Reduction in Cost of Poor Quality (COPQ)€¦ · 2 Reduction in COPQ 15 15 15 10 5 10 10 80 3 High grinding efficiency in Black primer 9 9 9 2 3 6 2 40 4 OTIF improvement (Bi-weekly

1

Reduction in Cost of Poor Quality (COPQ)

Quality improvement project

PROPRIETARYAXALTA COATING SYSTEMS

About Axalta

Axalta Coating Systems: fact file150 years in the coatings industry

46 manufacturing facilities 4 global technology centers

30+ country technology laboratories47 customer training centers

Doing business in 130+ countries100,000+ customers, 4,000+ distributors

More than 13,000 employees 1,400+ scientists, engineers and technology staff

1,000+ patents2016 net sales of $4.1 billion

HistoryFor more than a century and a half, Axalta

has been at the leading edge of developing coatings and application tools that are designed to help our customers

succeed. We will continue to evolve as we have from the inception of our business in

1866 to manufacturing next generation, more environmentally compatible

products needed in the 21st century. Our commitment to quality, technology, and innovation will enable us to continue to

put our customers first and lead the industry for the next 150 years.

Axalta IndiaState of the art manufacturing facility is

located at Savli in Vadodara (India) catering to both local as well as regional

requirement for the Refinish , Automotive Plastic Coatings and Industrial segments covering Thailand, Indonesia, Sri Lanka,

Abu Dhabi, Philippines, South Korea, and Malaysia

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Axalta – Customers and Products

Light VehiclesVehicle coatings are our oldest products and date back to the carriages of the 19th century. First applied to automobiles more than 90 years ago, Axalta coatings are visible today on most of the world’s leading cars, light trucks, and SUVs. For discerning buyers, the color and visual effects created by today’s sophisticated paints can be one of the most important deciding factors in the choice of a new car. And, beneath the colorful finish, our coatings protect the metal and composite components of the body, adding years to the vehicle’s life.

Commercial VehiclesCoatings on heavy duty trucks, buses, and trains are designed to protect vehicles from the destructive effects of constant exposure to weather, sunlight, and harsh road conditions. Colorful coatings also have become an integral part of corporate marketing strategies. Many logistics and delivery fleets, as well as manufacturers of buses, trains, and agricultural and construction equipment, use color to promote their specific brand identity. This combination allows for highly recognized vehicles that stand out on the road and stand up to the elements.

RefinishNo matter how tough the coating, the need for repairs is inevitable in the life cycle of almost any vehicle due to aging, collisions, and other unavoidable events. Axalta provides a full spectrum of coatings and application technologies that enables the collision repair industry to match color and repaint vehicles to meet the original specifications. Our coatings for repair and our color matching tools are designed to help refinish technicians achieve a perfect color match as efficiently as possible. Business management tools from Axalta designed to help better manage the repair process can increase body shop efficiency and productivity.

IndustrialIndustrial development has evolved and so has the need for sophisticated coatings that are formulated to protect a catalog of diverse products from harsh environments and operating conditions. Axalta coatings protect pipes from corrosion underground and add beauty to household appliances. Architectural coatings enable outdoor structures such as building facades and outdoor furniture to withstand extreme climates. Electrical insulation coatings protect products ranging from large electric motors to the smallest electronic components of computers to improve their efficiency while saving energy. Axalta electro coat products protect materials from corrosion.

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The market situation today in India is competitive, whereinthe businesses are facing big challenge to provide theircustomers with products at a low cost without affecting thequality of the product and services. In order to sustain thiscompetition, Axalta Coating systems India Pvt. Ltd. isfocusing to reduce the Cost of Poor Quality (CoPQ).

CoPQ is defined as “the cost which would beeliminated if a company’s products and the processes inits business were perfect”.

‘Reduction in CoPQ’ project helped Axalta India to identifyprocesses improvement opportunities in its value chain,which further were evaluated in relation to otherimprovements and loss reduction.

Accomplishment of this project helped AxaltaIndia to realize CoPQ reduction from 0.43% of sales to0.20% of sales in 2016. Audited savings to the tune ofK$101.55 or ₹66 lakhs (INR)

Project summary

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▪ 1.1.0 Understanding the Context for Project Selection

✓ 1.1.1. A – Who was responsible for selecting the project?

1. Project and team selection

IMPROVEMENT METHODOLOGY FRAMEWORKCRITICAL OPERATIONS TASKS (COTs)

Project - Reduction in Cost of Poor Quality (COPQ)

COT – Critical Operations TaskAP – Asia PacificQM – Quality ManagementEHSS – Environment Health Safety & Security

Goal Setting

PROJECT SELECTION COMMITTEE

This is an improvement opportunity case

5SVisual Performance Management

KaizenAutonomous MaintenanceProblem Solving

Self Managed TeamCompetence management

Supply chain managementInventory management

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Sales & MarketingProcurementSupply chain management

Pre-mixing Dispersion Let down Shading Filling FG warehouse

Raw material/Packaging material Warehouse

Mother Warehouse

Suppliers Customers

Inventory variation

Customercomplaints

Monthly plan

Product damage during transit

Customer Support Representative

▪ 1.1.0 Understanding the Context for Project Selection

✓ 1.1.1. B – What background information on the company or those who selected the

project was provided to better understand the context of the project?


• Axalta India caters to both local as well as regional requirement for the Refinish , Automotive Plastic Coatings and Industrial segments covering Abu Dhabi, Indonesia, Philippines, South Korea, Malaysia & Thailand.

• In 2015, CoPQ losses were high, i.e., 0.43% of net sales

PAINT MANUFACTURING VALUE STREAM POPULAR PRODUCTS

AXALTA INDIA IS EXPORTING TO MIDDLE EAST, ASIA PACIFIC REGION COUNTRIES

Cost of Poor

Quality (CoPQ)

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▪ 1.2.0 Project Selection Process

✓ 1.2.1. A – How was the gap or opportunity brought into the attention of the project identification group?

✓ 1.2.1. B – What was the opportunity (process improvement)? 1.2.1.C - What area of the organization had the gap or the opportunity?


PROJECT IDENTIFICATION GROUP

Increase in COPQ

1.2.1.C

1.2.1.A

1.2.1.B

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All customer complaints recorded in SFDC portal

Financial reports collected through SAP (ERP system)


✓ 1.2.2. A – What data was generated to help select the project?


GL Code Particulars 01'15 02'15 03'15 04'15 05'15 06'15 07'15 08'15 09'15 10'15 11'15 12'15 Grand Total

Net Sales 3,783,753 3,656,853 3,822,433 3,650,317 3,723,781 4,234,768 3,708,550 3,675,989 4,131,155 3,477,247 3,293,219 3,485,346 44,643,411

58201000 Claims Paid (23,499) (36,378) (155,609) (28,571) (36,980) (36,016) (35,850) (31,420) (5,712) (34,349) (53,197) (92,446) (570,026)

58205000 Claims Paid 23,933 36,627 157,991 53,451 38,439 36,202 41,521 31,949 33,657 34,349 53,465 93,704 635,287

Net Inv Claims Paid 434 249 2,383 24,880 1,459 186 5,671 529 27,944 - 269 1,258 65,260 Claims Paid % 0.01% 0.01% 0.06% 0.68% 0.04% 0.00% 0.15% 0.01% 0.68% 0.00% 0.01% 0.04% 0.15%

