COPQ Presentation 2

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

1

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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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


Force Field Analysis

4

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


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


SIPOC

6

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


Current “As-Is” Process

7

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


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


Customer Requirements Matrix (CRM)

8

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


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


punctures

Frequency of return authorization >$25 for

damaged product

5 5 1 5

D M A I C

9 EDU 501 12122013 © 2013 The National Graduate School of Quality Management 9

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


Fishbone Diagram

10

D M A I C

11 EDU 501 12122013 © 2013 The National Graduate School of Quality Management 11

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


Strategic Priority and Project Goals

12

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


Cost Analysis / QOPQ

13

D M A I C


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


Future State Process

15

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



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


Implementation Strategy

16

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


Cost Analysis / QOPQ

17

D M A I C


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.

Documents

COPQ Presentation 2