Project Charter High Level Process Map SIPOC SWOT Analysis CTQs - - PowerPoint PPT Presentation

Deliverables

• Project Charter
• High Level Process Map
• SIPOC
• SWOT Analysis
• CTQ’s (Critical to Quality Customer Requirements)
• Cost of Poor Quality

Project Charter

Project Name:

Work Order Development

Business Case:

Eliminating late Work Orders will improve on time deliveries to customers; improve production scheduling and plant capacity, reduce errors, rework and OT, and improve customer satisfaction which will increase margins by 2% or approximately $100,000 per year.

Problem/Opportunity: Scope, Constraints, Assumptions:

25% of work orders are late Start: Quote Stop: Hand-off of work order to plant In-bounds: Sales, Quoting, Design, Customer Service Out of bounds: Manufacturing, Shipping

Goal: Team Members:

Eliminate all late work orders. Set milestones for improvement at reduction to 10% in one month, reduction to 2% or less in two months Deliverables: On-time Work Orders, On-Time deliveries, Best practice procedures Dave (VP) Champion, Denise (Customer Service) Process Owner, Pat (Production Manager) Team Member, Cindy (Accounting) Team Member, Jim (Quoting) Team Member, Richard (Design) Team Member

Preliminary Project Plan Target Date Actual Date Define 4/27/2009 4/27/2009 Measure 4/29/2009 4/29/2009 Analyze 4/30/2009 4/30/2009 Improve 5/29/2009 5/29/2009 Control 8/1//2009 8/1/2009 Prepared by: Paul Gormas Approved by: Dave Rettig Deliverables:

On-Time Work Orders On-Time Deliveries Best Practice Procedures

 Project Name: Work Order Development  Problem Statement:

The cycle time from quote to work order delivery is exceeding the 2 day standard for 25% of work orders causing inefficiencies in manufacturing and late deliveries

 Goal Statement:

Eliminate all late work orders. Set milestones for improvement at reduction to 10% in one month and 2% or less in three months

 Deliverables:

On-time Work Orders, On-Time deliveries, Best practice procedures

 Initial Cost of Poor Quality Estimate:

The COPQ (Cost of Poor Quality) is approximately 2% of margin or $100,000 of net profit annually.

 Process Start : Quote  Process Stop: Hand-Off of Work Order to

Plant

 In bounds: Sales, Quoting, Design, Customer

Service

 Out of bounds: Manufacturing, Shipping

 Project Schedule:

• Define Phase

Complete by 4/27/2009

• Measure Phase

Complete by 4/30/2009

• Analyze Phase Complete by 4/31/2009
• Improve Phase

 Pilot Implementation Complete by 5/29/2009

• Control Phase Complete by 8/1/2009

 Dave (VP) Champion  Denise (Customer Service) Process Owner  Pat (Production Manager) Team Member  Cindy (Accounting) Team Member  Jim (Quoting) Team Member  Richard (Design) Team Member

High Level Process Map

Purchase Order Prepare Work Order Quote

Hand-Off To Plant

S I P O C Suppliers Inputs Process Outputs Customers Provider Input requirements and measures Start: Output requirements and measures Receiver Sales contacts with customers High-Level Process Description: Quoting Department Estimating Quotes Acknowledgement with Order Entry Projected Delivery Date External Customer External Customer Purchase Order Engineering Designs/Drawings Convert Order to Work Order Router Customer Service Print Pick List and Traveler Bill of Material Check Material Status and Order Materials Drawings Prepare Documentation Generate Order Tags and Drawings Work Order Plant Hand Off to Plant Date Received by Plant End: Plant Receives Complete and Correct Work Order

