SECTION 5 SUGGESTED SOLUTIONS TO THE PROBLEMcatarina.udlap.mx/.../documentos/bce/bechet_es/capitulo5.pdf4. Transfer to ISO/API format all GST official documents and practices 5. Create

SECTION 5 SUGGESTED SOLUTIONS TO THE PROBLEM

Fundación Universidad De Las Américas Puebla Departamento de Negocios Internacionales – Emilie Bechet 144866

April 30th, 2013

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PROYECTO DE TITULACION 2 INDUSTRIAS AUGE – SECTION 5 – SUGGESTED SOLUTIONS TO THE PROBLEM

PROJECT IMPLEMENTATION

EXPECTED RESULTS

Here below the list of all solutions that I will try to implement to resolve the problem:

1. Develop GST Turtle Diagram

2. Review and improve GST Contract Compliance Process

3. Create a Standard Operating Procedures’ (SOP) Matrix

4. Transfer to ISO/API format all GST official documents and practices

5. Create Current State Value Stream Map for GST Department

6. Propose solutions for improving GST maintenance strategy

It will be explained later in the document.

DIFFICULTIES ENCOUNTERED

In this project, I encountered difficulties which became obstacles in achieving my missions.

The main difficulty was to understand and assimilate the technical terms and complex

vocabulary of Fastener Industry. In fact, as a French student I had to use both English and

Spanish in order to communicate and accomplish my day-to-day work. Fastener Industry is

an industry that uses a very specific vocabulary; it is very important to fully grasp the

meaning of each term in order to sell the company’s products.

The second difficulty was to communicate in English with the team; I was unused to

speaking and writing English. I was slower in executing my work so it was difficult to

respect the time schedule of my OKR. Besides, I was an obstacle to participate in meetings

as I would like to.


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Generally, when I had a task to do, they gave me some very general instructions but no

precise guidelines. There were no steps in my tasks: I had to fully complete the task before

even beginning to review it with GST Leader. So, when the task was very complicated or

complex, I lost time looking for information or indications to perform it.

Finally, I found it hard working together as a tightly-welded team. As I said in the first

section, GST is located in three different places: Houston, México City and Toluca, so

communication flow and work relationship were reduced. To improve a maintenance

strategy for Sales Team processes, I worked with GST Client Relationship Analyst. But

every member was following its own objectives and goals; their work really needed to be

done on time and they had little time for me.

SOLUTIONS TO FACE DIFFICULTIES

To face all these difficulties, I used communication tools like video conference via skype,

chat on line, emails and phone calls etc. as much as possible. So, little by little I felt more

comfortable speaking with the team.

The fact that I had to work almost alone every day helped me become more autonomous,

do the best I could, and make an effort to be more self-disciplined in order accomplish tasks

on time.

Regarding difficulties of language and specific vocabulary of the Industry, I progressively

familiarized myself with the different terms which helped me to work faster and to be more

independent.

In order to make my work more effective in the plant, I directly worked with a newly

arrived Client Relationship Analyst: she tested all my processes to make sure they were

clear and efficient. Besides, at the end of my internship, I organized a 3 hour meeting with

all GST Client Relationship Analysts in order to review standard processes one more time.


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WORK PLAN & SOLUTIONS IMPLEMENTATION

As we said in the first part, the goal of process standardization is to create

foundations for best practices that ensure predictability and repeatability of AUGE’s

activities in Global Sales Team. In other words, my mission is to audit, develop and

improve GST standard processes to ensure conformance with AUGE’s Quality

Management System, and ISO & API requirements. In fact all documents created have to

be conformed to ISO and API requirements.

1. First I developed GST Turtle Diagram.

A Turtle Diagram is a diagram that illustrates the elements of a process, designed to help an

auditor that address the relevant question when conducting a process audit.

In fact, it helps to evaluate if the process is effective in meeting the customer’s

requirements, and to identify the process owner, responsibilities, resources, etc. It is part of

ISO standards.

Here below you can see GST Turtle Diagram:


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Illustration 5.1 GST Turtle Diagram

Source: AUGE’s document

With the help of the GSTL and my observations, I could indicate material resources, staff

resources, available know-how and performance indicators for the processes under

examination.


