6. AnalyzeAnalyzeAnalyzeAnalyze
MeasureMeasureMeasureMeasure
DefineDefineDefineDefine
ControlControlControlControl
ImproveImproveImproveImprove
D M A I C
• Determine business case
• Develop initial problem statement
• Develop descriptive charts (fishbone, pareto)
• Develop data collection plan
• Collect data
• Develop charts/ findings/ redefine problem statement
• Benchmark for new learnings/ metrics
• Determine root causes
• Develop charts/ findings
• Develop recommendations to improve
• Pilot recommendations
• Evaluate and refine recommendations
• Recommend methods/ metrics to monitor
• Recommend short and long term actions
Six Sigma Project Phases & Tools
Independence Corrugated serves hundreds of customers in several industries. Between 40 and 50 truckloads of corrugated go out each day to cities like Minneapolis, St. Paul, Milwaukee, Chippewa Falls, Cedar Rapids, Chicago, and more. Numerous companies within a 400-mile radius of our Oak Creek plant rely on us for their packaging needs.
Yvonne’s position involves submitting reports & correspondence. She maintains program review & respective budgets, merit review submissions, procedural writing, and insures that grant applications & final report gets completed.
Kistler’s position involves training, advising, and assisting advisors, leaders, and logisticians. This involves all facets of warehouse & inventory management, supply chain activities, process improvement, quality control, and logistics automation.
Louis’ position involves process development and quality assurance, and supports development for other plants & customer sites, as needed. He also conducts audits & assesses adherence to key performance indicators.
All three team members are prior military and Louis continues to serve in Reserves.
Independence Corrugated was founded in Oak Creek, Wisconsin in 2004, Independence Corrugated has established an industry-wide reputation for being • Reliable • Accountable • Pioneering.
Chad G. oversees manufacturing and operations at the plant level. Jacob B. provides us with return credits detail.
Both Jon S. and Jeff F. will be involved at the training level, as well as the implementing of upcoming procedures to reduce loading damage.
Six Sigma prescribes an improvement process known as DMAIC: define, measure, analyze, improve, control. Each phase has its own milestones to ensure the project is successfully moving forward and potential challenges or obstacles are identified before moving into the next phase. Many project tasks and activities may be in different phases at the same time or the project may fluidly move between two phases before clearing moving into a single phase.
The define phase identifies what the problem is in its current state without solution. The measure phase measures the current process as it is and performance metrics are identified. The analyze phase looks at the data collected during the measure phase, problems and root causes are identified. The improve phase is when the project team will develop solutions to the problem using the analyzed data and develop a plan of action. The control phase is where the improved process is monitored to ensure performance metrics are met or process improvement is continued.
The problem statement and scope of this project were maintained throughout the entire process. Internal loading damage related to customer credit requests remained the team’s focal point throughout the project. You will see each tool indirectly referring back to this statement. The January thru March data was information already collected by the company that helped us identify a loss of money and a potential for rework.
In the define phase, the current “as-is” work flow established each step of the process as is currently exists. This detailed view helped the team understand the scope of the current process and to visualize data collection opportunities for the measure phase. The as-is work flow is used as the basis for the future recommended workflow.
A SIPOC diagram was used by the team to identify all relevant elements of the project before work began. We started with the macro level current process and then identified the inputs and outputs for each of those steps. This enabled us to easily identify the external and internal suppliers and customers related to the process. The information gained from this exercise helped the team identify the specific customer groups for the Customer Requirement Matrix within the scope of the project directly related to customer credit requests.
To develop our Customer Requirement Matrix, we used the identified customers from the SIPOC and focused on the output they had most in common which was shipping or receiving undamaged product which also tied directly into our problem statement and scope which is internal loading damage resulting in customer request credits.
Utilizing the voice of the customer, we identified a ranking to outline the most important characteristics by priority. This information guided the project focus and is reflected in our final recommendations.
During our measuring phase, we developed a data collection plan starting with the Quality Variance Report which could give us the number of customer credit requests in a given time period, the amount requested, the specific customer, and the specific date of the relevant order. This information was pertinent in identifying our problem statement in the beginning and drilling down to specific customer and shift trends later in the project.
During our development of this plan we realized very little additional data was being collected and we would need to initiate internal data collection methods. This led to internal quality audits that occurred during all three shifts every 4 hours by the Quality Assurance Manager or designated supervisor. Data was collected from the end of July to the end of September to identify any trends. We found just by initiating these audits, damage frequency went down.
