150 Elin Appliances

A Case Study on Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement

Keywords: DMAIC, FMEA, KPI Dash Board, NVA, Pilot Verification, Root cause Analysis, Risk Analysis, Six sigma process improvement, VOC

AbstractThis case study illustrates the application of six sigma process improvement to productivity improvement in manufacturing process.

Introduction

To ensure sustainable profitable growth in a highly price-sensitive appliance market Cost reduction through operational excellence is the key imperative. Elin Appliances upgrades can often be justified in terms of savings due to increased productivity. However, in a Six Sigma organization, the DMAIC Method & host of tools can be used to improve productivity through process improvements.

Six Sigma DMAIC

Six Sigma is a quality improvement program that looks at processes with a view to analyzing process steps, determining what process elements need improvement, developing alternatives for improvement, then selecting and implementing one. It relies on a variety of qualitative and quantitative tools, emphasizing the use of data and statistical analysis with in a method called DMAIC, an acronym for the names of its five phases (Define, Measure, Analyze, Improve, and Control) (Table 1). Six Sigma projects are typically selected for their potential savings in improving any process, whether it is in production, administration, engineering, or services. A Six Sigma project typically begins with a high level definition of a process, using a diagram to specify the process boundaries, inputs, outputs, customers, and requirement. In the measure phase, a process metric is selected and used to baseline the current performance of the process. In the analysis phase, the process is analyzed, usually with a process map and a failure modes and effects analysis (FMEA), but may include other types of analysis. The process map shows each process step with its inputs and outputs and provides the basis for either a FMEA or a quantitative, usually statistical, analysis. Areas for improvement are pinpointed and alternatives are generated and evaluated. Once an improvement option is selected and implemented, the project enters the control phase. In this phase, a plan is established for monitoring and controlling the process to ensure that gains are maintained.

The use of the DMAIC method may vary between projects. For example, the Measure and Analyze phases of this project ran concurrently rather than

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 151

sequentially. Also, a proposed solution may emerge early in the Measure and Analysis phase, leading to an emphasis on planning and implementation in the Improve phase. Such was the case in the Productivity Improvement project. Consequently, this paper focuses on the Measure and Analyze phases in which a simulation based on a process map provided the justification for Productivity Improvement.

Table 1. DMAIC Method for Process Improvement

Phase Steps

Define - Identify an opportunity and define a project to address it.

Measure -Analyze the current process and specify the desired outcome.

Analyze - Identify root causes and proposed solutions.

Improve - Prioritize solutions; select, plan, validate, and implement a solution.

Control - Develop a plan for measuring progress and maintaining gains.

Define Phase

As per “Voice of the Customer( VOC )”,customer products should have price stability & products should be competitive in pricing. To meet customer requirement cost reduction is the key driver for profitable growth.

Problem / Opportunity statement

Estimated losses in factory due to poor productivity exceeded 100 K Euros 1. in 2006-2007 financial year

Productivity improvement would generate hard and soft savings.2.

Measure Phase

The Flow through M-Phase-1.

Develop process measures2.

Collect Process data3.

Check data Quality4.

Understand Process behavior5.

6. Baseline Process Capability

Process mapping data for Problem statement – Throughput time: Data collected for all assembly lines

Observation

Thro

uput

time

9181716151413121111

110

100

90

80

70

60

50

40

_X=66.83

UCL=75.18

LCL=58.48111

111

1

11111111

11

1

1

111

11

1111

111

1

1

111111

I Chart of throughput time for Steam Iron

Reduce NVA on line

152 Elin Appliances

Observation

Throu

gh pu

t time

28252219161310741

55

50

45

40

35

30

25

_X=37.43

UCL=50.41

LCL=24.45

11

1

I Chart of throughput time of Juicer Mixer Grinder

As per data, there is wide variation in process through put times

Cycle Time Study of Line

Work stages- LEDI

Cycle

time

in s

econ

ds

Weg

h A Bo

x

Put tin

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Fanc

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ning

Clean

ing &

visua

l che

ck

Dial fix

ing &on

off p

ositio

n

Coolin

g

Temp C

HECKIN

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Pre he

at ing

Safet

y tes

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Inlay

fixing

Cord

routin

g

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ng fix

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Mains c

ord fix

ing

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rew fix

ing

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rmina

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ixing

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ype p

late

Metal co

ver k

eepin

g

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y bkt

fixing

cold

set t in

g

2500

2000

1500

1000

500

0

Chart of Cycletime vs Work stages- LEDI

Work stages - JMG

Cycl

etim

e in

sec

onds

Palle

t

Bopp

TAP

E

Fanc

y box

Buffe

r pac

king

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atchin

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hing

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top ho

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ixing

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d switc

h

Middle

hous

ing vi

sual

180

160

140

120

100

80

60

40

20

0

Chart of Cycletime vs Work stages - JMG

Assembly lines are highly unbalanced due to no value added content.