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2. The second step was to review and improve GST Contract Compliance

This process is the key process for the department. It defines guidelines of the terms and

conditions on the purchase orders received from Global clients and it confirms AUGE’s

acceptance and compliance to those terms and conditions.

I reviewed with Client Relationship Analysts each step and information developed in the

document in order to ensure process is complete, effective and clear. The goal is that if a

new employee joins the team, he can rapidly understand the entire content.

To comply with ISO and API requirements, we have to use a certain format, respecting

English and Spanish translation:

Illustration 5.2 Contract Compliance Screen Shot


Each process has to follow a specific structure:

• Objective: process goal

• Scope: reach covered by this process

• Reference documents: documents that help doing this process

• Definitions: explanation of specific terms

• Responsibilities: parts that are concerned by this process

• Activity Development: explanation of each step of the process


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• Flow Diagram: graphical representation of the flow of data through process

• Changes Control: revision level, revision date and description of the change

• Annex

• Firms: person that create, review and approve process

Illustration 5.3 Contract Compliance Screen Shot


Here below you can see the flow diagram of Contract Compliance Process. It permits to

understand and assimilate the process at a glance, following each step carefully.

Each step is translated in English and Spanish.


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Illustration 5.4 Contract Compliance Flow Diagram

Revisar nombre del cliente/Review client

name

Revisar que la orden de compra esté dirigida a Industrias AUGE /

Confirm Purchase Order is submitted to AUGE Industrial

Revisar dirección de entrega/Review delivery

address

Revisar dirección de facturación /Review

billing address

Revisar términos de pago e Incoterms /

Review payment terms and Incoterms

Ingresar en SAP numero de parte del cliente/Enter Clients Part Number in SAP

Ingresar en SAP cantidad del item/

Enter Item quantity in SAP

Revisar descripción del material en SAP con la orden

de compra y la nota de materiales /Review material

description in SAP against the Purchase Order and the Bill of

Material

Existe una discrepancia entre la orden de compra y SAP ?/Is there any

discrepancy between PO and SAP ?

Verificar nivel de revisión , subpartes,

especificaciones, planes de calidad y dibujo con LMD/Verify revision level , sub part, specifications, quality plans and drawing

match with Master Document List

Existe una discrepancia entre la orden de compra y SAP ?/Is there any discrepancy between PO and SAP?

Orden de Compra/Purchase Order



Orden de Compra /Purchase Order

Orden de Compra /Purchase Order


Nota de Material/Bill of material

Listado Maestro de Documentos/Master

Document List


discrepancy between PO and SAP?

YES

Buscarlo en el servidor: X:\Auge Sharing Folder\Estructure Catalogue \NF Corte /Go to the server : X:\Auge Sharing Folder\Estructure Catalogue\NF Corte

NF Corte

Revisar en SAP los precios unitarios con lista de precios

y/o con cotización/Review Unit Price in SAP against

price list and/or quote


discrepancy between PO and SAP?


Ingresar número de item en caja PosPed en SAP/Enter item number in PosPed box in SAP

Ingresar las fechas de entrega en caja EstModifClte en SAP /Enter PO Delivery Dates in EstModifClte box in SAP



Guardar la Orden de

Compra en SAP /Save order in SAP

Notificar a Ingeniería /Notify to Auge Engineering

YES


YES

Notificar a Ingeniería /Notify to Auge

Engineering

La instrucción de corte está escrito en SAP?/Is the cutting

Instructions referenced in SAP ?

Revisar si está bien

inscrito instrucción de corte/Review if the cutting instruction is

correctly entered

Revisar discrepencia con GAM y/o Ingenería /

Review discrepancy with Auge GAM and/or Auge

Engineering

Los precios totales están correcto?/Are the total amounts

correct?


YES

Confirmar la Orden de Compra al cliente /Confirm Purchase Order to the client

Inicio/Start

Aclaración de Ingenería/

Clarification from Engineering

NO



NO

NO



YES

YES

NO

NO



Fin/End

NO

Source: Personal Data

Besides, I organized training and evaluations to ensure that each Client Relationship

Analyst is aware of Contract Compliance in details.

After reviewing the process, we submit it for approval by AUGE’s Quality Management

System in order to verify that we comply with ISO/API requirements.