 Customers

• External Customers
• Customer Service
• Plant

 Sampling Method

• Data Collection Sheet, all work orders YTD Jan. 1 –

April 30, 2009

 VOC – Customer interviews and complaints

SWOT ANALYSIS - Work Order Development

STRENGTHS WEAKNESSES Can do capability Dots not connected Good knowledge Lack of ability to pull together All the tools Time schedules tight Good accuracy Experience No consistent numbering system or central database of information OPPORTUNITIES THREATS Creating a system that allows for retrieving info Losing customers Streamline order entry process Losing employees People are suggesting potential solutions Internal customers dissatisfied Improved plant efficiency Image in Industry Lack of disciplines and follow through Inefficiency in plant

 Accuracy of Work Orders  Timeliness of Work Orders  On Time Deliveries  Excellent Response on Customer Service

Issues

 Retention of Experienced Employees

Quotes per Day 17 Converted to Work Orders 10% 1.7 Work Orders per Year (260) Days 442 Work Orders Late 25% 111 AVG Cost per Late Work Order Overtime $300.00 Lost Revenues (Customer Dissatisfaction) $500.00 Turnover (Employee Dissatisfaction) $200.00 Total Average Cost $1,000.00 Total Cost $111,000.00

Deliverables

• Current State Process Map
• Baseline Process Performance
• MSA
• Data Collection Plan
• Data Collection
• Cost of Poor Quality

Current State Process Map

Purchase Order Find Correct Data

Delays From Interruptions & Bottlenecks

Prepare Work Order Quote

Hand-Off To Plant

 Key Process Output Variable:

Y1: Number of Late Work Orders

Total and Late Work Orders Comparison YTD 2009 5 10 15 20 25 30 35 40 Jan Feb March April # of Work Orders

Total Work Orders Late Work Orders

 Key Process Output Variable Performance

• Y DPMO = 256,000
• Y Sigma Level = 2.1

 Key Process Input Variables Identified as

contributing to the undesirable Key Process Output Variable (Y):

• X1: Interruptions
• X2: Heavy Work Load
• X3: Quote Not Complete
• X4: Can’t Read Purchase Order
• X5: Can’t Find Quote
• X6: Part Being Revised
• X7: Create New Part
• X8: New Customer Information

 Measurement System is a Data Collection

Sheet

 Sampling is evaluation of 100% of Work

Orders generated YTD 1/1 to 4/30, 2009 for baseline data and100% of Work Orders generated in future for pilot and control going forward

Late Work Orders - Data Collection Sheet

Paul Gormas Reason Work Orders Late - Mark with X Late Quote Inter- Heavy Quote Can't Can't Part Create New WO # Acceptance ruptions Work Not Read Find Being New Cust Date Load Complete PO Quote Revised Part Info 33358 1/2/2009 x 33362 1/6/2009 x 33367 1/9/2009 x 33370 1/12/2009 x 33375 1/15/2009 x 33378 1/16/2009 x 33383 1/19/2009 x 33386 1/23/2009 x 33391 1/27/2009 x 33394 1/29/2009 x 33399 2/2/2009 x 33402 2/4/2009 x 33407 2/10/2009 x 33409 2/11/2009 x 33414 2/16/2009 x 33417 2/19/2009 x 33422 2/25/2009 x 33425 2/27/2009 x 33430 3/2/2009 x 33433 3/5/2009 x 33438 3/10/2009 x 33441 3/13/2009 x 33446 3/16/2009 x 33449 3/18/2009 x 33454 3/24/2009 x 33457 3/27/2009 x 33462 3/30/2009 x 33465 4/3/2009 x 33470 4/6/2009 x 33473 4/7/2009 x 33478 4/9/2009 x 33481 4/13/2009 x 33486 4/15/2009 x 33489 4/20/2009 x 33494 4/22/2009 x 33497 4/23/2009 x 33502 4/28/2009 x Count 37 15 7 4 4 3 2 1 3

COPQ and ROI - Work Order Development Cost of Poor Quality

Quotes per Day 17 Converted to Work Orders 10% 1.7 Work Orders per Year (260) Days 442 Work Orders Late 25% 111 AVG Cost per Late Work Order Overtime $300.00 Lost Revenues (Customer Dissatisfaction) $500.00 Turnover (Employee Dissatisfaction) $200.00 Total Average Cost $1,000.00 Total Cost $111,000.00