57111200 Inv Adj (2,287) - - - - 18,522 52,616 (10,920) 8,460 (11,644) 273 (6,933) 48,088

57112200 Inv Adj (1,778) (788) 26,245 23,239 2,140 (117) 133 2,288 1,340 16,676 1,064 (2,204) 68,239

57112210 Inv Adj 345 (761) 7,095 4,268 315 47 459 145 115 3,384 542 (239) 15,715

57132200 Inv Adj 0 (0) 0 0 (0) 0 (0) 0 0 (0) (0) (0) 0

57602200 Inv Adj (4,242) (5) (469) 174 108 6,751 (4,243) 92 (411) (4) 978 (1,837) (3,108)

Net Inv Adj (7,962) (1,553) 32,871 27,681 2,563 25,203 48,965 (8,395) 9,505 8,413 2,857 (11,213) 128,934

Inv Adj % -0.21% -0.04% 0.86% 0.76% 0.07% 0.60% 1.32% -0.23% 0.23% 0.24% 0.09% -0.32% 0.29%

Total COPQ (7,528) (1,305) 35,253 52,561 4,022 25,389 54,636 (7,866) 37,449 8,413 3,125 (9,955) 194,195

COPQ % against Sales -0.20% -0.04% 0.92% 1.44% 0.11% 0.60% 1.47% -0.21% 0.91% 0.24% 0.09% -0.29% 0.43%

108393

194195

0.47%0.43%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0

50000

100000

150000

200000

250000

JAN-JUN2015

YTD'15

% C

oP

Q a

gain

st s

ales

Co

PQ

in U

S$

2015

Cost of Poor Quality - CoPQ

Total COPQ COPQ % against Sales

Customer feedback

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✓ 1.2.2. B – What methods and/or tools were used to assess or prioritize the need for the project?


Financial

payback

Data

availability

Customer pain

caused by the

problem

Urgency of

problem to be

resolved

Effect on other

systems

(SQDIC+P)

Management

interest or

support

Ease to solve Score

1Cycle time improvement in activator cell

(from 1 batch/day to 2 batches/shift)9 15 9 10 3 10 10 66

2 Reduction in COPQ 15 15 15 10 5 10 10 80

3 High grinding efficiency in Black primer 9 9 9 2 3 6 2 40

4

OTIF improvement (Bi-weekly plan)

* Solid vessel conversion

* Batch size improvement of metlock activator

9 3 9 6 3 6 6 42

5 Cycle time improvement in primer cell 9 9 9 6 3 6 6 48

6 Yield improvement in activator cell 9 9 3 6 3 6 6 42

Weightage Rating scale1-Low

2-Medium

3-High

1-Low

3-Medium

5-High

S.No. Project name

Evaluation criteria (most important)

KPI UoM

Cost

Plant Fix cost Absolute KINRPlant Fix cost / Ltr INR/ LtrTotal FPDE % SaleTotal FPDE INR/LtrVFPDE INR / LtrFFPDE INR / Ltr

COPQ $ KOPE / month $ KCapex Spend Major $ KCapex Spend Minor $ KAxalta way Savings $ K

PDCA

Brainstorming

Decision matrix

KPI1

2 4

3

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✓ 1.2.2. C – Why were these methods and /or tools used to select the project?


Method/Tool Reason for use Method/Tool Reason for use

1. Key performance indicator (KPI) is a Management tool to monitor performance of Business related goals

2. This tool helped us to identify the metric to be improved

1. Brainstorming is a ideageneration tool

2. This tool helped us to identify core areas of action

1. PDCA tool is a performance measurement tool

2. This tool helped us to decide the Metric to be worked upon.

1. Many improvement ideas were generated during the brain storming session

2. This tool helped us to prioritise the project to be taken up

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Inventory management

GLOBAL GOALS

COST & QUALITY

Improving quality and the customer experienceFully execute on the Axalta Way to transform cost structureManage costs which do not benefit growth Continue to be a growth oriented, best in class commercial coatings supplier Achieve overall sales, profitability and growth plans

SITE GOALS

COST &

QUALITY

Customer complaints

Axalta way Savings

Plant Fix cost / Ltr

VFPDE

FFPDE

COPQ

OPE / month

Capex Spend Major

Capex Spend Minor

Axalta way Savings


✓ 1.2.3. A – What goals (organizational and / or local), performance measures, and / or strategies were the project expected to impact?

✓ 1.2.3. B – What was the relationship between the stated measures and perceived gap in 1.2.1?


AREA PERCEIVED GAP

Cost of Poor Quality(K$)

Distribution(Transportation)

Customer end

Packaging damageLeakage issues

Product complaintService complaint

Inventory variation

1.2.3.A 1.2.3.B

STATED MEASURE

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✓ 1.2.3. C – What was the problem / project objective statement that expresses where the organization wanted to be at the end of the project?


Problem Statement Goal Statement

In Year-2015, Organizational CoPQ was

high, i.e.; 0.43% of net sales. This resulted

in negative affect on COPQ target.30% reduction in COPQ losses by the end

of December 2016

Project Scope Business case / Financial ImpactIn Scope :- Loss on claims paid for India

manufactured Product and service

complaints including distribution losses,

losses due to Inventory variation

Out of scope :- Claims paid for imported

Product and service complaints including

distribution losses

Reduction in CoPQ loss by 30% i.e.;

$58K (INR 37,70,000) against year 2015

CustomerVoice Of Customer

(VOC)CTQ's for this project

External

customer

Improvement in Product and

Service quality

Reduction in CoPQ lossesSite

Management

Reduce inventory variation

Reduce in-transit damages

Reduce Product and service

complaints

Defects & Metrics Project Team

Operational Definition : Costs

associated with losses due to claims

paid on account of in-transit damage of

finished goods, inventory mismatch,

damage of packaging material, and

poor product quality.

Project

Champion:Sandeep Batwe

Process Owners: Santosh Tipnis, Atul

Upadhye

Defect Metric (CTQ) measurement:

CoPQ >0.20% of net sales

Current baseline : CoPQ = 0.43%

Current baseline period: 2015

Core Team

Members:

Hardik Oza, Amit

Desai, Ajinkya Joshi,

Viral Mehta, Prasad

Menon, Hiren Bhatt,

Vijay Parashar,

Santosh Shatpalkar

Milestones Approval

Phase Date PlannedDate

Completed

Process owner's name and

signatureSantosh Tipnis

Define 31.03.2016 31.03.2016

Measure 15.04.2016 20.04.2016Champion's name and

signature

Sandeep

Batwe

Analyze 30.06.2016 10.07.2016

Improve 30.09.2016 27.11.2016Finance Representative

signatureShailen Mehta

Control 30.11.2016 26.12.2016

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▪ 1.3.0 Team Selection and Preparation

✓ 1.3.1. A – How were the stakeholders groups identified?

✓ 1.3.1. B – What or who were the stakeholder groups?


1.3.1.A

1.3.1.B

• To consider all the elements

within the value chain

• To set clear boundaries

• To identify project stake holders

within the project boundaries

Improvement opportunity

End customer

Area

Manufacturing,WarehouseDist. Warehouse

Packaging damageLeakage issues,Inventory variation

Product complaint,Service complaint

Execution team (CFT)

Quality

Stake holder group

Production, Warehouse,Supply chain

Ajinkya Joshi, Viral Mehta, Prasad Menon,Hardik Oza Hiren Bhatt

Vijay Parashar, Santosh Shatpalkar

Input OutputProcess

MPS

CustomerSupplier

Sales and marketing

MRP

Sourcing

RM/PM supplier, Logistics service provider

Quality

Warehouse, MPS, Quality

Site FG warehouse

Distribution warehouse

Sales Forecasting

Forecasted procurement plan

Firm procurem’nt plan,Rate contr’ct

PO, Raw mat., In-bound logistics

Inspection plans

RM,Process order prod.plan, insp’n plan

FG, Stock transfer order (STO)

Sales order and FG

Production planning

Demand planning

RM/PM planning

RM/PM ordering

RM arrival on site

Sampling and inspection

Manufacturing

Finished Goods movement

Distribution of FG

Firm Production schedule

Forecast of Procurement and Production plan

Firm Procurement plan

Purchase order

RM availability on site

Approved RM/PM

Approved Finished good

FG availability at Distribution warehouse

Sales

Production

MPS, Mat. Req. Planner (MRP)

Sourcing

RM/PM supplier

Warehouse

Warehouse

FG Warehouse

Distribution Warehouse

End customer

Forecasted production plan

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1. Project and team selection ▪ 1.3.0 Team Selection and Preparation

✓ 1.3.2. A – What knowledge or skill sets were determined to be necessary for successful completion of the project?

