1. 1
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What triggered this project…..
DMC ( PLASTICS ) REDUCTION
DMC Reduction ( 10% YOY ) identified as one of the strategic goals in the Blue Book of 1997
Trend of Raw Material prices …...
0
50
100
150
200
250
Rs/Kg
NORYL 161 165 175 215
ABS FR 110 115 118 125
Jan'94 Jan'95 Jan'96 Mar'96
…… Impact* on DMC ( Plastics )
800
1000
1200
1400
1600
1800
LRGP/Pc
1025 BASE
FRAME
1210 1232 1284 1452
Y1 BASE
FRAME
1298 1361 1411 1615
Jan'94 Jan'95 Jan'96 Mar'96
BUSINESS OBJECTIVES AFFECTED
RETURN ON ASSETS
YOY PRODUCTIVITY
DMC( PLASTICS ) INCREASED BY
5.49%* BETWEEN 1994-96
* PRICE INCREASE GIVEN ONLY FOR BASE FRAMES
Monopoly ( GE Plastics - sole producers of Noryl globally)
Continuous increase in Petroleum prices internationally
Repeated price increase demands from the raw material manufacturers due to
Barrier ..
2. 2
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A Cross functional QIP team formed in Sept’97 to reduce DMC(Plastics)
Start Date : Sept’97
Completion Date : Mar’ 00
OUTPUT : DMC ( PLASTICS ) REDUCED BY 10%
DMC ( PLASTICS ) REDUCED BY 10%
Project Schedule ….
Team :
A K JAIN ( MSQ ) - Leader
VENUGOPAL ( SQA )
L M JOSHI ( ENGG )
GIRISH KUMAR* ( METHODS )
SHANTANU DASS* ( CSS )
* SINCE LEFT XMC
Customer :
PRIMARY : H K SHAH ( DIRECTOR - MSQ )
SECONDARY : D P ROY ( EXEC DIRECTOR - MFG )
Process Owner :
A K JAIN ( MSQ )
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Brainstorming for Cost Reduction solutions…….
Filters used ….
Group Control / Commonisation
Customer Requirements Supplier Specifications
Reduce DMC ( Plastics ) by 10%
( As Is State - ‘97 closing :
DMC 1025 : Rs 7012/
DMC 5212 : Rs 3162/ )
Quality Performance to be as good as existing
Install failures = 0
DMC reduction
PHASE I
Rs 350/ ( 1025 ) - MAR’ 98
Rs 310/ ( 5212 ) - SEPT’98
PHASE II
Rs 340/ ( 1025 ) - OCT’ 99
LFO PPM < 135 ( PLASTICS )
BA > 87%( PLASTICS )
DPHWM = 0
DPHI = 0
10% DMC (PLASTICS)
REDUCTION
MANUFACTURING COST PACKING COST
RAW MATERIAL COSTSTATUTORY COST
RECYCLE
EQUIVALENT
CHEAPER RM
NEGOTIATION
PROCESS OPTIMISATION
SALES TAX
ALTERNATE MFG PROCESS
INSURANCE
NEGOTIATION
M/C WITH LOW TARRIFF
REGROUND MATERIAL
4. 4
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Potential Solution Validation Result Inference
• Negotiations with the RM Persuaded RM manufacturers Shown inability Ruled out
Manufacturers
• Re-negotiations with the Suppliers Persuaded Suppliers Shown willingness SS/DD not in
subjected to volumes group Control
• Process optimisation Process study conducted Found no scope
for a few ‘A’ class parts for improvement Ruled out
• Alternate manufacturing process Trial conducted in Plain Injection in Weight increased by 80% Not economical
( limited to UBF) place of Counter gas
• Re-ground material Trial conducted with 20% Ground Aesthetic defects found Not acceptable
• Statutory Cost Govt. controlled Ruled out
• Recycled packaging (Customised) Cost benefit analysis done High tooling Investment Not economical
• Equivalent cheaper Raw Material Compared Specifications of NORYL
with other FR materials vis-à-vis
cost benefit :
Validation of Cost Reduction Solutions …..
• HIPS FR Low Impact Strength found Not suitable
ABS PC ALLOY * Higher specific Gravity
otherwise comparable
* Costlier Ruled out
ABS FR * Properties comparable
* Cheaper by 50%
Potential
Solution
5. 5
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Selection of Parts ….
3067
455
212
435
0
500
1000
1500
2000
2500
3000
3500
NORYL
PARTS
ABS FR
PARTS
ABS
PARTS
HIPS
PARTS
LRGP
NORYL PARTS CONTRIBUTES TO 30%
OF DMC ( PLASTICS )
TEAM DECIDED TO VALUE ENGINEER BOTH OF THE BASE FRAMES IN THE FIRST PHASE OF THE PROJECT
CHEAPEST MATERIALS --
ALREADY IN USE
S NO PART DESCRIPTION MODEL RAW MATERIAL IN USE LRGP
1 BASE FRAME 1025 NORYL 1452
2 FRONT COVER 1025 ABS FR 109
3 TOP COVER 1025 ABS FR 219
4 RH COVER 1025 ABS FR 62
5 LH COVER 1025 ABS FR 65
6 TRAYS 1025 ABS 435
7 BASE FRAME 5212 NORYL 1615
8 PLATEN COVER 1025 HIPS 152
9 EXIT TRAY 1025 HIPS 60
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Journey Map ….
