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 Dave (VP) Champion, Denise (Customer at reduction to 10% in one month, reduction to 2% or less in Service) Process Owner, Pat (Production two months Deliverables: On-time Manager) Team Member, Cindy Work Orders, On-Time deliveries, Best practice procedures (Accounting) Team Member, Jim (Quoting) Team Member, Richard (Design) Team Member Preliminary Project Plan Target Date Actual Date Deliverables: Define 4/27/2009 4/27/2009 On-Time Work Orders Measure 4/29/2009 4/29/2009 On-Time Deliveries Best Practice Procedures Analyze 4/30/2009 4/30/2009 Improve 5/29/2009 5/29/200 9 Control 8/1//2009 8/1/2009 Prepared by: Approved by: Dave Rettig Paul Gormas

 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 Prepare Purchase Hand-Off Quote Work Order To Order Plant

S I P O C Suppliers Inputs Process Outputs Customers Input requirements and Output requirements Provider measures and measures Receiver Start: 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 Delays Prepare Hand-Off Purchase From Find Work Quote Interruptions To Order Correct & Order Plant Data Bottlenecks

 Key Process Output Variable: Y1: Number of Late Work Orders

Total and Late Work Orders Comparison YTD 2009 40 35 30 25 Total Work Orders # of Work Orders Late Work Orders 20 15 10 5 0 Jan Feb March April

 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

Root Cause Analysis – Cause & Effect Manpower Machines Bad Copy or Fax Unbalanced Work Loads Poor Handwriting Uneven Work Flow Heavy Work Loads Can’t Read PO Data Doesn’t Make Sense Lack of Communication & Coordination Late Work Orders People Continually Asking for Info & Data Data Not Provided to Plant or Office Data Missing Data Incorrect Interruptions No Master Database Quote Not Complete Looking Up Invoices & Tracking #’s Constant Phone Calls Materials Methods

Pareto Chart 100.0% 97.4% 92.3% 90.0% 35 84.6% 80.0% 30 76.9% 70.0% 66.7% 25 60.0% 56.4% Defects 20 50.0% 15 40.0% 15 38.5% 30.0% 10 7 20.0% 5 4 4 3 3 10.0% 2 1 0 0.0% Interruptions Heavy Work Quote Not Can't Read PO Can't Find Quote New Customer Part Being Create New Part Load Complete Info Revised

 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