Final MBP Presenatation 1-27-17

1 © 2014 The National Graduate School of Quality Management 1

EDU QSM 566(O); Cohort 116Master Business Project; Team Independence

1/27/17

2 QSMXXX 01072014 © 2014 The National Graduate School of Quality Management

Team Independence - Corrugated Product Loading Damage Project

2

D M A I C

Team Members:Louis Poggenburg Manager, Quality Assurance Independence Corrugated Oak Creek, WI

Kistler D. Fletcher Sr. Senior Advisor, Logistics Automation Project Manager/T3P DynCorp International, LLC Kabul, Afghanistan

Yvonne Rutherford, BS, CQPA Administrative Officer, Community- based Outpatient Clinics Primary Care, Veterans Affairs Dublin, GA


3

History: Independence Corrugated is one of the premiere producers of corrugated paper packaging. Founded in Oak Creek, Wisconsin in 2004, Independence Corrugated has established an industry-wide reputation for being: Reliable, Accountable, Pioneering. By maintaining a 98 percent on-time delivery rate, a focus on reinvesting in technology, and a ceaseless drive to raise the bar and improve productivity, Independence Corrugated has become a renowned market leader (www.independencecorr.com).

Mission: “The mission of our loyal and dedicated team members is to provide value added solutions for the most demanding customers in the markets we serve.” (www.schwarzpartners.com).

Company noteworthy accomplishments:Since 2006, the company has increased productivity by at least 75 percent annually.A 112-inch wide corrugator installed at the plant was the first of its kind, and is one of the three widest in the United States.In 2013, the company set a world record of square footage for a sheet of corrugated produced.Independence Corrugated is affiliated with the Schwarz Partners, LP investment group (www.independencecorr.com).

D M A I C

http://www.schwarzpartners.com/

http://www.independencecorr.com/


Independence Corrugated Champion and Guiding Coalition

ChampionChad GillenwaterThe 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.

4

D M A I C


Guiding Coalition – cont’d

Erik PiorkowskiQC Technician

Jon SnelsonShipping ManagerDevelops the shipping functions for all 12 plants.

Shipping SupervisorsWill be informed of any process changes made.Jeff Floyd1st Shift SupervisorJim Sindric2nd Shift SupervisorGlen Zandi3rd Shift Supervisor

5

D M A I C

AnalyzeAnalyze

MeasureMeasure

DefineDefine

ControlControl

ImproveImprove

D M A I C

• Determine business case• Develop initial problem statement• Develop descriptive charts (fishbone, pareto)

• Develop data collection plan• Collect data• Develop charts/ findings/ redefine problem statement

• Benchmark for new learnings/ metrics• Determine root causes• Develop charts/ findings

• Develop recommendations to improve• Pilot recommendations• Evaluate and refine recommendations

• Recommend methods/ metrics to monitor• Recommend short and long term actions

Six Sigma Project Phases & Tools


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.

7

D M A I C

8 QSMXXX 01072014 © 2014 The National Graduate School of Quality Management 8

Lift Product

from production

line via fork lift

Product Disposition

Product scanned by computer which determines where product goes next

Product set down/ stacked in finished goods area by fork lift

Product picked up in finished goods area by fork lift

Product set 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 set 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 CCurrent “As-Is” Process


SIPOC

9

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

Finished product

Shipping Department

Quality

Assurance Department

Customers

ordering/ receiving final product

D M A I C


Customer Requirements Matrix (CRM)

10

Customer Output Quality Characteristic

Description What to Measure Target Importance to Customer

Customer View of Gap

Rank

Internal Shipping Department

Ship out or receive 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


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


Frequency of return authorization >$25 for damaged product

5 5 1 5

D M A I C


Data Collection Plan

Data to collect

Stratification Grouping

Op. Def.?