At that point, the document can be revised by an extern auditor.


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3. I created a Standard Operating Procedures’ (SOPs) Matrix

Illustration 5.5 SOPs’ Matrix Screen Shot

Source: Personal data

This matrix was very useful to know SOPs’ status. The table above provides creation date,

last revision, revision number, and the person that created, reviewed and approved

documents.

We can see that none of the procedures are in format and/or comply with ISO and API

requirements. Besides, procedures don’t transmit all information required.

Thanks to this matrix, the fact that GST is not 100% compliant is clearly demonstrated.

4. I transfered to ISO/API format all GST official documents and practices

Before transferring documents to format, I scheduled a meeting with the Quality System

Management Coordinator to determine which practice is considered as a “Local Work

Instruction” (LWI) or as a “Process” according to ISO/API standards. Indeed, each type of

procedure should respect a format, and should have its own reference number and


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instructions.

Finally, we decided to use the following formats. Each practice has its specific objective:

a) New Client Entry & Update as a LWI (INS-CS-01.2): create a new global client

entry in the SAP system

b) New Purchase Order Entry as a LWI (INS-CS-01.3): create a new purchase

order entry in SAP system

c) Client Number Table as a Table (TB-CS-01.3.1): have at its disposal all client

number useful in SAP system

d) Code Creation Request as a LWI (INS-CS-01.4): send a code creation request for

the Engineering team

e) Purchase Order Confirmation as a LWI (INS-CS-01.5): confirm the purchase

order

f) Purchase Order Follow-up as a LWI (INS-CS-01.6): follow-up of purchase order

g) Picking Number as a LWI (INS-CS-01.7): retrieve the picking number

h) Shipping Work Plan as a Process (P-CS-02): inform the weekly work load

organization for orders that will be shipped to a client facility

To transfer practices to ISO/API formats, we basically used the same method as the one for

Contract Compliance Process:

• Transfer processes or LWI to formats, taking the Training Book as the reference.

The Training Book is not considered as an official document but it is used by all the team

on day-to-day operations. It is one component of a two-part package of materials for

training on sales and service for GST. The first part presents the GST model and the basis

to develop a mindset for success. The second part provides practical process guidance

throughout the entire purchase order life cycle.

• Follow ISO/API requirements and translate to English and Spanish.


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• Revise with Client Relationship Analysts of GST that process is efficient and

clearly explained. I used screen shot of SAP system or Client Purchase Order, in

order to make instructions more perceptible.

Illustration 5.6 Screen Shot of New PO Entry LWI


• Submit practices for approval by GSTL and GAM, and then by Quality System

Management.

Each week I went to the plant in Toluca in order to revise LWIs with Client Relationship

Analysts one by one. It permitted me to have a good retro-alimentation of my work and to

provide operational processes for the team.


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5. I created Current State Value Stream Map for GST Department

Without adequate information about the value stream for a specific business operation,

implementing improvements and increasing efficiency would be much more difficult. A

Value Stream Map (VSM) is the key tool of Lean and Lean Six Sigma methodologies. It is

the series of steps that occur to provide a product or service in order to offer the customer

desires. A value stream map takes into account not only the activity of the product, but the

management and information systems that support the basic process.

Indeed, value stream defines all the activities required to fulfill a customer request from

order to delivery.

It helps to:

Visualize processes and task performance

Show links between information and material flow

Promote systems thinking, helping people to avoid sub-optimizing

Identify sources of waste

Depict and prioritize improvement activities

Focus attention on key activities that will improve the Lead Time and reduce the

Total Cost of Product

Illustration 5.7 Value Stream Analysis Planning


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Source: http://courses.washington.edu/ie337/Value_Stream_Mapping.pdf

In fact, VSM permits to improve activities and provide freed capacities. For instance, it can

create new revenue streams, conduct ongoing continuous improvement activities, allow

additional workforce development and collaborations, talks with your customers, and

permit to do a better job with fewer errors and higher safety etc.

