Temp management measure analyze tollgate presentation final

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  1. 1. Enterprise Excellence Reduce Temp Management Equipment Repair and Scrap Expense Measure/Analyze Tollgate Karla Mack Project Manager February 19, 2015
  2. 2. DMAIC Road Map =Tollgate Approval 2 Kaizen
  3. 3. Agenda Project Charter Kaizen Team Measure Analyze Improve Lessons Learned Next Steps Sign-Off Decision 3
  4. 4. Project Charter 4 Problem/Goal Statement Core Team Tollgate Review Schedule Business Impact Belinda Cordina Project Sponsor Catherine Stemper Deployment Leader Karla Mack Green Belt Bob Pahl Black Belt TBD Process Owner Team members, role, % contribution, LSS training Jim Fisher, MFG One, 10 %, CIIP Trained Ashley Lucci-Vaughn, MFG One, 10%, CIIP Trained Dave Rawlings, Marketing, 10%, CIIP Trained Jason Price, Finance, 5%, CIIP Trained Laticia Wilson, Finance, 5%, CIIP Trained Debbie Nicolas, GSC HC Finance, 5%, CIIP Trained Becky Hudgins, GSC HC Finance, 5%, CIIP Trained Erion Lanier, Quality, 10%, CIIP Trained Problem: The total spend of repairing and scraping Temp Management equipment has increased 19% over the past 12 mos. with no clear reason as to why and no increase in number of units serviced. In Scope: North America Scrap & Repair Expense for Loaned Equipment & Purchased Equipment; All cost related to repair and scrap process; Approval process and criteria for scrapping and repairing equipment Out of Scope: All other Ecolab Temp Management equipment processes upstream or downstream from the repair & scrap process as defined in this project; Chillbuster Equipment; Changes to our existing contract with MFG One beyond scrap and repair criteria Goals: Reduce total spend of repair and scrap expense Review/Revise criteria for scrap and repair All invoices paid upon completion of approval process/criteria Tollgate Scheduled Completed Define 12/02/14 12/02/14 Measure 02/13/15 02/19/15 Analyze 02/13/15 02/19/15 Improve 03/23/15 Control 04/20/15 Review high-level schedule milestones Define Gate Complete Measure Analyze Kaizen Complete Potential Savings Estimated Type 1 OI Benefits: 10%-20% ($50-$100K ) reduction in total spend on repairs and scrap from 2014 to 2015 (Oct 2013 Sept 2014 total spend: $500K) Estimated Type 2 OI Benefits: % reduction in FTE time due to increase in consistency and quality of information received (Providing opportunities to work on value-add activities)
  5. 5. HUGE Thanks to the TEAM!!! 5 Kaizen Team Members (Left to Right) Ashley Lucci-Vaughn, Jim Fisher, Laticia Wilson, Debbie Nicholas, Becky Hudgins, Erion Lanier, Jason Price, Karla Mack
  6. 6. DMAIC Road Map =Tollgate Approval 6
  7. 7. Current State Process Map 7
  8. 8. 8 Current State Data 2012 2013 2014 Comments Total Spend $ 270,085.51 $ 460,415.40 $ 422,685.05 Significant increase from 2012-2013 due to increase in repaired units over 6+ years old Customer Request Expense $ 34,478.09 $ 26,703.13 $ 15,189.12 IntraTemp: 15K 2014 & 4.6K 2013 Average Cost: $120 ($375 for IntraTemp) Repair Expense $ 215,239.05 $ 407,595.01 $ 392,081.37 Average Cost: $360 Scrap Expense $ 20,368.37 $ 26,117.27 $ 15,414.56 Average Cost: $40 Note: All figures exclude the IntraTemp business that was transferred to MFG One in late 2013 Analysis Conclusions: % Scrap has decrease year over year (-4%: 2012-2013; -10%: 2013-2014) w/ 75% criteria Average book value at time of scrap is $38.68 Units driving repair cost are Warmers (ORS-2038, ORS-2057, ORS-2066)
  9. 9. Data Supporting Problem Statement Critical 1: Significant Increase in Repair Expense over Past 36 months Detail: Repair expense has increased 57% from 2012 2014. This excludes the IntraTemp business that was transferred to MFG One in late 2013 70% increase in repair cost from 2012 to 2013 due increase repairs of units 6+ yrs old Critical 2: Weak Criteria Around Scrap / Repair Decision Detail: Current Criteria: If estimated repair costs > 75% of cost of new unit, the unit is scrapped Critical 3: Lack of Visibility To Data / No Reporting Metrics Surrounding Repair Expense Detail: No current standardized process metrics 9
  10. 10. DMAIC Road Map =Tollgate Approval 10
  11. 11. Team used fishbone diagram to identify greatest pain points 11 Lack of Consistent & Clear Policies (Scrap & Repair) Lack of Billing Policies & Training on Customer Driven Cost Misuse Invalid Returns Special Request Working Units Shipped Back to MFG One Due to Rep Turnover
  12. 12. What We Found Units of 6 years old = 15K first year; 70K each additional 45% = 185K # of times repaired = 25K 12
  13. 13. DMAIC Road Map =Tollgate Approval 13