Sample Size Source & Location

Collection Period

Responsible MBP Member

QVR Report (Cost)

By customer and cost

Yes Monthly12 months 100% QVRs

Customer Service Department

Oct 2015 to September 2016 (last day of each month)

Louis Poggenburg (Collection)Yvonne Rutherford (Analysis)

Process Damage Detection Monitor

By shift (1st, 2nd, 3rd)

Yes 60 daysMon – FriEvery 4 hours; 3 Shifts

Observational Product Inspection

July 25 to Sept 25, 2016

Louis Poggenburg (Collection)Yvonne Rutherford(Analysis)

Surveys Forklift Drivers;Quality Tech;Prod. Coord.

No 12 drivers (100%)1 QT1 PC

In-person and while loading from floor each shift

July 25, 2016 to August 5, 2016

Louis Poggenburg(Collection)Yvonne Rutherford (Analysis)

Loading Process Time

Average By Shift and by step

No 10 random loads per shift

Shipping Floor Aug 15, 2016 to Sept 10, 2016

Louis Poggenburg (Collection)Yvonne Rutherford(Analysis)

Employee Training Records

By employeeas a group of Drivers

Yes 12 records12 months

Shipping Supervisors

October 2015 to September 2016

Louis Poggenburg(Collection and Analysis)

D M A I C


Fishbone Diagram

12

D M A I C

13 QSMXXX 01072014 © 2014 The National Graduate School of Quality Management13

Operational Definitions / Acronyms

QVR – Quality Variance Report contains detailed damage data based on customer credit requests.

Lead Time – The elapsed time from time of order entry by the Independence CSR and the production of finished units that arrive to the customer receiving dock.

Damage – Although customers are more lenient, the depth of an indentation or tear that is at least a .5” for corrugated sheets with no scores and at least .75” for corrugated sheets with scores, as decided by Independence.

Loading Process Time – time when product is picked up to when dropped off at staged area and/or trailer.

Pre-loading Damage – damage detected prior to product being picked up by a fork lift In-Process Damage Detection Monitor – A monitor documenting product damage

discovered prior to trailer being closed and moving from the loading dock. Scores – Dimensionally set line impressions in a corrugated sheet that allows the

sheet to bend without it cracking when being formed into a finished customer’s product.

D M A I C


Force Field Analysis

14

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


Mitigation of the Restraining Forces

15

Restraining Forces

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

Training time will be entered into Outlook as a recurring appointmentChange will be supported by the ChampionStandardized work will alleviate shortcutting by placing emphasis on following the process via further defined processes Process audits will be the representative monitoring effort and are fully supported by the ChampionCorrective actions will ensure that change is implemented accuratelyInter-shift communication will be supported by management, supervisors and leads

Mitigation Actions

D M A I C


Forklift Driver Survey

16

Pinpointing Damage Location and How OftenAnswer from a scale 1 to 5 if damage is likely to occur

5 – highly likely (strongly agree)

4 – most likely (agree)

3 – somewhat likely (somewhat agree)

2 – not very likely (disagree)

1 – not likely at all (strongly disagree)

Location: Damage occurs within the Loading Process: 1 2 3 4 5

1) when unit is picked up from production line 1 2 3 4 5

2) when unit is set down in FG area 1 2 3 4 5

3) when picking up unit from FG area 1 2 3 4 5

4) when setting unit down in staging outside trailer 1 2 3 4 5

5) when picking unit up in staging area outside trailer 1 2 3 4 5

6) when setting unit down inside trailer 1 2 3 4 5

7) picking unit up from inside trailer 1 2 3 4 5

Possible Causes of Damage: Happens what % out of 100

1) Incidental Damage caused by bumping while unit is sitting in FG or Staging area

