ISE 250 Optimization of Lead Time for XYZ Corp. -Dr. Baruch Saeed

1
ISE 250Optimization of Lead Time for XYZ
Corp.-Dr. Baruch Saeed

• Final Project Report

Anandi Rangarajan Angela Lo Rohit Salte Sharath
Puttabuddi
2
Agenda

• Company Background
• Define
• Measure
• Analyze
• Improve
• Control
• Conclusion

3
Description of XYZ

• Company Description
• A company that manufactures microprocessors and
  delivers to all over the world
• Problem Areas
• Long customer responding time it takes between
  2 days and 25 days until customers get response
  on order availability
• Large amount of change order request
• High volume of follow up calls / emails on order
  clarification

4
Define
Charter
SIPOC
CTQ Tree
Brainstorming
Process Flow Diagram
Flow Chart
Project Gantt Chart
5
Brainstorming
What areas can be improved?
Takes long time for manufacturing site to work on
build plan
Takes long time for request to get to PSP
Takes long time for customers to receive response
Takes long time for BP to discuss with the fab
Hard to accommodate when customers have to change
orders
Better meet customers demand
6
SIPOC
Inputs
Process
Customers
Suppliers
Outputs

• Order
• Order form
• Granting Tool
• Packing

• Client
• CBA
• GBA
• PSP
• Warehouse

• See Below

• Order Fulfillment

• Client

Step 1 Receiving Customer Order
Step 2 Accumulation of Orders
Step 3 Checking Inventory / Mfg if required
Step 4 Committing Order fulfillment
Step 5 Customer receives the products
PSP Product Supply Planner GBA Geographical
Business Analyst CBA Customer Business
Analyst BP Business Planner
7
Charter
Problem Statement Need to eliminate long waits for customers to get the companys response on their orders
Customers High-Tech companies from all over the world
Business Case Increasing customers satisfaction by reducing lead time Reducing analyzing time on build plan by improving communications between BPs and the Fab Better knowledgeable Customer Business Analyst to minimize the chance of order change from customers
Scope The company should find ways to improve their responding time to customers The company should focus on the effective process flow within the company to minimize the processing time
8
Charter cont
Measures Long responding time is considered to be more than 1 ½ day until the customers receive their order response Long discussion time between the fab and BP is considered to be more than 3 days
Deliverables Create details proposals on how to improve the overall system Implement a more efficient process flow within the company Provide a plan for ongoing monitoring and improvement on this process
Resources Team Sponsors Kevin Li Team Members Angela Lo, Sharath Puttabuddi, Rohith Salte, Anandi Rangarajan Coach Dr. Baruch Saeed
9
Project Implementation Gantt Chart
10
CTQ Tree
In manufacturing, specification limits often come
from technical or mechanical requirements,
otherwise, the base specification limits on data
about customer needs set the specifications where
customer satisfaction starts to fall off
noticeably
CTQ Tree is used for Unspecified customer
requirements Complex, broad needs
NEED
DRIVERS
CTQ TREE
New Decision Support GUI tools that improve the
ability to fine-tune schedules to give better
conformance to overall plans
Enhanced scheduling
Implementation of Business Intelligence
Applications
Making right decision in shortest time
To reduce the lead time
Build local sales office to replace existing
single-site
Faster and better communication lines
Implementation of faster and multi-faceted
Collaborative communication systems such as
Telephone, mobile phone, internet chat
Faster production of schedule
More time for alternative scenarios of
production, leading to better schedules and
improved productivity
11
CTQ Treecont
NEED
DRIVERS
CTQ TREE

Implementation of ERP/SCM systems
Short wait time
To reduce the analyzing time between BPs and
Fab
Real-time manufacturing/sales data
Implementation of workflow- based Decision
Support Systems and Data Mining tools
Improved process-related guidance systems
Provide updated information to Customer Reps
PROVIDE Knowledgebale Customer Reps
To provide Good Customer Service
Implement a training routine
Provide GUI tools to help make faster and
correct decisions
Implementation of data mining and analytical
tools to provide accurate and current data
12
Current Process Flow Diagram
1 day
½ day
½ day
Customers order
CBA receives orders
CBA sends order to GBA
GBA accumulates and enters all orders into one
spreadsheet
GBA sends order form to PSP
PSP receives order form
Order form
1 day
1 day
7 days
PSP checks inventory
PSP sends Out support message to GBA
PSP loads commits into granting tool
GBA sends Support Message to CBA
CBA receives support message books commits for
customers
Warehouse sends goods out
Goods are boxed
Customer Receives orders
Work with BP If supply is not available
BP works with the Fab on build plan changes
Change approval sends to PSP
Approval of changes
21 days
Current Processing Time Inventory Available 11
days Inventory Not Available 32 days
PSP Product Supply Planner BP Business Planner
CBA Customer Business Analyst GBA
Geographical Business Analyst
13
Process Flow Diagram
14
Measure
Data Collection
Histogram
Pareto Chart
Process Sigma
15
Data Collection

