This document describes a yellow belt project to reduce miscellaneous receipts in the SL55 warehouse. It found that miscellaneous receipts comprised 3/4 of all miscellaneous transactions and over 4/5 did not provide a reason. The root cause was identified as material not being pulled in FIFO order, causing surplus material. Changes were made to the SAP screen and standard work to pull in FIFO order. This led to a 77% reduction in miscellaneous receipts and a 98% reduction in unknown receipts, saving an estimated $8,000 per year. Sustaining controls were put in place and lessons learned included using charts to analyze data and understanding different data types.
Key Performance Indicators webinar Smith & Gesteland
Alex Simmonds Yellow Belt Final Presentation
1. Reduce and Manage Miscellaneous
Receipts In The SL55 Warehouse
Yellow Belt Project
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Alex Simmonds
HN Warehouse Coordinator
03/10/2016
2. Define
Problem Statement
Miscellaneous receipt adjustments in the SL55
Warehouse have a negative impact on stock
accuracy when performed without proper research
and add an average of 6 minutes to cycle completion
per instance. Baseline data shows that
approximately 4200 miscellaneous receipt
adjustments were performed in SL55 during the past
twelve months (July/2014 – July/2015). Left
unchecked, miscellaneous receipt adjustments will
negatively impact OTD as well as costs.
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3. Define
Background
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Normal Process Flow
Deviation Point
This deviation point is the cause of miscellaneous transactions
4. Measure
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Breakdown of All Misc. Transactions
Misc. Receipts comprise nearly 3/4 of all Misc.
Transactions.
The scope is narrowed to these transactions
5. Measure
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Over 4/5 of all Misc. Transactions did not give a
clear reason as to why the transaction took place
Breakdown of Misc. Receipts
Why are there so many unknown
miscellaneous receipts?
6. Analyze
5 Why Analysis
Why are Miscellaneous Receipts happening?
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Surplus material is found
Why is surplus material present?
The same material is being pulled from other locations
Why is material being pulled from other locations?
There is no information to determine which location SAP will
pick first
Why is there no information to show which
location to pick from?
The picking screen in SAP is not formatted to show
First-In-First-Out (FIFO)
7. Root Cause:
FIFO is not being physically followed, causing ‘surplus'
material to be found in locations. These found
materials are then erroneously Miscellaneously
Received.
Hypothesis Statement:
If material to be issued is pulled in FIFO order, or
Quant order (SAP), then the amount of Miscellaneous
Receipts will decrease by at least 75%.
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Analyze
Root Cause and Hypothesis Statement
8. Improve
• SAP screen LS26 has been formatted to show
Quant information to determine FIFO
• Standard Work Instruction has been created for
issuing material
• If a Miscellaneous transaction is required, a
description must be added for why it is happening
9. Improve
Results
Misc. Receipts per Week
Baseline: 80/week (Avg) 07/01/14 - 07/25/15
Target: 19/week (Avg)
Pace: 18/week (Avg)
-average reduction of 62 occurrences per week (77% reduction from baseline)(77% reduction from baseline)
0
50
100
150
200
250
300
Nov. 2-
6
Nov. 9-
13
Nov.
16-20
Nov.
23-25
Nov. 30
- Dec. 4
Dec. 7 -
11
Dec.
14-18
Dec.
28-31
Jan. 4-8Jan. 11-
15
Jan. 18-
22
Jan. 25-
29
Feb. 1-5 Feb. 8-
12
Feb.15-
19
Feb. 22-
29
Grand
Total
2% above the established target of
75%
10. Prior to Improvement After Improvement
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Improve
Results Continued
Base of 80 Misc. Transactions per Week
64 of which were unknown
Improvement to 18 Misc. Transactions per
week
1 of which is unknown
98% Reduction of
Unknown Misc.
Receipts
11. Improve
Impact
• More accurate inventory and associated costing
• Reduction in excess material ordering from
Kulpsville and vendors
• Reduction in cyclecount adjustments
• Fewer discrepancies during inventory audits
• Estimated hard savings of at least $8,000 per year!
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12. Control
Sustaining Improvements
The SL55 Lead will continue to ensure compliance of
the standard work for existing employees and train
any new employees.
The SL55 Lead will continue to monitor the misc.
transactions on a weekly basis for deviations from
the set requirements.
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13. Key Learnings
• Creating and Utilizing Pie Charts to analyze data
• Creating and Utilizing Process Flow Maps
• Understanding and applying Categorical,
Continuous, and Count data.
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14. Special Thanks
James Mikulski & Yvonne Young – Initial training with the
concepts of Lean / Six Sigma
Dustin Carroll & Yvonne Young – Coaching and guidance
throughout the process
Matthew Bryan – Working with me to keep moving forward on the
project despite heavy work flows
John Williams – Helping with setting the scope and attaining the
needed data to bring the project together
The SL55 Warehouse Team – Being open to change and
performing their best with integrating the proposed changes
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