Based in my experience in the department, I followed different steps to create the current

state map:

Identify all blocks in the process for value stream

Include the function and the number of workers who perform the task

Identify all systems used in the process and information flow

Number the process blocks from left to right

Connect the process blocks with the systems

Add key metrics for all process blocks (Lead Time and Process Time)

Add obstacles to flow (batches, shared/inaccessible resources, system

availability/speed)

Create timeline & calculate summary metrics

Identify all value-adding (VA) and necessary non-value-adding (NVA) steps

Here below you can see the Current State Value Stream Map:

60


CUSTOMER

CUSTOMER

1. PO CREATION

CLIENT RELATIONSHIP ANALYST

2. PO RECEPTION


3. PO ENTRY


4. PO CONFIRMATION


5. PO FOLLOW-UP


6. PO DELIVERY

Price Agreement

Request for Quotation

Customer CRM

E-Mail Customer PO

SAP

OSR

Export Report

SAP

Shipping Work Plan

Packing List

O: Lack of product bill of material, lack of customer specifications, product out of AUGE’s scope, Quick Quote Rule

PT: 2 Days

LT: 2 – 7 Days

PT: 5 Minutes

LT: 15 Minutes

PT: 25 Minutes

LT: 1-3 Days

PT: 5 Minutes

LT: 10 Minutes

PT: 1-4 Weeks

LT: 3-8 Weeks

PT: 1 Day

LT: 2 Days

O: Customer CRM failures Outlook Failures Internet Issues

O: AUGE SAP Issues/Failures Internet Issues

O: Late response on delivery dates confirmation for special product

O: SAP Modules ZMPROD and CO03 not up to date

O: Delays in manufacturing, exportation schedule, transport, Issues with shipping docs. Change in shipping instructions

2 Days 5 Minutes 25 Minutes 5 Minutes 1-4 Weeks 1 Day

7 Days 15 Minutes 1-3 Days No Delay 3-8 Weeks 2 Days

PT: 4.3 Weeks

LT: 9 Weeks

Packing lists, Invoices, NTRs, Shipper Letter of Instructions, Certificates of

Origin

6.1 SHIPPING NOTE

Purchase Order Life Cycle – Value Stream Current State 04.09.2013 AUGE Global Sales Team

PO: Purchase Order O: Obstacles PT: Process Time LT: Lead Time CRM: Client Relationship Management

ACRONYMS


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We can see on the chart above that the VSM is represented by 6 processes: PO Creation,

PO Reception, PO Entry, PO Confirmation, PO Follow-Up, and PO Delivery. Shipping

Note is a sub-process that is part of PO Delivery.

Each process has its own obstacles (O) and information flow. For instance, the Client

Relationship Analyst confronts diverse obstacles during the PO Delivery Process. Besides,

the Client Relationship Analyst needs information flows to achieve this process: the

Packing List and the Shipping Work Plan. The PT is one day. And its LT is equal to two

days.

The Process Time (PT) is the time it takes to actually perform the work, if one is able to

work on it uninterrupted. It includes task-specific doing, talking, and thinking. And the

Lead Time (LT) is the elapsed time from the time work is made available until it’s

completed and passed on the next person or department in the chain. It includes Process

Time, not merely waiting time.

To conclude, thanks to the VSM we realized that the process time for a PO Life cycle is 3

or 4 weeks but in practice it takes about 9 weeks.

6. I proposed solutions for improving GST maintenance strategy

The objective is to improve GST current state map, targeting all the waste and

removing all obstacles to flow. It will permit to improve GST maintenance strategy in the

future.

First of all, employee has to adopt the right behavior. So manager and leader should

stimulate and encourage contributors to do the least pleasant work. That is to say, it needs

an adjustment of culture and comportment.


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In order to focus on customer satisfaction and waste elimination, we should take into

consideration the following 4 tools:

1. Leadership

Leadership is a set of behavior that permits to angle efforts on a different manner in

order to achieve established objectives.

In fact, if we want that employees work in accordance with strategies of the

organization, it has to be explained through tactic and operational objectives. To do

so, leader should motivate and clearly explain what contribution employees bring to

achievement of those objectives, correcting him if necessary.

2. Innovation

Innovation is the capacity to discover new models, way of work, perspectives, and

original combinations, fetching original ideas.

It could be very useful to achieve the status of a thoughtful organization that uses

continuous improvement each and every day. To secure it, organization needs

guided creativity in order to propose innovative products, services and processes.