• Focused Areas
• Average Responding time to customers
• Average Amount of follow up calls / emails

16
Data-Collection Plan Form
Data Data Operational Definition and Procedures Operational Definition and Procedures
What Measure type/ data type How measured How to analyze the data
To obtain a better understanding of customers satisfaction and to reduce the lead time Instant Observation (in hours) CBA records time when they receive customers order PSP records time when they receive GBAs orders BP records the time needed to work on build plan with the Fab By producing graphs or charts Understand special factors that affect the data Getting results by interpreting the data collected
17
Responding Time
order Response Time   order Response Time   order Response Time  
1 21hrs 40mins 11 2hrs 25mins   21 5hrs 40mins  
2 21hrs 40mins 12 2hrs 25mins   22 5hrs 10mins  
3 20hrs 35mins 13 23hrs 10mins   23 5hrs 5mins  
4 19hrs 35mins 14 23hrs 5mins   24 21hrs 5mins  
5 21hrs 45mins 15 22hrs 25mins   25 21hrs 5mins  
6 21hrs 45mins 16 22hrs 20mins   26 19hrs 55mins  
7 22hrs 15mins 17 22hrs 20mins   27 19hrs 10mins  
8 20hrs 45mins 18 5hrs 55mins   28 18hrs 30mins  
9 24hrs 10mins 19 5hrs 45mins   29 18hrs 5mins  
10 24hrs 05mins 20 5hrs 45mins   30 18hrs 5mins  
Responding time CBA Responding time CBA
Receiving time
18
Histogram
Avg Responding Time   Avg Responding Time  
0 - 5 hrs 2
5 - 10 hrs 6
15 - 20 hrs 6
20 - 25 hrs 16
19
Follow up calls / emails
Between   of follow up emails / phone calls of follow up emails / phone calls of follow up emails / phone calls of follow up emails / phone calls of follow up emails / phone calls    
    Monday Tuesday Wednesday Thursday Friday Total/week Avg/week
CBA and GBA 12 15 8 20 4 59 11.8
GBA and PSP 18 15 6 12 3 54 10.8
PSP AND BP 6 2 7 4 1 20 4
BP and Fab 3 4 2 2 2 13 2.6
20
Pareto Chart
Focused Area Communication and Process Flow
between CBA and GBA
21
Matrix Diagram
Interact with customer Review inventory Initiate production order Review production status Training
CBA
GBA
PSP
BP
Fab
CBA Customer Business Analyst GBA
Geographical Business Analyst
PSP Product Supply Planner BP Business Planner
Primary responsibility
Resources
22
Analyze
Cause Effect Diagram
FMEA
House of Quality
23
Timing
People
Tools
Lack of system maintenance
Lack of labor resources
Limited budget
Inadequate training
System errors
Training program Is not well developed
Delayed communication down the line
Inadequate staffing
Time zone difference
Inefficient Analyzing Tool
Limited training budget
Inadequate staffing
Difficult to interpret
Cost cutting
Natures creation
Limited budget
Lack of technology initiatives
Lack of system maintenance
Limited budget
Outdated (manual) tools
Outdated (manual) tools
Long response time
Long communication time between fab and BP
Bottleneck in process flow
Time zone difference
Heavy workload of staff
Long process flow
Time zone difference
Vertical decision making
Heavy loads of orders and changes from customers
Hierarchical decisions
Hierarchy decisions
Inefficient feedback tool
High mfg lead time
Lack of inventory holding
Inadequate communication Media (between within
org.)
Inadequate staffing
Improper forecasting
Outdated forecasting tools
Unscheduled Mfg
Less transparency In data sharing
Improper capacity prediction
Numerous processing steps
Redundancy in order processing
Lack of technology initiatives
Communications
Vertical decision making
Limited budget
Outdated (manual) tools
Ordering Procedures
24
Root Causes in Fishbone Diagram

• Long Process Flow
• Lack of training
• Inefficient analyzing tool
• Lack of feedback / rating system
• Inefficient real time inventory system

25
FMEA
26
House of Quality
27
Improve
PDCA
Flow process diagram
Communication Plan
28
PDCA - Plan
Plan Execution Steps Metrics Expected Results
Quick Response Program Present program to all team managers and planners Receive feedback or suggestions Improve program and launch pilot Pilot team records amount of time needed to respond and the number of error occuring -Responding Time (in min) / order - of errors / day -decreased amount of responding time -decreased number of errors
Automated commits Loading Program Work with engineering team to create the tool Pilot team to test the tool Launch and train all counterparts Receive internal feedback and customer rating - Internal and external rating and feedback - Higher rating from customer and employees
Marketing Update Meeting Setup time for Business Planners and Marketing Representatives to meet Update each other on build plan vs. customers requirement Suggestion and Feedback -Internal feedback - of change requests - Decreased amount of change order requests
29
PDCA