✓ 1.3.2. B – To what extent did the existing stakeholder groups have the required knowledge or skills?

✓ 1.3.2. C – What additional knowledge and skills were brought in to make the project successful?

Project

teamRole

Problem solving &

analytical skill

Functional

knowledge

Product

knowledge

System

knowledge

MUDA

VA/

NVA

7QC,

SIPOC

RCA

VSM,

Contr’l

impact

8D

Wareh

ouse

mgmt.

MFG

process

Logistics

& Dist.

Prod.

handli

ng

Packagin

g

know’ge

SA

P

SFD

C &

ETQ

QM

S

Vijay

Parasha

r

Team

Lead

Hardik

Oza

Team

mem.

Santosh

Shatpal

kar

Team

mem.

Viral

Mehta

Team

mem.

Prasad

Menon

Team

mem.

Amit

Desai

Team

mem.

Hiren

Bhatt

Team

mem.

Identified Gap

Skill available

Not applicable 1.3.2.A 1.3.2.B

Packaging Material

development

Vendor quality

management system

Learning best practices from

sister plants

Additional skill sets brought

in

1.3.2.C

Problem solving &

analytical skill

Types of wastes

RCFA, VSM

Functional knowledge

Warehouse management

Logistics & Distribution

Tool knowledge

SAP knowledge

QMSProduct

performance

VA/NVA, 7QC Tools,

SIPOC

manufacturing processes

Knowledge of packaging

SFDC, ETQ platform

Product knowledge

Product handling

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✓ 1.3.3. A – Before the project started, what specific training

was done?

✓ 1.3.3. B – Before the project started what was done to

prepare the team to work together as a team?


Project kick-off

❖Sponsor briefed on the project❖Team members briefed on the project❖Project officially started

Communication plan

❖Communication plan for the team members to be informed on findings etc.

❖Stationary required for daily meeting like flip charts, post-it pads etc. made available

Defined Roles & Responsibility

❖Defined roles for team leader and members within the scope

Project Schedules (Gantt chart)❖Gantt chart prepared❖Weekly meeting

schedules decided

Project database creation

❖Centralized database created for data collection to be referred

❖Read/write access right given to team members❖ Installed Minitab software in every team

member’s computer

Training on Logistics and distribution, 4W/2H/1C

Training on SFDC, ETQ platform

Training on QMS

Training on VSM, Control

impact matrix, 8D

Training to fill

identified gaps

1.3.3.A

1.3.3.B

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✓ 1.3.4. A – What roles and expectations were determined ahead of the project?

✓ 1.3.4. B – What deadlines and deliverables did the team have to consider ahead of actually starting the project?


Project Sponsor/champion

Project Leader

Functional Leader

Team member

Key roles/expectations

Oversees that process improvement projects are aligned to company’s

business goals and strategies

Ensure that right team members are selected for the project

Gets buy-in from other stake holders in the company

Approves any financials that are required for completing the project

Acts as a subject matter expert for the process and guides the project

team from time to time

One who will need to be kept informed on direction, findings

Green Belt resource responsible for driving the improvement project

Ensure data availability for analysis

Follow Project Management timelines and ensure timely completion of

each phase

Highlight / Call out any challenges that may arise in the project and

require guidance from project sponsor/champion

Project

Road Map

Generate possible solutions, Prioritize and Pilot

Solutions, Validate and justify solutions,

Implementation of Solution30.09.2016

Improve

Identify and prioritize possible

X’s (Cause and Effect Analysis),

Control and Impact Analysis, Data Collection Plan

15.04.2016

Measure

Identify and validate Vital X’s (Data / Process

Door Analysis), Root Cause Identification

30.06.2016

Analyze

Project Selection and Prioritization, Project

Charter (with approval) , SIPOC / Process Flow

31.03.2016

Define

Process control Analysis, Quality Net Saving calculations,

Monitoring and Response Plan,

Institutionalize and Sign-off

30.11.2016

Control/Verify

1.3.4.A1.3.4.B

Contribute with process knowledge and expertise during the project

Provide helping hand to Green belt for data gathering and analysis

Contribute during brainstorming sessions in identifying causes and

solution gathering

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9



✓ 1.3.4. C – Before the project started, what team routines, including communication, were established?

Centralized database created for data collection

Team members to update all relevant documents

required for project completion and documentation

MOMs to be circulated to all project stakeholders

for every meeting

All key decisions / changes to be signed off by

Sponsor / Champion via e-mail

Project

Schedule

Project

database

Communic

ation

Gantt chart prepared for the team to work with

deadlines

Weekly meeting schedules decided for the team

In the event of any change in schedule project

leader to inform team members


Project Gantt Chart

Team Key Routines and

Communication plan

17


2. Current Situation and Root Cause / Improvement Opportunity Analysis

18

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▪ 2.1.0 Key Measures Expected of the Project

✓ 2.1.1. A – What specific goals and / or measures was the team trying to achieve with the project?

✓ 2.1.1. B – What additional potential benefits, other than the specific goals and / or measures, was the project expected to impact?


Project Goal Statement

30% reduction in COPQ losses by December 2016 against year 2015

Voice of Customer(VOC)

• Improvement in Product and

Service quality

• Reduce inventory variation

• Reduce in-transit damages

• Reduce Product and service

complaints

Project impact areas

End customerImprovement in Product and Service quality

Projected Improvements

Reduce inventory variation

Reduce in-transit damages

Inventory

Material shipment

Additional Benefits

Real time information on materials.

Improve productivity and speed up data collection process

Streamline WH management system

Elimination of NVA and minimization of wastages

Elimination of misloading cases

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▪ 2.2.0 Possible Root Causes / Improvement Opportunities

✓ 2.2.1. A – What methods and / or tools were used to identify possible root causes / improvement opportunities?

✓ 2.2.1. B – Why were these methods and / or tools selected (to identify possible root causes / improvement opportunities?

✓ 2.2.1. C – How was the team prepared to use these methods and / or tools t (to identify possible root causes / improvement opportunities)?

SIPOC VALUE STREAM MAPPING BRAIN STORMING FISH-BONE

1. This tool helped us to identify project boundaries, and identify all the elements within the value chain

1. This tool helped to perform detailed process mapping and to pin point the areas of concern in the value stream

1. Brainstorming is a idea generation tool

2. This tool helped us to identify core areas of action

1. visualization tool for categorizing the potential causes of a problem in order to identify its root causes

The team members had the knowledge of using brain storming, SIPOC, Fishbone diagram toolREFER 1.3.2.B


2.2.1.A

2.2.1.B

2.2.1.C

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Inventory variation

Calibration of radarAccounting of sticking lossesWeight variation in weigh scaleCounting errorsData punching errors during stock countMultiple codes for single materialDifference in UoM

Products and service complaints

Rework cost Field credits

LeakagePoor gumming of labelsRustingShort- receiptWrong MRPWrong batch no. dispatchedWrong shelf life printedMixing of cans

In-transit damage and leakageExpired materialObsolete productCustomer returns

Short supplyIn-transit damage and leakage

SIPOCIdentification of project

boundaries

▪ 2.2.0 Possible Root Causes / Improvement Opportunities

✓ 2.2.2. A – What data was generated and how was the data analyzed to identify the possible root cause / improvement opportunities?