2) Pushing unit too hard with forklift

3) Lack of training and/or skill of driver

4) Misjudgment of space or product size

5) Rubbing forklift tires against unit

6) Stabbing unit with fork lift

7) Forklift backs into unit

8) Forklift side swipes unit

9) Unit is dropped heavily or too fast

Open Suggestions of Causes by Driver

Driver Name

D M A I C


Survey Data

17

D M A I C


Loading Damage by Shift

18

D M A I C

80%


Loading Damage by Customer Claim

19

D M A I C

80%


D M A I C


“Concentration” Diagram; Unit Damage LocationsD M A I C


Damage Audit Sheet

22

D M A I C

6 Week Period; 7/25 – 9/15 Product was monitored in:

•Temporary Finished Goods locations, •All staging locations outside of each trailer entrance, •Inside each trailer, as trailers were loaded.•If product is damaged, it is sorted and dispositioned and the order is reduced by the quantity damaged, if approved, or the missing sheets are remade at the customer’s request.

While all three shifts conducted two audits per shift, the entire 6 week monitor/measure phase prevented any QVRs from being generated by customers for loading damage received.


Cost Analysis/ COPQ

23

D M A I C

TasksAverage

hours per Task Hourly Rate

Cost of Element

Material Costs

External Failure $

Internal Failure $

Total Failure Cost

1. Customer Service receives complaint 0.20 $25.00 $5.00 N/A $5.00 N/A $5.00

2. Forwards info to QA and Production 0.10 $50.00 $5.00 N/A $5.00 N/A $5.00

3. Production Superintendent investigates problem

0.50 $50.00 $25.00 N/A $25.00 N/A $25.00

4. Cost of part N/A N/A N/A $776.27 $776.27 N/A $776.275. Production / QA investigates the problem 4.00 $50.00 $200.00 N/A N/A N/A $200.00

6. Response and requested credit is provided to customer

0.75 $50.00 $37.50 776.00 $813.77 N/A $776.27

Total - - - - - - $1,011/ ea.

Avg. Monthly Avg. Labor Avg. Material Avg. Total Total

Damage $Total Failure

Annual annualized Failures = 52 # QVRs $ per QVR $ per QVR $ per QVR per year per year 4.4 $49.55 $776.27 $825.82 $42,943 $52,586.04

(50% reduction ) = $26,293.02


Prevention Recommendations

24

Root Cause Recommendation Rationale Responsible/ Timeframe

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 will minimize customer credit requests. The scrutiny has already improved damage occurrences. This practice will continue.

QA Manager

Implemented July 25, 2016 and On-going for 1st Shift

There is no current standardized practices or procedures for loading and moving product during the loading process.

Develop a Standard Operation Procedure (SOP)

Developing a written procedure for the loading process will standardize the process which is a practice of highly reliable organizations and a best practice.

QA Manager/ Shipping Manager

Implemented by February 15, 2017

There is no current fork lift driver process training or competency skill verification.

Forklift Driver Training with competency qualification

Drivers will have a standardized method of loading and moving product, training on methods, methodology, and best practices will give the drivers the skills and competency to load and move product with less damage. The driver’s understanding of the training will be assessed using competency skill validation.

QA Manager

Implemented February 16, 2017 to March 10, 2017

Interviews revealed drivers 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.

A communication plan with verbal and visual techniques will be implemented to ensure routine briefs and visual cues informing drivers of current performance measures status.

Communicating cost and frequency of damage with expected goals between leadership and drivers will encourage personal investment and result driven behavior. Weekly routine communication will include the drivers in the process improvement aspect encouraging buy-in.

QA Manager/ Shipping Manager

Implemented March 13, 2017 and on-going

D M A I C


Failure Analysis Recommendations

25

Root Cause Recommendation Rationale Person Responsible/ Timeframe

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.

QA Manager

Implemented February 1 – 15, 2017

Independence has not collaborated with other companies in the field and has not conducted their own studies on loading damage.

Consult w/ Rite Hite Corp for Best Practices

Independence will benefit from other company's lessons learned and research results regarding loading damage. Implementing best and proven practices will minimize damage frequency internally prior to shipment. This effort may impact the SOP and training aspects.