  14. 14. Solution Generation & Results 14 Process Scrap Customer Request Repair Assign process owner to own metrics, reporting, master data Scrap if 6+ years old Begin tracking these request through MFG One reporting Standardized questionnaire for CS and Sales to use to troubleshoot units Redesign the monthly reporting from MFG One to ensure process control Scrap if previously serviced twice Scrap if Basin needs replaced Scrap if repairs exceed 45% of the value of a new unit
  15. 15. Future State Process Map 15
  16. 16. Business Impact This is a Type 1 savings project Cost savings for scrap 6+ years Year 1 savings $15k Subsequent year savings $70k The project determines clear criteria for scrap / repair decision making Scrap units > 6 years of age Scrap returned units that have been previously repaired twice Scrap units with basin damage Scrap units whose cost to repair > 45% of new unit cost Defined metrics enable process owners to have the data they need to approve invoices and provides quality control. Metrics provide data to support marketing business decisions around customer management. Customer Service and Sales Reps troubleshoot using a standardize questionnaire Financial Process
  17. 17. Pilot Plan Pilot Test Description Success Criteria Test Team Schedule Redesign the daily reporting from Ecolab Add # of times repaired and mfg date Test 5 units to verify data corresponds to the correct unit Erion, Karla, Becky 2/23-2/27 Reps/CS troubleshooting w/ customer using questionnaire Test question are for flow and make sure it is a appropriate line of questioning Rep focus group (3-5 reps of sales mgt) Dave Rawlings 2/23-3/11 Metrics & Reporting How are metrics measured and reported monthly? What will they look like? How will they be calculated? Validate calculations of agreed upon control metrics Luke, Erion 3/2 - 3/18 Redesign the monthly reporting from MFG1 Finance and service detail: addition of age of unit, # of times repaired, type of service (repair/customer request/scrap) equipment class, unconfirmed/confirm ed; nature of service Test 25 units to verify data corresponds to the correct unit Erion, Karla, Becky 3/11-3/18 17 Pilot status will be communicated to team and stakeholders weekly Owner: Karla Mack
  18. 18. Action Plan Action Who Complete Status For MFG1 provided data, we will need Kathy T. to modify her monthly repair report Ashley/Jim 18-Feb Dave, Erion, Karla to develop questionnaire for marketing Karla 19-Feb Verify R&D about the need for component trending Karla 19-Feb Review financial numbers with Ross Laticia 19-Feb Find out the process and timeline for updating agreement btw Ecolab and MFG1 Follow-up w/ Legal Karla 23-Feb Hold meeting w/ stakeholders to establish process owner Karla 25-Feb Verify Invoice Approver (Process Owner?) Karla 25-Feb Have Liesel write script to get # of times unit is repaired and manufacturing date on daily report to MFG One Dave 27-Feb Hold meeting to establish metrics calculations Karla 27-Feb Create part drop down list for MFG One reporting Becky/Jason 27-Feb Create nature of service drop down list for MFG One reporting Erion/Process Owner 27-Feb 18 LEGEND Green = On Track Yellow = At Risk Red = Behind Schedule White = Not Started Blue = Complete
  19. 19. 19 Marketing & Sales Customer Management Opportunity Units being returned that do not need to be returned Customer misuse of equipment Customer special requests Rep Turnover R&D Opportunity to upgrade frequently failing components Quality Process for approval of special request Identified Future Efforts
  20. 20. Lessons Learned Process performance metrics need to be monitored, tracked and shared with Leadership, Department Personnel, and Stakeholders Every process NEEDS a process owner to maintain evaluate if the process is in control Kaizens are intensive and require full engagement from all team members, so having a complete focused team increases the odds of having success
  21. 21. Sign Off I concur that the Define phase was successfully completed on 02/19/15 I concur the project is ready to proceed with pilot implementation and can officially move to next phase: Improve Catherine Stemper Deployment Leader Ross Michalson Finance Representative Bob Pahl Project Coach Belinda Cordina Sponsor
  22. 22. Next Steps Team will continue to implement action plan Pilot plan with start Monday 2/23 with first status update on 3/02 Karla will schedule a meeting with stakeholders to establish future process owner
  23. 23. Appendix
  24. 24. Cause and Effect Diagram Gaps: Standard metrics were not determined Lack of Policy to bill for equipment misuse Times when units are not returned to MFG One Times when units are shipped back and do not need repairs Incomplete rep training and procedures Unconfirmed complaints Rep turnover possibly leading to units being returned
  25. 25. FMEA Process Step / Input Potential Failure Mode Potential Failure Effects Potential Causes Current Controls Actions Recommended Resp. What is the process step and Input under investigation? In what ways does the Key Input go wrong? What is the impact on the K