MOULD TRIAL IN ABS FR
A K JAIN
SQA VERIFICATION
CRITICAL DIMNS/TORQUE TEST
VENUGOPAL
FUNCTIONAL TRY OUT
GIRISH KUMAR
OK ?
LATCH / UNLATCH TEST
COPY RUN TEST ( 60K )
ENVIRONMENTAL TEST
( 40 / 10 DEG CENT )
L M JOSHI
INSERT PILLAR CRACKING TEST
GIRISH KUMAR
FIELD INSTALL AND COPY RUN
SHANTANUDAS
OK?
OK ?
CAUSE ANALYSIS &
CORRECTIVE ACTION
TEAM
CUT IN WITH A NEW PART NO
NO
NO
NO
YES
YES
YES
PROCESS PARAMETERS
RECYCLE
COST BENEFIT
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Critical Measurements ….
Before
• Process Parameters
• Investment requirement &
Cost benefit
During
• Shot weight
• Foaming thickness
• Aesthetics
• Cost benefit
After
• Compliance to
Dimensional specifications
• Cost benefit
Process Capability Assessment ….
S.
NO.
PARAMETER SPECIFICATION RESULT
1 Dimentional
Verification
As per Specs Accepted
2 Torque
Compliance
1.2 N/m 2 N/m
3 Functional Try
out
Fit & function Acceptable
4 Latch- Unlatch
Test
No breakage after 5K
actuations
No breakage
observed
5 Copy run Test 60K copies Qualified
6 Environmental
Testing
At 40 Deg
At 10 Deg
10K copies
10K copies
Qualified
Qualified
7 Field Trial 40K copies No problems
observed
Sample Size : 6 Nos
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Recycling ….
• ABS Plain found to be cheaper than ABS FR
• All properties of ABS plain matched with ABS FR except for the Fire Retardency
• Fire Retardency being one of the critical reqt’s and the deviation beyond the team control , the team
raised the issue to
Engineering
• Engineering approved change to ABS Plain for the domestic configurations in Aug’99. The approval was
based on the
benchmarking with the Korean domestic configurations
• Team started implementation immediately and followed the process adopted for NORYL conversion
• Store in of Base Frame - 1025 and all the Covers - 1025 took place in Dec’99Quality Performance monitoring ( ABS Plain ) ….
70
75
80
85
90
95
100
%
ABS FR'99 95
PLASTICS'99 93
ABS PLAIN 87 89 92 93
PLASTICS 94 95 95 96
Q1'00 Q2'00 Q3'00 Q4'00
BATCH ACCEPTANCE LFO PPM
0
500
1000
1500
2000
2500
3000
3500
ABS FR'99 2743
PLASTICS'99 60
ABS PLAIN 2101 1953 1877 1647
PLASTICS 50 47 98 32
Q1'00 Q2'00 Q3'00 Q4'00
10. 10
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Results Achieved ….
S NO PART
DESCRIPTION
MODEL OLD
LRGP
NEW
LRGP
DMC SAVINGS
(Rs)
1 BASE FRAME 1025 1452 869 583
2 FRONT COVER 1025 109 87 22
3 TOP COVER 1025 219 164 55
4 RH COVER 1025 62 45 17
5 LH COVER 1025 65 47 18
6 BASE FRAME 5212 1615 1071 544
TOTAL 1239
DMC ( PLASTICS ) ADVANTAGE OF 11.56%
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DESCRIPTION LRGP QTY STOCKED SAVINGS ( Rs ) ACC
SAVINGS ( Rs ) SAVINGS ( Rs )
PH- 1 PH- 2 1998 1999 2000 1998 1999 2000
A B C D E A*C A*D (A+B)*E
BASE FRAME 1025 385 180 10601 11242 9569 40,81,385 43,28,170 45,76,518 129,86,073
BASE FRAME 5212 544 - 252 875 - 1,37,088 4,76,000 - 6,13,088
LH COVER 1025 - 18 - - 9295 - - 1,67,096 1,67,096
RH COVER 1025 - 17 - - 10590 - - 1,79,406 1,79,406
TOP COVER 1025 - 55 - - 7347 - - 4,21,555 4,21,555
FRONT COVER 1025 - 22 - - 6726 - - 1,47,919 1,47,919
TOTAL 4218473 4804170 5492494 145,15,137
The Theory cascaded to Bueno family in the year 2000 & resulted into a DMC savings of Rs 367/=
Cost of Quality ….Savings
12. 12
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Barriers faced …. Resolved by …...
• Apprehensions of Sr Mgmt & the Supplier ( Damage to
Moulds )
• Retard Bkt fitment problem (on shifting UBF from NORYL
to ABS FR
Standardisation….
• Material parameter comparison
• Mould modification
Documented Moulding Process Parameters for Value Engineered Parts at Suppliers place
Value Engineered Parts documented through CR’s for a separate Part No
Next Steps ….
Key Learning's ….
Value Engineering doesn’t have any boundaries
Continuos Supplier Involvement - key to success
What Whom When
Continue to extend Value Engineering to other models Team Ongoing
Monitor Quality performance Team Ongoing
Customers delight ….
Congratulations . Excellent achievement !!! …... P K MEHTA
Very positive results . Great job…… D P ROY
Great going ….. Keep it up !!!…….H K SHAH