QA Manager

Implemented by May 1, 2017

There are missed opportunities to expand the uses of the corrugated product made by Independence, Inc.

Pursue benchmark venture w/ Ecologic bottles

Working with an innovative company and expanding the uses of the product will increase business opportunities for the company. This process may take months to establish a business contact and relationship. This is reflected in the timeline.

QA Manager

Implemented by April 1, 2017

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.

QA Manager

Implemented by April 30, 2017

D M A I C


Lift Product

from production

line via fork lift

Product Disposition

Product scanned by computer which determines where product goes next

Product set down/ stacked in finished goods area by fork lift

Product picked up in finished goods area by fork lift

Product set 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 set 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

Future Process

Damage Detection

Audit Completed by

QA/ Shift Supervisor

Damaged Product

Removed

D M A I C


Secondary Benchmark ResearchIn the article “Stop Load Damage”, William Atkinson discusses research results that focus on loading freight and cargo practices that minimize product damage prior to and during transit (2006).

Topics discussed in this article are:

1.Handling Practices

2.Loading Practices

3.Load Configuration

4.From Principles to Practice (pp. 2-3).

In the article “Liquids in Cardboard Containers”, Julie Corbett, founder and chief executive (Ecologic Brands), said the bottles generate 59 percent less plastic waste, 37 percent fewer carbon dioxide emissions and consume 48 percent less energy than equivalent plastic bottles (2013).Topics discussed in this article are:1.Corrugated board recycling is big business right now2.Converting 1 million pounds of discarded boxes each month3.Produce 6 million bottles per year, from those discarded cardboard boxes for house-brand products now, to potentially 60 million bottles per year in the future4.Ecologic’s fiberboard bottles -- which have a plastic liner -- are an earth-friendly replacement for plastic bottles5.Other manufacturing applications now connect into the recycling world


Implementation Strategy

28

D M A I C


Implementation Cost

29

D M A I C

Prevention Plan Costs

Root Cause DescriptionCorrective Action Rationale

Annual Hours Needed $/hr. Rate Total $

1. Lack of SOP Write SOP Standardize the process 2.0 $50 $100

2. Lack of Training (3rd) Train & qualify 3rd shift

Standardize the process 10.0 $50 $500

3. Visual ManagementImplement Visual

Management / Metrics

Raise Departmental Awareness 12.0 $50 $600

Total Total $1,200

Failure Reduction AnalysisRoot Cause Description Corrective Action Rationale

Annual Hours Needed $/hr. Rate Total $

1st shift had 6% total damage reportedImplement Visual Management / Metrics

Improvements to be added to SOP 4.0 $50 $200

Independence has not conducted a benchmark study to date

Consult w/ Rite Hite Corp for Best Practices

Utilize lessons learned to further reduce damage 4.0 $250/hr. $1,000

Missed opportunities to expand business opportunities in this direction

Pursue benchmark venture w/ Ecologic bottles

Expanding market share TBD TBD TBD

No real time monitoring of trailer damage inside trailer

Add cameras facing inside of loading trailers

to obtain additional information for root

cause analysis2.0 + 12.0 $35/hr; $3000

Equip. $3,490

Total Total $5,890


Return on Investment (ROI)

30

ROI

Achievable failure reduction (50%) $26,293 Prevention dollars = $1,200 = 21.91

Benefit / cost ROI = 21.9 : 1

D M A I C

ROI with Failure Reduction Analysis

Achievable failure reduction (50%) $26,293 Prevention dollars = $5,890 = 4.46

Benefit / cost ROI = 4.46 : 1


Payback Time

31

Prevention investment $1,200

Achievable savings =

$26,293 =

0.05years

Payback = 18days

D M A I C

Payback with Failure Reduction Analysis

Prevention investment $5,890 Achievable savings = $26,293 = 0.22years

Payback = 80days


Monitoring and Control Plan

32

Issue Date: 18-Oct-16Approved by : Team

Independence NGS Project Name: Loading Damage Reduction

Approval date: R1 10/19/2016 Cohort #116Process Flow

Manufacturing/ Machine

Characteristics Methods Evaluation & Measuring Technique

Reactions if Out-of-Control Conditions are

Encountered Sequence Number

Process Description Process Step Product

Target Specification /

ToleranceSample Size Sample

FrequencyControlling

Owner

10A Step 1 Production Forklift Lift product

from lineStep 1 damage free (zero other defects)