Return on Investment and Payback

Target Reduction 92% $102,120 Prevention Costs $10,000 ROI $10:$1 Payback Period (days) 36

Deliverables

• Root Cause Analysis – Fishbone Diagram
• Pareto Chart
• KPIV’s
• Cost of Poor Quality

Late Work Orders Manpower Machines Materials Methods

Heavy Work Loads Interruptions Quote Not Complete Can’t Read PO

Unbalanced Work Loads Uneven Work Flow Lack of Communication & Coordination Bad Copy or Fax Poor Handwriting

Root Cause Analysis – Cause & Effect

People Continually Asking for Info & Data Data Not Provided to Plant or Office Constant Phone Calls Data Doesn’t Make Sense Data Missing Data Incorrect Looking Up Invoices & Tracking #’s No Master Database

15 7 4 4 3 3 2 1 38.5% 56.4% 66.7% 76.9% 84.6% 92.3% 97.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 5 10 15 20 25 30 35 Interruptions Heavy Work Load Quote Not Complete Can't Read PO Can't Find Quote New Customer Info Part Being Revised Create New Part Defects

Pareto Chart

 X1: Interruptions  X2: Heavy Work Load  X3: Quote Not Complete  X4: Can’t Read Purchase Order

COPQ and ROI - Work Order Development Cost of Poor Quality

Quotes per Day 17 Converted to Work Orders 10% 1.7 Work Orders per Year (260) Days 442 Work Orders Late 25% 111 AVG Cost per Late Work Order Overtime $300.00 Lost Revenues (Customer Dissatisfaction) $500.00 Turnover (Employee Dissatisfaction) $200.00 Total Average Cost $1,000.00 Total Cost $111,000.00

Return on Investment and Payback

Target Reduction 92% $102,120 Prevention Costs $10,000 ROI $10:$1 Payback Period (days) 36

Deliverables

• Improve Solutions Recommendations
• Affinity Map
• Future State Process Map
• Pilot Project Implementation Plan
• Post Implementation Results Validation & Capability
• Cost of Poor Quality

 Team brainstormed ideas to address

priority issues and root causes identified by pareto and cause & effect analysis

Interruptions

Develop Master Database Give Data Access to Co. Develop Cust. Contact Proc. Enter needed data in DB Force calls to go direct Better up front communication Identify critical priorities

Heavy Work Load

Balance work load Rewrite job descriptions Rebalance work force Create a consistent work flow Improve teamwork in office Reduce interruptions Better automation of process

Process Issues

System require & edit data Set Std. for PO’s Develop data conventions Upgrade fax machine Exception reporting Issue tracking Feedback to inputs

 Applied impact vs. cost analysis to select final

improvement solutions

 Initial solutions were selected and

consolidated as follows:

• Develop consistent data standards and conventions
• Establish and enforce time, completeness and

accuracy standards for quotes and PO’s

• Create online database and make accessible to all

employees

Future State Process Map

Purchase Order Access Database Prepare Work Order Quote

Hand-Off To Plant

 Pilot Start Date: 5/4/2009  Pilot End Date: 5/29/2009  Feedback Method to Improvement Users:

• Report on Late Work Orders
• Database use and interruptions

 Feedback Method to Team:

• Report on Late Work Orders
• Database use and interruptions

 Develop new data standards  Develop trail database on Access – IT  Train all users  Start up trial on 5/4  Track new processes and late WO’s for 4 days

• n first phase

 Make adjustments and continue pilot

 Database Uses  Interruptions each Day  Work Orders Processed  Work Orders Late

 KPOV – Late Work Orders  Measurement - % of Work Orders Late

• Baseline 25%
• Improvement goal metric 2%
• Actual Pilot metric 15%

 Database Uses

• Baseline Metric 0
• Improvement Goal Metric 50/day
• Actual Pilot Metric 25/day

