'After Improvements' Mean

ACCEPTED

Average of 191 spools/week before any improvements to 365 spools/week after most improvements is a 91% increase

Increase is statistically Significant

Results

Now able to make the spool requirements to support the 120-day look-ahead schedule

• With a 91% increase in outputs the spool manufacturer is no longer on the critical path for the LNG construction project and removed from the risk-register

• Hard dollar savings in reduced labour and expediting USD$3,200,000

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