3. Communication

Communication means oral or written propagation of correct information, shared

opinions, establishment of dialogue, and creation of a win-win situation.

All of those values play a capital part in achieving new decision making, and

continuous improvement.

4. Teamwork

Teamwork is the capacity to collaborate with others, being connected to the team

through team spirit. Team has to act together in order to achieve objectives.

Without a strong team spirit where everyone knows its role and correctly acts, a

process cannot obtain optimal results.


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To influent on those 4 tools, we should work with 5 essential elements:

Individual and team capacities

It refers to know-how, ability, behavior of individual and team against its tools.

Team will have to possess necessary abilities to be involved in common objectives,

acting with self-critical reflection and commitment.

Context and background

It refers to identity, general sphere, characteristics, and rules of the organization.

Feedback, gratuity, formal consultation, common vision, followed and stimulated

innovation play a vital role in this part. Teamwork is crucial so a gratuity system

based on individual performance is to avoid.

Adequate framework

Lean office management permits to give a central part to clients while attaching

importance to productivity.

Focus on important things

The visualizing of wastes and the achievement of customer requirements clearly and

continuously explain to employee what is important or not, on a day-to-day work.

Discipline and sense of responsibility

Employees should work with creativity and innovation, in order to propose

improvement. Besides, manager should indicate to employee if he goes off the

objectives.

In this particular case, we have seen that the main waste is due to a lack of information or to

system failure.


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In the first step on the map, PO Creation, we mentioned that the obstacles were a

lack of product bill of material, a lack of customer specifications, a product out of AUGE’s

scope, or a quick quote rule. So the main issue is that there is a lack of communication flow

between Client Relationship Analyst and Customer.

In fact, this lack of information has a real impact on the entire order process. For each new

order, Engineering Team has to verify that they are capable of manufacturing the material

requested; they need to review aspects and drawing if and when there is something that is

not in accordance to SAP system. So, without this information, Engineering Team loses

time, and Production Team cannot start manufacturing process: the process is interrupted

and it will have an impact on delivery dates, lead time and obviously on client’s

satisfaction.

A first solution could be to reinforce the importance of having material specifications,

drawing, and technical specific requirements from the customers. GST could organize a

training conference to explain the point to the customer and to raise awareness about this

issue.

Another solution could be to create a new format in order to collect feedback about client’s

satisfaction regarding GST service. Then, the team could show results to the corresponding

department to better improving the service. This format can allow Client Relationship

Analyst to save 7 days in total process lead time.

In the second step, PO Reception, the obstacles were Customer CRM failures,

Outlook failures, or Internet issues. In such a case, Client Relationship Analyst is a victim

of system failures. Only Information Technology Analysts can help them to resolve this

problem.

The issue is the same for the third step.


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In the fourth step, the obstacles to flow were a late response on delivery dates

confirmation for special product. This issue is an internal issue because Production Team

doesn’t confirm delivery dates.

For instance, it can be due to a lack of raw materials into the plant, or to a manufacturing

failure during the process.

Regarding standard materials, Production Team generally gives a suggested delivery date

because they are aware of manufacturing time but, it can happen that they don’t respect this

date so client is not satisfied.

The solution, in the case of standard material manufacturing, is that Client Relationship

Analyst should directly send PO confirmation after processing the order in SAP system. In

this way, the process is continuous and efficient. For no standard material, GST should

impose delivery time to Production Manager.

In the fifth step, PO Follow-up, the main obstacle is that SAP Modules ZMPROD

and CO03 are not up-to-date. Those two modules provide information about work order

status. Client Relationship Analyst can see if the order is ready to ship or if the order has

been manufactured. In this case, the issue is that Planning & Production Team are late in

updating material information through SAP system, so SAP system is not always reliable. It

can be due to a lack of productivity or manufacturing process in the plant. This issue is a

real problem; it affects product delivery dates, and as a consequence client requirements

too.

To resolve this issue, GST could ask planning archives to Production Team in order to be

aware of order status. Therefore, GST will be able to give priority to parts that are about to

expire and to better fulfill their work towards clients.