✓ 2.2.2. B – What were the possible root cause / improvement opportunities? 2.2.2.A

2.2.2.B

BRAIN STORMINGTo identify core areas of action

VALUE STREAM MAPPINGIdentification of areas of

concern

CAUSE & EFFECTS ANALYSISCategorization of all possible

reasons

21


▪ 2.3.0 Final Root Causes / Improvement Opportunities

✓ 2.3.1. A – What methods and / or tools were used to identify the final root cause(s) / improvement opportunities?

✓ 2.3.1. B – Why were these methods and / or tools selected to identify the final root causes(s) / improvement opportunities?

This tool helped us to identify core areas of action

This is a prioritization tool that is used to prioritize causes which can be controlled

To narrow a large list of possibilities to a small list

visualization tool for categorizing the potential causes of a

problem in order to identify its root causes

Walking around to look for wastes and opportunities

Pareto Analysis, identify and list problems and their causes. Then

score each problem and group them together by their cause

To validate the root cause

8D – To identify, correct, and eliminate recurring problems

5Why – To peel away the layers of symptoms which can lead to the

root cause of a problem


Product service

complait

Inventory variation

Field credits

Rework cost

CoPQ

Brain storming

8-D, 4W/2H/1

C

Multi-voting

Control impact matrix

Pareto

Gemba walks

Ishikawa

Brain stormin

g

Hypothesis

testing

8-D, 4W/2H/

1C

Multi-voting

Control impact matrix

Pareto

Gemba walks

Ishikawa

Effect – Cost of poor quality

Contributing areas

Methods/tools used

22

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✓ 2.3.1. C – How was the team prepared to use these methods and / or tools to identify the final root causes / improvement opportunities?


VSM 8D

4W/2H/1CControl impact

matrix

Trainings

Refer 1.3.3.A

23



✓ 2.3.2. A – What data was generated and how was the data analyzed in order to identify the final root causes / improvement opportunities?

✓ 2.3.2. B – What are specific examples of data analysis that led to the final root cause?


Inventory variation

1. Write-off data through ERP

2. Write-on data through ERP

2.3.2.A

GL Code Particulars 01'15 02'15 03'15 04'15 05'15 06'15 07'15 08'15 09'15 10'15 11'15 12'15 Grand Total

Net Sales 3,783,753 3,656,853 3,822,433 3,650,317 3,723,781 4,234,768 3,708,550 3,675,989 4,131,155 3,477,247 3,293,219 3,485,346 44,643,411

58201000 Claims Paid (23,499) (36,378) (155,609) (28,571) (36,980) (36,016) (35,850) (31,420) (5,712) (34,349) (53,197) (92,446) (570,026)

58205000 Claims Paid 23,933 36,627 157,991 53,451 38,439 36,202 41,521 31,949 33,657 34,349 53,465 93,704 635,287

Net Inv Claims Paid 434 249 2,383 24,880 1,459 186 5,671 529 27,944 - 269 1,258 65,260 Claims Paid % 0.01% 0.01% 0.06% 0.68% 0.04% 0.00% 0.15% 0.01% 0.68% 0.00% 0.01% 0.04% 0.15%

57111200 Inv Adj (2,287) - - - - 18,522 52,616 (10,920) 8,460 (11,644) 273 (6,933) 48,088

57112200 Inv Adj (1,778) (788) 26,245 23,239 2,140 (117) 133 2,288 1,340 16,676 1,064 (2,204) 68,239

57112210 Inv Adj 345 (761) 7,095 4,268 315 47 459 145 115 3,384 542 (239) 15,715

57132200 Inv Adj 0 (0) 0 0 (0) 0 (0) 0 0 (0) (0) (0) 0

57602200 Inv Adj (4,242) (5) (469) 174 108 6,751 (4,243) 92 (411) (4) 978 (1,837) (3,108)

Net Inv Adj (7,962) (1,553) 32,871 27,681 2,563 25,203 48,965 (8,395) 9,505 8,413 2,857 (11,213) 128,934

Inv Adj % -0.21% -0.04% 0.86% 0.76% 0.07% 0.60% 1.32% -0.23% 0.23% 0.24% 0.09% -0.32% 0.29%

Total COPQ (7,528) (1,305) 35,253 52,561 4,022 25,389 54,636 (7,866) 37,449 8,413 3,125 (9,955) 194,195

COPQ % against Sales -0.20% -0.04% 0.92% 1.44% 0.11% 0.60% 1.47% -0.21% 0.91% 0.24% 0.09% -0.29% 0.43%

Products & Service

complaints

& Rework

1. Complaint analysis reports2. In-transit damage reports

Field credit

1. Credit note details from SAP

What data was generated?How was the data analyzed to identify the root cause?

What are specific examples of data analysis?

2.3.2.B

24

13


▪ 2.3.0 Final Root Causes / Improvement Opportunities ✓ 2.3.2. C – What was(were) the final root causes / improvement opportunities?


Gassing tendency in

products

Cost of Poor Quality (COPQ)

Product complaints

Inventory variation

Rework costField credits

Leakage due to

packaging defects

Service complaint

Dust issue in

products

Rusting of tins

Short- supply

Mixing of cans in cartons

Calibration of radar in

HMI

Improper handling during

transit /loading unloading

Transshipment

Damages during transit

Improper palletization process

High product density Market return due to

damage

Leakage containers reworked

Any product defect

Material accounting

errors

Counting errors

Data punching errors

during stock count

Multiple codes for

single material

Weight variation in

weigh scale

Difference in UoM

Poor gumming

of labels

Wrong MRP

Wrong batch no.

dispatched Wrong shelf life

printed

Accounting of

sticking losses

Obsolete product

Vehicle condition

Order dispatch in

loose cartons

Service related issues

25




Weightage Rating scale

1-Low2-Medium3-High

1-Low3-Medium5-High

Scoring methodology

Score Impact

≥40 High impact

20-39 Low impact

<20 No impact

S.No. Project nameEvaluation criteria (most important)

Financial impact

Customer pain caused by the problem

Urgency of problem to be resolved

Effect on other systems(SQDIC+P)

Management interest or support

Score

28 Order dispatch in loose cartons 5 5 5 3 5 581 Leakage due to packaging defects 5 5 5 1 5 56

21 Dust issue in products 5 5 5 1 5 563 Rusting of tins 3 5 5 1 5 504 Look a like material 5 5 5 1 3 50

9Improper handling during transit /loading unloading .