Database Uses

10 20 30 40 50 60 Baseline 4-May 5-May 6-May 7-May Pilot AVG IMP Goal

 Interruptions Per Day

• Baseline Metric 20
• Improvement Goal Metric 4/day
• Actual Pilot Metric 11/day

Interruptions

5 10 15 20 25 Baseline 4-May 5-May 6-May 7-May Average IMP Goal

 Lessons Learned

• Initial

tial Communica municati tion

• n and Tr

Training ing are key to succe ccess ss

• Invol

nvolvement vement of a b broader der team m in solution ution development elopment stage ge will help with buy-in in

• Acc

ccess ss Program gram will be OK OK as a p pilot t process, cess, but IT T should uld ev eval alua uate te dat ataba abase se softwa tware e more re speci cifi fically cally suited ed for work k order r development lopment applicati ications

• ns

 After phase 1 of the pilot, the initial cost of

poor quality and ROI projections are the same as initially projected

COPQ and ROI - Work Order Development Cost of Poor Quality

Quotes per Day 17 Converted to Work Orders 10% 1.7 Work Orders per Year (260) Days 442 Work Orders Late 25% 111 AVG Cost per Late Work Order Overtime $300.00 Lost Revenues (Customer Dissatisfaction) $500.00 Turnover (Employee Dissatisfaction) $200.00 Total Average Cost $1,000.00 Total Cost $111,000.00

Return on Investment and Payback

Target Reduction 92% $102,120 Prevention Costs $10,000 ROI $10:$1 Payback Period (days) 36

Deliverables

• Full Scale Implementation Plan
• Detailed Control Plan
• Cost of Poor Quality
• Lessons Learned

 Continue Pilot Program Phases

• Phase 1 Week 1 4-May to 7-May
• Phases 2-4 each week through end of May

 Track database use, interruptions and correlation to late work orders with weekly reviews  Utilize feedback to make adjustments

 IT evaluate database software with recommendation

due on June 1

 Approve and install new software by July 1  Achieve full implementation and final goal by Aug 1

 Training and Communication will be

accomplished by project Champion, Process Owner and IT during phase 1 pilot

 Full capability will be accomplished during

pilot phases 2-4

CONTROL PLAN

Project Title: Work Order Development Process Owner: Denise Roberts Metric Target Collected Sample Size Collection Review Value By Frequency Method Frequency Interruptions 4/Day DR All Check Sheet Weekly Database Use 50 Uses/Day IT All System Rpt Weekly Late Work Orders 2% DR All Check Sheet Weekly

 Interruptions  Database Usage  Total Work Orders Processed  Late Work Orders # and as # of Total Work

Orders Processed

 Same as previously projected

COPQ and ROI - Work Order Development Cost of Poor Quality

Quotes per Day 17 Converted to Work Orders 10% 1.7 Work Orders per Year (260) Days 442 Work Orders Late 25% 111 AVG Cost per Late Work Order Overtime $300.00 Lost Revenues (Customer Dissatisfaction) $500.00 Turnover (Employee Dissatisfaction) $200.00 Total Average Cost $1,000.00 Total Cost $111,000.00

Return on Investment and Payback

Target Reduction 92% $102,120 Prevention Costs $10,000 ROI $10:$1 Payback Period (days) 36

 Project Closeout:

• Final paperwork completed
• Handoff to Process Owner 5/4
• Business Case same as previously stated

Eliminating late Work Orders will improve on time deliveries to

customers; improve production scheduling and plant capacity, reduce errors, rework and OT, and improve customer satisfaction which will increase margins by 2% or approximately $100,000 per year.

 Involve the process owner in the

development of the data collection check sheet earlier in the process

 Conduct more training overview of the Six

Sigma project process with the whole team up front

 Drill down deeper on the facts surrounding

the issue in the define step