Forklift Driver surveys were conducted for all forklift drivers (10 total) and the information analyzed for any trends regarding risk level by process step. This information resulted in different results than anticipated and will be discussed later in the presentation.
The loading process time data collection was not completed as anticipated as this was a secondary concern and not part of the original problem statement. While time is important, the process is driven by the production line. Later in the project, load process time was used to establish takt time.
It was discovered there were no employee training records available or maintained for the forklift drivers pertaining to their driving skills, knowledge, or competency.
As you can see, our data collection plan was driven by the problem statement, the scope of the project, Customer Requirement Matrix, and current workflow.
The fishbone diagram was used to brainstorm potential causes of loading damage using six main categories of causes. It helped the team identify controllable and non-controllable root causes and focus in on related issues.
Knowledge, perception, training, and handling of product were identified focal points.
Management; the most probable root here is that no SOP or remedial training has been documented to date.
Method; the most probable root here is setting a unit down inside the trailer.
Manpower; the most probable root is this category is drivers crushing units by pushing too hard into a unit while moving it into tight trailer spacing.
Measurement; the most probable root here is that no metric is posted/advertised throughout the department/organization.
Environment; the most probable root here is the false belief that haste does not make waste; process first and speed later.
Machines; the most probable root here is stabbing a unit with the end of the forks.
The main definition in this project that is important to remember is “damage” because for the purpose of the company and process, the depth of an indentation or tear of at least .5” for corrugated sheets with no scores and at least .75” for sheets with scores is considered damage. The indentation or tear must meet this criteria in order to be considered damage.
The Force Field Analysis is basically a risk analysis to assist the team identify the supportive and restraining forces as related to the problem statement and scope of the project.
After scoring the probability of each force, the results demonstrated the supporting forces were greater than our restraining forces leading us to believe this was a viable project.
Our mitigating actions directly tie into our final recommendations.
This Likert survey was actually given to the 10 fork lift drivers at Independence Corrugated, Inc. during the past month to determine where the staff who are actually doing the job think the probability lies within the process.
The methodology behind this survey was to ask the front line staff what their perception of damage potential for each step within the process. The team would use this information to pinpoint a specific step or steps in the process that could be specifically addressed while not spending time on steps that had little to no damage. We were looking for root causes at the most basic level of the process.
The survey was handed to each driver during their break by the Quality Assurance Manager and collected.
This graph demonstrates the driver’s perception of the likelihood of damage occurrence during each step in the process. As you can see there is a slight trend of 3 individuals perceiving step 3 as having the potential for damage occurrence and 2 individuals perceiving steps 2 and/or 7 as having potential. The team concluded the most informative data gained from the survey was that most drivers felt there was little to no likelihood of damage occurrence during most of the 7 steps. This could be from a lack of information communicated in the current process regarding frequency of damage occurrence and total cost of damage resulting from customer credit requests, therefore they may not even be aware of much damage is occurring.
The Pareto Principle 80/20 rule implies that 80% of the benefit comes from 20% of the causes. Similarly, 20% of a business causes 80% of the delay or in this case damage. Using the QVR data, it was determined most of the customer credit requests resulted from damage that occurred on the third and second shifts.
It is recommended that Wertheimer be given more care during handling, due to this customer’s elevated sensitivity to damage details and due to their large purchase volume.
Percentage of sales was determined for each customer in this finite set and weights were given.
Then the quantity of QVRs (customer credit requests) were multiplied against their respective weights to obtain an adjusted weight. The Pareto effect then ranks them by adjusted weight %.
In larger a scale for viewing, the length of the damage for each unit is identified as shown above.
Of the 95 units identified with internal damage during the measurement phase, higher probabilities for damage on the unit are circled.
Because trailers are loaded from the right side of each trailer (crowning of roads tilt to the right side) and then filled in from the left side thereafter, often the lower left corner of the unit is damaged as shown.
Other lesser damaged frequencies are noted as shown with circles.
In larger a scale for viewing, the length of the damage for each unit is identified as shown above.
Of the 95 units identified with internal damage during the measurement phase, higher probabilities for damage on the unit are circled.
Because trailers are loaded from the right side of each trailer (crowning of roads tilt to the right side) and then filled in from the left side thereafter, often the lower left corner of the unit is damaged as shown.
Other lesser damaged frequencies are noted as shown with circles.
The product audit involves inspecting for damage, determining if it is within acceptance specification, and sorting out the nonconforming sheets.
The next step is to either reduce the total sheets shipped to the customer or remake the damaged sheets.
Both decisions are directed by the customer.