5 3 5 1 5 50

10 Transshipment 5 3 5 1 5 5011 Damages during transit/ loading-unloading 5 3 5 1 5 505 Bulk storage variance 5 1 5 5 5 486 Counting errors 5 1 5 5 5 487 Data punching errors during stock count 5 1 5 5 5 488 Material accounting & stock taking errors 5 1 5 5 5 482 Gassing tendency in products 1 5 5 1 5 44

29 Bad road condition 5 3 5 3 1 4030 Wrong content on label 3 3 3 1 1 2812 Palletization process 3 3 3 1 1 2819 Wrong batch no. dispatched 3 3 3 1 1 2822 Short- supply 3 3 3 1 1 2823 Mixing of cans in cartons 3 3 3 1 1 2824 Multiple codes for single material 3 3 3 1 1 2813 High product density 1 1 5 1 1 2025 Accounting of sticking losses 1 1 5 1 1 2026 Obsolete product 1 1 5 1 1 2027 Vehicle condition 1 1 5 1 1 2014 Weight variation in weigh scale 1 1 3 1 1 1615 Difference in UoM 1 1 3 1 1 1616 Customer returns 1 1 3 1 1 1617 Poor gumming of labels 1 1 3 1 1 1618 Wrong MRP 1 1 3 1 1 1620 Wrong shelf life printed 1 1 3 1 1 16 26

14


1. Wrong content on label

2. Wrong batch no. dispatched

3. Short- supply

4. Mixing of cans in cartons

5. Multiple codes for single material

6. Palletization process

1. Defects in packaging material

2. Gassing tendency in products

3. Look a like material

4. Bulk storage variance

5. Material accounting and stock taking errors

6. Material Handling damages

7. Dust issue in products

1. Accounting of sticking losses

2. Obsolete product

3. Vehicle condition

4. High product density

1. Order dispatch in loose cartons

2. Bad road condition



Impact/Control Matrix

High ImpactLow Impact

Co

ntr

olla

ble

Un

con

tro

llab

le

Vital Xs’

27



✓ 2.3.3. A – How was the final root cause / improvement opportunities validated?


S.No. Vital ‘X’ Validation method

1 Defects in packaging material

• Dimensional analysis of tins for leakage• Stability study for leakage• Solubility test of seaming compound for

leakage• Humidity test for rusting• Salt spray test for rusting• Natural weatherometer study for rusting• Rolling ball tack test for poor gumming

2 Gassing tendency in products

• Lab test of Solvent by using Karl Fischer instrument

• Sampling inspection in lots• Change solvent combination• Replacement of formulation ingredients• Trial in different shaped cans• Trial with cans of same design from another

supplier• Review the Batch card parameter with

Standard best practice.

S.No. Vital ‘X’ Validation method

3 Dust issue in products

• Residue analysis

4 Look-a-like material

• Pareto of internal quality incidents

5 Bulk storage

variance

• Historical data

6 Material accounting and stock taking errors

• Historical data

7 Material Handling damages

• % of credit notes against sales value

28

15



✓ 2.3.3. B – What evidence showed that the final root causes / improvement opportunities were validated prior to solution development?


S.No. Vital ‘X’ Validation method Evidence


• Humidity test for rusting• Salt spray test for rusting• Natural weatherometer

study for rusting• Rolling ball tack test for poor

gumming


• Dimensional analysis of tins for leakage

• 1 week Stability study for leakage

• Solubility test of seaming compound for leakage Due to less curling thickness the

leakage is observed on the conipail Seaming compound

solubility test

Humidity test for rusting test

Salt spray test for rusting test

Rolling ball tack test for poor gumming

29







• Lab test of Solvent & resin by using Karl Fischer instrument


• DOE for solvent combination by replacement of formulation ingredients

30

16







• Trial in different shaped cans• Trial with cans of same

design from another supplier


• Review the Batch card parameter with Standard best practice.

31






3 Dust issue in products

• Residue analysis • 0.6mg residue observed from 17 kg material after filtration in one of the products

4 Look-a-like material • Pareto of internal qualityincidents

QIR analysis shows human error as major contributor in look-a-like cases

32

17






5

6

Bulk storage

variance

Material accounting

and stock taking

errors

• Historical data • HMI stock vs booked stock


• % of credit notes against sales value

RESINSPIGMENTISOCYANATE

600

500

400

300

200

100

0

CATEGORY 2

QT

Y

Boxplot of QTY

33


▪ 2.4.0 Project Management Update

✓ 2.4.1. A – How was the correctness of the initial project scope, deliverables, and timing confirmed (or, what changes were made?)


Project scope –No change

Project deliverables –No change

Timing –No change in Planned time line

Defects & Metrics Project Team

Operational Definition : Costs associated with losses due to claims paid on account of in-transit damage of finished goods, inventory mismatch, damage of packaging material, and poor product quality.

Project Champion:

Sandeep Batwe

Process Owners: Santosh Tipnis, Atul Upadhye

Defect Metric (CTQ) measurement:CoPQ >0.20% of net salesCurrent baseline : CoPQ = 0.43% Current baseline period: 2015

Core Team Members:

Hardik Oza, Amit Desai, Ajinkya Joshi, Viral Mehta, Prasad Menon, Hiren Bhatt, Vijay Parashar, Santosh Shatpalkar

Milestones Approval

Phase Date Planned Date Completed Process owner's name and signature Santosh Tipnis

Define 31.03.2016 31.03.2016

Measure 15.04.2016 15.04.2016 Champion's name and signature Sandeep Batwe

Analyze 30.06.2016 10.07.2016

Improve 30.09.2016 27.11.2016 Finance Representative signature Shailen Mehta

Control 30.11.2016 26.12.2016

34

18



✓ 2.4.1. B – How were stakeholders involved and / or communicated with during the root cause / improvement opportunity phase of the project?



• Participated in Project Steering Meetings

• Supported by ensuring resource availability as planned

• Provided guidance during project discussions

Project Leader Team Members Functional leaders (SMEs)

Stake holders

• Actively participated in brainstorming sessions

• Helped project team identify possible root causes

• Ensured team attendance in project tasks

• Helped with required historical data for various analysis

• Conducted Quality specific trainings

• Facilitated team on use of Quality tools / methods

• Administered action plan implementation

• Facilitated process tests • Assisted in creation of

process flows

How involved?

How communicated?• Monthly Project

review/toll gate review• Periodic project meetings

• Periodic project meetings/ tasks

• Periodic meetings

35



✓ 2.4.1. C – What stakeholder resistance was identified and / or addressed in this phase of the project?


Project Sponsor/champion Project Leader Team Members Functional leaders

Stake holders

Communication channels

No resistance No resistance No resistance No resistance

36

19



✓ 2.4.1. D – How was the appropriateness of the initial team membership and management routines confirmed (or, what changes were made)?


Project Team

• Team selection based on SIPOC analysis• Project deadlines planned by the project

team members

Management schedule

Confirmation of appropriateness of the Project team

• Routine checks done on planned dates v/s actual implementation dates

• Feedback and support received from Sponsor / Champion

• Minutes of meeting sharing after each meeting

• No changes • No changes

Changes proposed/made

37


3. Solution / Improvement Development

38

20


▪ 3.1.0 Possible Solutions or Improvements

✓ 3.1.1. A – What methods and / or tools were used to identify the possible solutions / improvements?

✓ 3.1.1. B – Why were these methods and / or tools selected?


This tool helped us to identify core areas of action

Compared with the best practice

5Why – To peel away the layers of symptoms which can lead to

the root cause of a problem

Walking around to look for wastes and opportunities

Subject Matter Expert To validate the root cause

8D – To identify, correct, and eliminate recurring problems

Brain storming

DOE

8-D

Benchmarking

SME

Process audit

Why why analysis

39



✓ 3.1.1. C – How was the team prepared to use these methods and / or tools?


Brain storming

• The team had the subject knowledge

• Covered during Yellow belt training for 1 hour

• Consultation from Subject matter experts

• The team had the subject knowledge

• Training conducted for 2 days, 2 hours each

• Training conducted on 8D for 1 day, 2 hours

• Training conducted for 2 hours

DOE

8-DBench

marking

SMEProcess

auditWhy why analysis

40

21


1. Process audit findings from supplier process audit2. Internal quality test specifications for packing material3. Air leak test data at supplier end4. Material gauge data5. DOE analysis on can design6. Calibration check for radar7. WPL data in HMI8. Losses due to Palletization process 9. Inventory analysis data for sister plants10. Products and service complaints data from customer


✓ 3.1.2. A – What data was generated and how was it analyzed?