• DO
• Pilot team will be setup and test the program
• Record the total time needed to respond to
  customer requests
• Record the number of error / complaints that
  occur
• Record the amount of change requests from
  customers
• Check
• Compare actual results with our expected results
• Find out the reasons behind
• Act
• If actual / better than expected, then
  standardize the process
• Otherwise, determine root causes, improve the
  proposed process, try again!

30
Proposed Process Flow Diagram
½ days
7 days
Customers order
CBA receives orders
CBA look at the automated Commit Loading Tool
CBA books commits through the automated tool
Warehouse Send goods out
Customer receives orders
2 hours
2 hours
2 hours
CBA put not supported requests in the spreadsheet
GBA access order forms from the shared drive
GBA collects data and create demand report
PSP reviews order requests from GBA
Order form
2 hours
2 hours
PSP works with BP to determine If
immediate Support is allowed
PSP sends support message to GBA
PSP loads commits Into granting too
GBA sends support message to CBA
Proposed Processing Time Inventory Available 7.5
days 9 days Inventory Not Available 20 days
BP works with Fab on build plan changes
Approval of support sent to PSP
Approval of changes
11 days
31
Process Sigma

• Data considered to determine process sigma

Defect opportunities (O) Defect per opportunities (D)
Customer request change 39
Missing information 10
Customer cancellation 7
Wrong information 3
Total number of defects 59
Average number of calls processed per week, N100
32
Communication Plan
Role Who Main Concerns Communication Notes
Team Manager Managers of CBA, GBA, PSP, BP, and Fab Re-organize job functions of their team members Project Presentation by Group Managers Open Forums for QA Progress Report every two weeks Communicates areas for improvement / business accomplishments Regular Project Update Meetings Lessons we learned
Team Member CBA, GBA, PSP, BP, and Fab Work hours / benchmarks Connections with counterparts Project Presentation by Group Managers Open Forums for QA Progress Report every two weeks Communicates areas for improvement / business accomplishments Regular Project Update Meetings Lessons we learned
Team Coach Six Sigma Team Efficiency of the process flow Project Presentation by Group Managers Open Forums for QA Progress Report every two weeks Communicates areas for improvement / business accomplishments Regular Project Update Meetings Lessons we learned
Process Owners Superuser Reps Transaction from old process to new process Project Presentation by Group Managers Open Forums for QA Progress Report every two weeks Communicates areas for improvement / business accomplishments Regular Project Update Meetings Lessons we learned
Customers All customers Accurate shipping time Stable availability on Supply Improvement Proposal Reports on how they will benefit from it Recommendation or concerns
33
Control
Process Sigma
34
Process Sigma cont
Number of defect opportunities per unit O 4
Number of units processed N 100
Total number of defects made (Including Rework) D 59
Defect opportunities per unit. DPO D/(NO) 0.1475
Yield (1-DPO)100 85.25
Long-term process sigma 2.54
Actual Process Sigma 1.04
35
Process Sigma (Post- PDCA)
Data considered to determine process sigma
Defect opportunities (O) Defect per opportunities (D)
Customer request change 30 (From 39 to 30)
Missing information 0 (From 10 to 0)
Customer cancellation 4(From 7 to 4)
Wrong information 0 (From 3 to 0)
Total number of defects 34
Average number of calls processed per week, N100
36
Process Sigma (Post- PDCA) cont
Number of defect opportunities per unit O 4
Number of units processed N 100
Total number of defects made (Including Rework) D 34
Defect opportunities per unit. DPO D/(NO) 0.085
Yield (1-DPO)100 91.5
Long-term process sigma 2.875
Actual Process Sigma 1.375
37
Summary of Used Tools
Stage Used Tools
Define Charter CTQ Tree SIPOC
Measure Data Collection Process Flow Diagram Histogram Pareto Chart Process Sigma
Analyze Brainstorming Cause-and-Effect Diagram
38
Summary of Used Tools
Stage Used Tools
Improve FMEA Matrix Diagram Prioritization Matrix Matrix Diagram Process Sigma House of Quality
Control Communication Plan
39
Conclusions
40
Appendix
41
Project Gantt Chart
42
Data Collection
43
Data Collection (contd.)
44
Pareto Chart
Focused Area Communication and Process Flow
between CBA and GBA
45

• Thank You