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In the last step, PO Delivery, the issue is that there are delays in manufacturing,

exportation schedule, transport, or issues with shipping documentations. All this obstacles

are connected with Planning & Production and Shipping Departments.

After analyzing all steps, we understand that the only issue in relation with GST

Client Relationship Analyst is due to a lack of information or/and communication flow

between them and customers.

Regarding Planning & Production and Shipping Department, the main issue is about

employees’ organization and work plan that manager should seriously take in account.

Planning & Production Team doesn’t advise in advance how many products will be

shipped, so the Shipping Department don’t plan in advance their orders to ship. Besides,

they don’t sufficiently report to Client Relationship Analyst.

Therefore, managers should take time to better organize their team in order to develop lean

management on a long term basis.

After eliminating all wastes and obstacles in the current state map, we can:

1) Validate the future state map doing a simulation.

The simulation considers existing variability and uncertainty in the process. So, the

impact of changes in future state in comparison with current state is quantitatively

evaluated regarding process time, delays, necessary resources, service levels, response

time, and other wastes. Besides, the simulation permits to show a visual management in

order to perceive problem issues.


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2) Implement the future state map. The management should ensure that:

a) Any changes through the organization receive the attention they need,

b) Everyone takes responsibility

c) Establish a structure to provide this implementation

d) Employees should work with those 4 tools (leadership, innovation, communication,

teamwork).

To finish I would like to specify that all this solutions can be implemented only if team

manager really decides to improve the system and to form work crew.


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ANALYSIS OF THE RESULTS

During my time in AUGE, I accomplished different tasks that helped GST to improve its

service, by:

1. Contributing to the development, improvement and success of GST Process

Process standardization of best practices allowed GST to build an effective standard

library. I reviewed each process step with Client Relationship Analysts to make it

more clear, effective and up-to-date. For instance, when they have a doubt about a

specific process or methods, they can refer to this standard library. All information

is concentrated in one document. Indeed, it can be very useful if GST hires a new

person; it will save time in training the person, because she or he will be provided

with all best practices registered as standard processes.

Besides, all processes were transferred to ISO and API formats. So now, GST

documents can be revised by an external auditor in order to certify team practices

according to those norms.

Standard processes are considered as a foundation for best practices those ensure

predictability and repeatability of AUGE’s activities. It permits to control and to

avoid mistakes; stabilizing day-to-day operations in business support.

2. Designing a matrix to better identify and use Sales Team Processes

The Value Stream Map of GST was a key tool to identify wastes and understand

why processes were inefficient or slow. Indeed, we have eliminated wastes to

increase information and communication flow between process blocks. For

instance, it allowed to visualizing management and processes. This centralization of

sensitive information also facilitates decision making and evaluation of good

methods follow-up, in order to analyze and improve practices.


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3. Designing a maintenance strategy for Sales Team Processes

I proposed to implement several solutions to better organize and maintain Sales

Team processes, as leadership, communication, innovation and teamwork. In fact,

each manager should constantly keep in mind those lean office tools in order to

correctly train their work crew and motivate them to do this same work.

As I said in the previous part, an adequate context and framework are indispensable

to obtain those expected results. Lean office management should become a reflex on

day-to-day operations; it is only at this time that continuous improvement can be

implemented.

The appointment of working groups can be the starting point. For instance, the

working groups can present solutions to the project manager and bring innovated

ideas to improve existing work methods. The project manager analyzes these

recommendations before submitting it for approval by the Director. Then, the

Director makes the final decision by establishing priorities and ensuring all the

necessary elements for future good behavior (good understanding of processes and

desired changes is essential).

The meeting of working groups will directly have a consequence on group

collaboration thanks to team spirit and work. The team will have the same

objectives and will evaluate measurable results. Finally, discipline and individual

responsibility will be implemented.

4. Increase quality, efficiency, productivity of the organization

All this solutions will permit to increase quality, efficiency and productivity of the

service. On a long-term basis, if managers successfully train their team, it will bring

organization and leadership in every mind.

Documents

SECTION 5 SUGGESTED SOLUTIONS TO THE PROBLEMcatarina.udlap.mx/.../documentos/bce/bechet_es/capitulo5.pdf4. Transfer to ISO/API format all GST official documents and practices 5. Create