DoEIshikawa

Brain storming

SMEProcess audit

Benchmarking

41



✓ 3.1.2. B – What are the possible solutions / improvements?


S.No. Vital ‘X’ POSSIBLE SOLUTIONS


1. Process improvement at existing supplier2. Identification of alternate supplier3. Internal quality testing for packing material4. Manual seaming process replaced with automated seaming process5. Improving in welding process at supplier end (ex. Welding rollers changed, thyristor fire card

changed)6. New overlap welder machine with double wire system, voltage stabilizer, fluctuation arrester,

chiller installation at supplier end7. Introduction of multi-head water leak tester in place of air leak tester at supplier end8. Start using VCI (Volatile Corrosion Inhibitor) paper, silica gel, Desiccant bags to avoid rusting of

tins9. Change in Gauge of 5 Ltr. & 4 Ltr. Rect. Tin Body from 0.25 mm. to 0.26 mm, & Top & Bottom

from 0.25 mm. to 0.27 mm


1. Can design modification2. Product formula upgradation3. Design the new inner cap with air vent provision, and leakage prevention

42

22



✓ 3.1.2. B – What are the possible solutions / improvements?


S.No. Vital ‘X’ POSSIBLE SOLUTIONS

3 Dust issue in products 1. 20 ltr lacquered drums replaced by 20 ltr conipail

2. RM quality improvement, 3. Inspection plan revision

4. Modification in paint mixing room with appropriate cartridge filter at Customer’s end

4 Look-a-like material 1. Stamping on inter-company look-a-like materials2. Colour coding on external vendor look-a-like barrels

5 Bulk storage variance 1. Calibration check for radar

2. Correction of WPL data in HMI

3. Pigging system implementation

6 Material accounting and stock taking errors

1. Bar coding of materials

2. WMS implementation & automation


1. Palletization process improvement, 2. Material dispatch in Pallet with proper shrink wrap

2. material handling training to W.H staff & transporter labours

3. Improvement in packaging quality

43



✓ 3.1.2. C – What evidence showed that the solutions / improvements identified were possible instead of final?


1. Process improvement at existing supplier2. Identification of alternate supplier3. Internal quality testing for packing material4. Can design modification5. Product formula revision6. Process change7. Design the new inner cap with air vent provision, and leakage prevention8. 20 ltr lacquered drums replaced by 20ltr conipail9. RM quality to be improved10. Inspection plan revision11. Modification in paint mixing room with appropriate cartridge filter at Customer’s end12. Stamping on inter-company look-a-like materials13. Colour coding on external vendor look-a-like barrels14. Calibration check for radar15. Correction of WPL data in HMI16. Pigging system implementation17. Bar coding of materials18. WMS implementation & automation19. Palletization process improvement20. Material to be dispatch in Pallet with proper shrink wrap21. Material handling training to W.H staff & transporter labours22. Improvement in packaging quality

EXAMPLE

44

23


▪ 3.2.0 Final Solutions or Improvements

✓ 3.2.1. A – What methods and / or tools were used to identify the final solutions / improvements?

✓ 3.2.1. B – Why were these methods and/or tools selected?

✓ 3.2.1. C – How was the team prepared to use these methods and / or tools?


This tool helped us to identify core areas of

action

Compared with the best practice

Decision matrix tool to rate the solutions

The tool was used to identify correct solution

through various lab trials

Subject Matter Expert

Brain storming

Benchmarking

SME DOE

Pugh matrix

Tool Team competency

Brain storming • Team competent

Pugh matrix • Training conducted for 2 days, 2 hours each day

Design of Experiments (DOE)

• Training conducted for 2 days, 4 hours each day

45



✓ 3.2.2. A – How were the methods or tools used to determine the final solutions? 3.2.2. B – What was the final solution?


Vital ‘X’ Final Solution Tool/method How the tool was used

Defects in packaging

material

1. Process improvement at existing supplier for leakage2. VCI paper, Desiccant bags, silica gel pouch

implementation for rusting issue

• Brain storming• Pugh matrix• DOE• SME• Benchmarking

• EXAMPLE

Action –VCI paper, Desiccant bags, silica gel pouch implementation

Tool – Brain stormingFocused group discussion on rusting issueTool – SMEPackaging experts invited for solution provisionTool – DOELab trials like humidity test, Salt spray test and weatherometer study conducted to test the sample. Based on the trial results the action decidedFinal decision based on Cost feasibility and speed of implementation

Gassing tendency in products

1. Design the new inner cap with air vent provision, and leakage prevention

Dust issue in products 1. 20 ltr lacquered drums replaced by 20 ltr conipail


Look-a-like material 1. Stamping on inter-company look-a-like materials2. Colour coding on external vendor look-a-like barrels

Bulk storage variance 1. Calibration check for Radar2. Correction of WPL data in HMI

Material accounting and stock taking errors

1. Bar coding of materials2. WMS implementation & automation

Material Handling damages

1. Palletization process improvement2. Material handling training to WH staff & transporter

labours

46

24



✓ 3.2.3. A – How were the final solutions validated?

✓ 3.2.3. B – What evidence showed that validation was performed prior to implementation?


Vital ‘X’Defects in Packaging material

Validation of solutionProcess improvement at Supplier end

Defects in packaging material –Leakage issue

Successful trials conducted to improve welding process at Supplier end

Successful trials conducted on seaming improvement at Supplier end

BeforeInconsistent Rubber seaming

AfterConsistent Rubber seaming

47






Vital ‘X’Defects in Packaging material

Validation of solutionVCI paper, Desiccant bags, silica gel pouch implementation for rusting issue

Defects in packaging material –Rusting issue

Took two can samples

Packed both cans in Multiguard 50 & kept in Humidity Chamber for testing

Physical observation after completion of 12 cycles

Above result clearly show & indicates that there are no sign of corrosion on both component. Materials are passing in

corrosion test

48

25






Vital ‘X’Gassing tendency in products

Validation of solutionDesign the new inner cap with air vent provision, and leakage prevention


Old inner cap design

New inner cap design with air vent designed

Improved inner cap design

49






Vital ‘X’Dust issue in products

Validation of solution1. 20 ltr lacquered drums replaced by 20 ltr conipail2. Modification in paint mixing room with appropriate cartridge filter at Customer’s end

Dust issue in productsBased on microscopic analysis of residue collected from 20 ltr internal lacquered drum, resin flakes observed in the residue. Also earlier method of paint mixing at customer end resulted into peeling off of internal lacquer. Hence we switched to 20 ltr open mouth tin plated buckets in addition to modification in paint kitchen at customer end

50

26






Vital ‘X’Look-a-like material

Validation of solution1. Stamping on inter-company look-a-like materials2. Colour coding on external vendor look-a-like barrels

Look-a-like materialVisual management implementation for barrel identificationValidation based on trials conducted on specific look-a-like

material

51






Vital ‘X’Material accounting and stock taking errors

Validation of solution1. Bar coding of materials2. WMS implementation & automation


▪ Automatic system (Bar coding) for materials handling in all production areas (Logistics and Factory)

▪ Use of wireless barcode scanners that collect all information

▪ Integration of bar coding system with ERP and WMS

▪ Validation based on adoption of best practice followed at Axalta China Plant

52

27






Vital ‘X’Material Handling damages

Validation of solution1. Palletization process improvement2. material handling training to W.H staff & transporter labours

Material Handling damagesValidation – New palletization and packing process trials conducted. Based on feedback from customer end, the process was validated

53



✓ 3.2.4. A – What additional potential benefits were anticipated from the final solutions?