Million Square Feet (MSF) is used to determine direct materials and direct labor. There is a ratio of 94% to 6%, respectively.
The average number of returns (QVRs) per month is 4.4
Average monthly materials = $776.27; (.94 * $825.82)
Average monthly labor = $49.55; (.06 * $825.82)
Total annual failure costs = $52568.04; (52 occurrences * $1011)
Question for professor regarding cameras.
Interestingly, most of the process has not changed, with the exception of two steps outlined above in red.
Our recommendations focus more on personal buy-in, product auditing twice per shift, sorting of damaged product that results from those audit findings, and competency qualification of the fork lift drivers.
Additional recommendations such as annual training and competency checks, regular communication of metric performance, and the frequency of damage to the drivers is new and will help the drivers make the connection between their position and company outcomes. This ensures less damage is shipped to the customer.
The implications from Atkinson’s article are improving forklift driver education to include “a comprehensive lift truck operator training” (2006, p.2). He mentions Rite-Hite Corp, a company that has studied “causes of load damage for about ten years” which may be a fruitful benchmark partner to seek out. Causes include unstable trailer floors, uneven floor transitions, and push damage from vertical lift bars in which possible solutions are mentioned as options (p.2). Improperly loading cargo into the trailer causes instability and increases shifting potential, thus using appropriate dunnage to fill in all gaps and stabilizing the load prior to shipment (p.3). The article also mentions Kraft Foods NA and their effort to reduce product damage in 1999, another possible benchmarking partner (p.3).
This article directly relates to the process we are attempting to improve and how other companies are managing similar issues we have identified in initial baseline data collection.
The implications from Ecologic’s article is that fiberboard bottles -- which have a plastic liner -- are an earth-friendly replacement for plastic bottles and can be used for a wide variety of consumer products (p. 1). The 60,000-square-foot facility at 550 Carnegie St. was formerly occupied by Amtex, which produced plastic liners closed after its main customer was shut down; a loss of 200 jobs. Corbett said the plant will be dedicated to "new products that replace plastic” (p.1). The Schwarz group, which operates our 13 plants nation-wide, could partner with Ecologic Brands, Inc.
The California plant is one hour North of Manteca, where Ecologic Brands, Inc. resides (p.1). The article also states that Ecologic Brands is running two shifts a day at the Manteca plant, and if demand continues to grow, that could go to three shifts, an around-the-clock operation, by this fall, Corbett said. At its goal of 60 million bottles per year, she said the facility could employ 200 to 300 workers (p.2).
Our team approach is logical and continues with what has been done and leads into a chronological flow:
The implementation strategy starts with the continuation of specific tasks that have deemed useful in the measure phase such as internal damage audits. This leads into the identification of best practices internally and externally so this information can be included in the written Standard Operating Procedures (SOP), training, and competency skills check. Afterwards, the SOP and training will be developed followed by actually doing the training and checking driver competency skills.
The top half exhibit represents costs without Failure Reduction Analysis. Whereas, those costs outlined below are to be considered:
Procedural writing, qualifications competency training, and a damage metric to be updated weekly with the financial impact noted.
Consider inquiring with Rite Hite for best practices training on forklifts and different surfaces that we come in contact with at our plant during the loading process.
Schedule a sales meeting with Ecologic fiberboard bottles, regarding the providing of corrugated product from our NorCal facility to their facility in Manteca, CA. They originally started up production to 6 million corrugated bottle liners in their first year (2013), but were ramping up to producing 60 million per year. It may be worth looking into them for providing hogged corrugated board that NorCal Sheets disposes of for their production, instead of scrapping it out for pennies on the dollar.
Evaluate the use of additional cameras for which to monitor the loading process, so as to further reduce damage.
Again, the top exhibit represents costs without Failure Reduction Analysis. Whereas, those costs outlines below are to be considered.
Again, the top exhibit represents costs without Failure Reduction Analysis. Whereas, those costs outlines below are to be considered.
A control plan is a process management document that summarizes the measurement details (what? Where? How? Etc.) for each process step.
CPs provide increased detail on the measurement controls that will remain in place as ‘business as usual’ after a Lean Six Sigma project is closed.
For each process step, a CP defines the characteristics that are measured, their specification, applicable historical capability, measurement method used and a response plan if out of specification.
As per point one, rises in frequency of damage returns are somewhat semi-annual, with peaks in the winter and summer months.
On the basis of point two, a detectable difference appears to have existed when all three shifts were being monitored and measured (twice per shift) and data collected.
Wertheimer should be given more care during handling, due to their elevated sensitivity.