0.0 +/- .050 without scores 0.0 +/- .075 with scores

Every Unit Every

Set-up

Every Piece as

neededForklift Driver Tape Measure

Quarantine unit and

notify shipping

20A Step 2 FG Forklift

Product relocated in FG Step 1 damage free

(zero other defects)


Every Unit Every

Set-up

All units within observed reach of audit

QA Dept. Tape Measure

Quarantine unit and notify shipping, scheduling, and

production

30A Step 3 FG Forklift

Product picked up from FG Step 1 damage free



Every Unit Every

Set-up

Every Piece as


Quarantine unit and

notify shipping

40A Step 4 Stage Forklift

Product relocated next to

trailer Step 1 damage free (zero other defects)


Every Unit Every

Set-up




production

50A Step 5 Stage Forklift

Product picked up next to trailer Step 1 damage free



Every Unit Every

Set-up

Every Piece as


Quarantine unit and

notify shipping

60A Step 6 Trailer Forklift

Product relocated left or right side into



Every Unit Every

Set-up




production

70A Step 7 Trailer Forklift

Product relocated within



Every Unit Every

Set-up

Every Piece as


Quarantine unit and

notify shipping

D M A I C


Results

Loading damage (forklifts) has shown a natural oscillation above and below the mean over the last three years, derived from customer returns. However, as show below, rises in returns are approximately semi-annual, during peak winter and summer months. SPC represents in and out of control conditions as they happen.

Although 1st shift has been monitored before the measurement phase and continues to be monitored semi-routinely, the only time in three years that this metric ever hit zero damage, was specifically when all three shifts were being monitored. Therefore, a detectable difference exists when monitoring all three shifts.

Wertheimer should be given more care during handling, due to this customer’s elevated sensitivity to damage details and due to their large purchase volume; see customer Pareto diagram.

33


Champion Review Well thought out Reasonable expectations for change Excellent understanding of our process Professional attitudes Open to ideas and perspective

34


Lessons Learned

35

The voice of customer (VOC) is necessary for problem solving. While data was collected and shared, collected data should be briefed to the team on a

scheduled basis to encourage understanding and team buy-in; perhaps weekly or bi-weekly.

Due to the fast-paced manufacturing environment and high demand for on-time delivery, it is challenging to communicate as a group between employees and shifts.

The establishment and conformity of communications plans and ground rules are critical components of team development. Interpersonal skills are paramount to project success.

It is essential to identify internal weaknesses in an effort to exploit and fortify them. Identify and capitalize on internal/personal strengths in an effort to optimize productivity and overall project objectives.

Never rule out any thoughts from brainstorming/group activity when creating Cause & Effect diagrams.

Pareto charts are an excellent tool to use when pinpointing where your main problems are occurring.

Statistical Process Control (SPC) is a key element and rigorous approach for deciding when a process has changed or needs intervention.


This material is protected by United States copyright laws. You must treat this publication like any other proprietary material. No part of this material may be copied, photocopied, reproduced, translated, or reduced to any electronic medium by individuals or organizations outside of The National Graduate School of Quality Management without prior written consent from the National Graduate School of Quality Management. For information, please call 800.838.2580 or visit www.ngs.edu. © 2014 The National Graduate School of Quality Management.

363636

Celebrating 20 YEARS of Quality Education

Documents

Final MBP Presenatation 1-27-17