✓ 3.2.4. B – Were the additional benefits anticipated prior to implementation?


BAR CODING SOLUTION• Real time data generated • NVA reduction like searching time• Elimination of misloading incidences

PRODUCT & PACKAGING DEFECTS• Supplier capability improvement• Customer delight• Elimination of near miss incidences• Cycle Time improvement

All additional benefits were anticipated prior

to implementation

54

28



✓ 3.2.5. A – What data was generated and analyzed to justify implementation?

✓ 3.2.5. B – What evidence showed that justification was performed prior to implementation?


Vital ‘X’ Final Solution Justification evidence

Defects in packaging

material

1. Process improvement at existing supplier for leakage

2. VCI paper, Desiccant bags, silica gel pouch implementation for rusting issue

• Improvement in seaming and welding process after successful trials

Without VCI paper With VCI paper

55









• No bulging observed during accelerated study after modification in inner vent

Dust issue in products 1. 20 ltr lacquered drums replaced by 20 ltr conipail


• Trials conducted at customer end with improved tins and no dust observed. Refer slide - 50

Before - Bulging Before – Good can

56

29







Look-a-like material 1. Stamping on inter-company look-a-like materials

2. Colour coding on external vendor look-a-like barrels

• Visual management improvement

Bulk storage variance 1. Calibration check for radar


• Calibration of radar resulted in improved radar readings. 10 trials conducted

Before After

57










• Formula ingredients bar codes defined and incorporated in the batch card formula

• Best practice adoption from other Axalta site

8681

94 93

0102030405060708090

100

Q1 2016 Q2 2016 Q3 2016 Q4 2016

IRA (%)

58

30







Material Handling damages

1. Palletization process improvement


• Pilot study was conducted in North region. The study results were found suitable

59



✓ 3.3.1. A – How was the correctness of the initial or updated project scope, deliverables and timing confirmed?


Project scope

Project Deliverable

Project Timeline

No change

No change

Analyze phase – Toll gate review got delayed by 10 days

Improve phase – Certain actions identified during analyze phase required capital investment as well as visits made to sister plants to leverage the learnings for feasibility study

For the rest - Scope Confirmed No change Identified

60

31



✓ 3.3.1. B – How were the stakeholders involved and communicated with during the solution phase of the project?



Stake holders


Obtaining approval for solution

Weekly team meetings or as per need basis

Weekly team meetings or as per need basis

Participated in decision making and

Involvement in various stages of the project through exchange of ideas, feasibility of

options

61



✓ 3.3.1. C – What stakeholder resistance was identified / addressed in this phase of the project?



Stake holders


No resistance No resistance No resistance

Resistance observed wrt timing of trials

from the shop floor personnel, which was

resolved amicably

62

32



✓ 3.3.1. D – How was the appropriateness of the initial or updated team membership and management routines confirmed (or, what changes were made)?



Stake holders

Routine management

Monthly review, no changes made

Weekly meetings to review progress, no

changes made

Weekly meetings, no changes made

Part of the CFT & used this forum for communication of

concerns, ideas, etc.

63


4. Implementation and Results Verification

64

33


▪ 4.1.0 Stakeholder Considerations in Implementation

✓ 4.1.1. A – How were stakeholders involved in planning the solution / improvement implementation?

✓ 4.1.1. B – How were stakeholders involved in implementing the solution / improvement?

✓


S.No. Stake holders Planning the solution Contribution in implementing the solution

1 Project sponsor

Ensured availability of all resources on scheduled meeting dates

Sponsor / Champion: Change agents to make the improvements a part of the process

2 Project Team Project Lead ensured required stakeholder’s presence while planning the solutions.Functional leaders/SMEs contributed with their knowledge and experience on planning solutions

Project Lead: Took the onus of training the entire team on the new procedures Process SME’s built new process flows for the revised procedures

3 Technology Team

Helped with identifying the areas in the process that can be automated Helped in troubleshooting various automation options

Built the automation for the process Technical team helped us fixed bugs that were identified in the pilot phase They also supported the team with initial training on using the new automation

5 Knowledge Management Team

Helped in creating training need analysis based on proposed solutions

Worked with the project lead and SMEs in updating the SOPs, Process Checklists, process FMEA, Process Training Plans and assessments Carried refresher trainings and conducted post training assessments for the process team 65



✓ 4.1.2. A – What was done to anticipate resistance before it occurred?


Stake holders


Project Leader

Functional Leader/SME

Team member

Gate reviews were conducted with project Sponsor / Champion

Meeting with identified stakeholders on various points of concern from time to time

Functional leaders were involved in the decision making process

Internal team discussions followed by consulting with functional leaders

Actions to avoid resistance

66

34



✓ 4.1.2. B – What types of resistance were actually encountered during the course of solution / improvement implementation?

✓ 4.1.2. C – How was the actual resistance identified?


Final Solution Resistance identified

1. Process improvement at existing supplier for leakage2. VCI paper, Desiccant bags, silica gel pouch

implementation for rusting issue

1. Resistance from supplier wrt design change2. Resistance from shop floor for increase in additional process step


1. Resistance from inner cap supplier to change the design

1. 20 Ltr lacquered drums replaced by 20 ltr conipail2. Modification in paint mixing room with appropriate

cartridge filter at Customer’s end

1. No resistance2. Resistance from customer to make changes in his paint kitchen

1. Stamping on inter-company look-a-like materials2. Colour coding on external vendor look-a-like barrels

1. No resistance2. No resistance

1. Calibration check for radar2. Correction of WPL data in HMI

1. Radar agency not agreeing for periodical calibrations2. No resistance

1. Bar coding of materials2. WMS implementation & automation


1. Palletization process improvement2. MH training to WH staff & transporter labours

1. Resistance from warehouse2. No resistance

67



✓ 4.1.3. A – How was the actual resistance addressed?

✓ 4.1.3. B – How did the team know it was successful in addressing the resistance?


Final Solution Resistance identified Resistance addressed



1. Resistance from supplier wrt design change

2. Resistance from shop floor for increase in additional process step

1. Meeting with supplier, explained the concerns,negotiations worked

2. Shop floor team convinced due to negligible impact on cycle time


1. Resistance from inner cap supplier to change the design

1. Alternate vendor development

1. 20 ltr lacquered drums replaced by 20 ltr conipail


1. No resistance

2. Resistance fro customer to make changes in his paint kitchen

1. Nil

2. Shared the benefits of modification in the paint kitchen to reduce the rework activities at customer’s end

68

35



✓ 4.1.3. A – How was the actual resistance addressed?

✓ 4.1.3. B – How did the team know it was successful in addressing the resistance?


Final Solution Resistance identified Resistance addressed

1. Stamping on inter-company look-a-likematerials



1. Nil2. Nil

1. Calibration check for radar


1. Radar agency not agreeing for periodical calibrations

2. No resistance

1. Radar agency was convinced and negotiations done

2. Nil



1. No resistance

2. No resistance

1. Nil

2. Nil



1. Resistance from warehouse due to additional tasks

2. No resistance

1. Team convinced

2. Nil

Once the resistance issues were

addressed, the suppliers, teams

were motivated, and the identified actions

were completed successfully

69



✓ 4.1.4. A – What was the evidence of stakeholder group buy-in?

✓ 4.1.4. B – What evidence showed that buy-in was obtained prior to implementation?


70

36


▪ 4.2.0 Solution / Improvement Implementation

✓ 4.2.1. A – What processes or systems were changed or created to implement the solution / improvement?

✓ 4.2.1. B – What systems were changed or created to measure and manage the performance of the implementation?


Final Solution Process change/created Process management



1. Leak test process changed from air type to water type. Change in tin specification (0.25 to 0.26)

2. New process introduction of inserting VCI papers during filling operation.

1. Supplier audits, Standard operating procedures (SOP), control plan updation

2. SOP creation, BOM updation, PFMEA updation


1. Packing material design change 1. New material code generated in SAP through Management of Change (MOC) process

1. 20 ltr lacquered drums replaced by 20 ltr conipail


1. Packing material design change

2. Process improvement at customer end

1. New material code generated in SAP through Management of Change (MOC) process

2. Verification by technical service representative at customer’s end

71


▪ 4.2.0 Solution / Improvement Implementation

✓ 4.2.1. A – What processes or systems were changed or created to implement the solution / improvement?

✓ 4.2.1. B – What systems were changed or created to measure and manage the performance of the implementation?


Final Solution Process change/created Process management

1. Stamping on inter-company look-a-like materials


1. Introduction of stamping for look-a-like material (process change)

2. Colour coded drums from supplier (visual management)

1. Standard operating procedure2. Inspection plan updation

1. Calibration check for radar


1. New process introduction

2. Process improvement

1. Standard operating procedure




1. New process introduction

2. ERP Process improvement

1. Management of change – technology



1. Process improvement 1. Standard operating procedure

72

37


▪ 4.3.0 Project Results

✓ 4.3.1. A – What were the results?

✓ 4.3.1. B – How did the results compare to the specific project goals / measures from item 2.1.1?


17

1210 10

0

5

10

15

20

Product Service

Complaint analysis-Categorywise

Year-2015 Year-2016

194,195

92643

0.43%

0.20%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0

50000

100000

150000

200000

250000

300000

2015 2016

% C

oP

Q a

gain

st N

et S

ales

Co

PQ

in U

S$

Year

Cost of Poor Quality - CoPQ

Total COPQ COPQ % against Sales

65000

22850

20000

40000

60000

80000

2015 2016

US$

Claims paid

Claims paid

12919590358

0

50000

100000

150000

2015 2016

In-transit damage and other losses

In-transit damage and other losses

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✓ 4.3.2. A – What additional benefits were realized from the project?


• Improved Inventory Record Accuracy• Elimination of misloading incidences• Speedup and minimized the errors in routine

transactions• Minimized manual intervention and reduced

paper work • Real time information on RM, PM and FG• Loss of time and manpower reduced leading to

resource optimization.• Reduction in supplier incoming % rejection• Improvement in customer score cards• Gassing issue resolved resulting in elimination of

near miss incidences

Example – Reduction in cycle time of CED products

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India business team is aggressively focusing on

Industrial & OEM segment for growth wherein the

current system had multiple issues related to FIFO, real

time accounting, misloading, IRA accuracy, customer

complaint, etc. ▪ High cases of misloading of material

leading to QIR’s and customer complaint

▪ The IRA accuracy of the site was also low. ( around 80 % )

▪ Very difficult to manage FIFO for materials

▪ Physical inventory count / cycle count process was tedious and time taking

▪ Loss of time and manpower as traceability of material was very difficult

▪ Repeated manual intervention in material accounting which increases the possibility of human errors

Digitalization - WM & Barcode Implementation Project

▪ SAP WM – Warehouse Management

▪ Automatic system (Bar coding) for materials handling in all production areas (Logistics and Factory)

▪ Use of wireless barcode scanners that collect all information

Solution

▪ Improved IRA

▪ Speedup and minimized the errors in routine transactions

▪ Minimized manual intervention and reduced paper work

▪ Real time information on RM, PM and FG

▪ Implemented FIFO

▪ Loss of time and manpower reduced leading to resource optimization.

Business Value

4.3.0 Project Results 4.3.2. A – What additional benefits were realized from the project?


75



✓ 4.3.2. B – How did the team measure any of the additional benefits that were soft?


Improved customer scorecard

Received ‘zero’ ppm (no rejection) Certificate of appreciation from customer

Streamlined CED blending process

SALES TEAM FEEDBACK

CUSTOMER FEEDBACK

PRODUCTION FEEDBACK

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39



✓ 4.3.2. C – How do the actual additional benefits that were realized compare to the expected additional benefits identified in item 3.2.4?


Elimination of misloading incidences

Improved Inventory Record Accuracy

Cycle time reduction of CED clear

Implemented FIFO

0

98%

<12 hr

100%

0

100%

10.5 hr

100%

TARGET ACTUALADDITIONAL BENEFITS

Supplier incoming rejection 1% 0.40%

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▪ 5.1.0 Sustaining Results Over Time

✓ 5.1.1. A – What was done to make sure the process or system changes made during the implementation (4.2.1.) continued to be followed?

✓ 5.1.1. B – What evidence showed that this became part of the organizations culture / operating strategy?

5. Sustaining and communicating results

Revised SOP made part of site controlled documents Incorporation of VCI paper in FILLBOM of all products

New process introduction of inserting VCI papers during filling operation.

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40



✓ 5.1.1. A – What was done to make sure the process or system changes made during the implementation (4.2.1.) continued to be followed?

✓ 5.1.1. B – What evidence showed that this became part of the organizations culture / operating strategy?


New process introduction –Bar code implementation

Leak test process changed from air type to water type. Change in tin specification

(0.25 to 0.26)

Updated the engineering design records for newly implemented leakage testing system

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✓ 5.1.2. A – What was done to make sure the benefits obtained from the implementation (Item 4.2.1.) will be maintained?


WHAT WAS DONE?

• Periodical site performance review• Supplier audit calendar• Complaint tracking through SFDC/ETQ

• Control plan• DOCK audit

• Weekly review of variation in physical dip vs. radar

• Daily reconciliation of cycle count materials

HOW MAINTAINED?

• Customer complaints analysis• Supplier quality management• Internal quality incidents analysis

• Incoming inspection• New process introduction of inserting VCI papers

during filling operation.

• Weekly monitoring of liquid raw material in tank-farm( check no. of dips vs. radar level)

• Cycle counting of material and IRA calculation

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✓ 5.1.2. A – What was done to make sure the benefits obtained from the implementation (Item 4.2.1.) will be maintained?


Customer Feedback on Resolution of Rusting in Tins/Cans

Customer Feedback on Resolution of Bulging due to gassing issue in product

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✓ 5.1.2. B – What evidence showed that this became part of the organizations culture/operating strategy?


Physical Dip vs. Radar weekly monitoring

IRA Measurement

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▪ 5.2.0 Communication of Results

✓ 5.2.1 A – How did the team communicate the results to the various stakeholder groups?


Stake-holders Communications

Regional team

Business team

Site-Leadership team

Plant team

Project core team

Process area team

Monthly callAnnual review meeting

Monthly COPQ report

Monthly COPQ report(validated by finance team)

Site SQDIC+P Dashboard

Project closing meeting

Batch-cardsControl-plans and work-instruction

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▪ 5.2.0 Communication of Results

✓ 5.2.1 B – How did the team communicate the results to the various stakeholder groups?


Results were communicated to plant team through town-hall meeting

Results were communicated to site leadership team through project closing meeting

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Rewards & recognition


Won “quality” award in 4th edition of manufacturing today

Awarding project team-members inOpen house meeting

Achievement was published in organizational newsletter

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AXALTA COATING SYSTEMS

Thank You

Documents

Reduction in Cost of Poor Quality (COPQ)€¦ · 2 Reduction in COPQ 15 15 15 10 5 10 10 80 3 High grinding efficiency in Black primer 9 9 9 2 3 6 2 40 4 OTIF improvement (Bi-weekly