Root cause analysis of line stoppage

Count 28877173202845 2545 2270 1605 1699Percent 50.5 30.3 5.0 4.5 4.0 2.8 3.0Cum % 50.5 80.8 85.8 90.2 94.2 97.0 100.0

Time i

n minu

tes

Perce

nt

Factors causing line stoppageOther

Utility p

roblems

Manpower issues

Machine breakdown

kit not is

sued

Component not av

ailable

Component qualit

y

60000

50000

40000

30000

20000

10000

0

100

80

60

40

20

0

Pareto of Line stoppage factors for period Jan'07- July'07

Component having high Quality issue

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 153

Why analysis of Non Value Added activity on line

S.No.

Non valuedadded stage

WHY WHY WHY WHY WHY

1 Toaster cooling stage

time Heat dissipation Is not properly controlled

Cooling equipment deficiency

Design of cooling equipment is not optimised

2 Sieve matching and jar matching

Selective assay process

To check for noise and vibration

Unbalanclng of sieve

Interaction effect of components

specs ofcomponentsnotoptimised

3 Iron cooling stage Cooling time is high Uniform cooling is not happening

Iron farthest from fan takes longer time to cool

Iron coding is influenced by ambient conditions also

cooling arrangement Is adequate

4 Preheating stage Has to go through 3 heating cycles

This is a to ensure iron attains steady state

Requirement for 100% temp validation

Reliability of cold setting

Cold settingprocessInadequate

5 Packaging and cleaning

line Packaging stages are not balanced

Manual and too many offline activities

To many items in packaging design

Packaging design not simple

6 Pop up testing time at the testing stage

Only four toasters can be tested at a time

Testing equipment capacity is a bottleneck

Equipment is not designed to line speed.

Analyze Phase

The flow through A-phase

Determine potential root cause to measure1.

Analyze data using process stratification2.

Verify root causes with test data3.

Solution selection process

Evaluating criterias Generate

solution ideas

Select solutions determine cost benefit

Verify solutions with tests & data

Map new process

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High impact solutions selected against each problem statement

Problem statement Line stoppage

Remove hex screw

Problem statement High NVA & TPT

Problem statement High TPT

Replicate steam iron cooling jig

Introduce conveyor belt

Recalibrate standard

Duplicate /repair moulds

Plastic JMG collar

Enclosed chamber for powder

Jar assy relocation Near to comaker

Source sieve from better supplier

Automate cold setting process

Temperature checking on sampling basis

Control Sieve unbalance <10 mg& motor coupler Within 0.1 mm run out

Increase capacity of pop up testing jig

Simplify packing and cleaning stages

Strengthen engineering function at comaker

Standing working

Streamline material feeding

Automate RTV application

Implement phase

The Flow through implement phase-

Assess risk using FMEA•

Design implementation plan•

Communicate to People•

Pilot solution and track improved performance •

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 155

Elements of an implementation plan

Project plan

Budget/control

Communication

Updating the business case & objectives

Identifying resource requirements

Dealing with resistance

The implementation plan

Risk analysis by FMEA

Overview of pilots

Some of the high risks for solutions that were addressed through FMEA

S.No. Solution Failure mode Recommended actions

1 Conveyorisation a. Breakdownb. Misalignment in speed

1. Proper design evaluation and release 2. Preventive maintenance plan 3. Proper pilot.

2 Standing working a. High fatigue levels below morale in operators

1. reconfirm working ergonomics during pilot

2. have a proper communication plan to deal with resistance and change

3. show bench marks

3 Milkman feeder Material not reaching on main line on time.

1. Proper routing plan2. proper design of material transfer trolleys

4 Sampling checking of temperature at nine stage

Irons with high/ ow temp, passing Into market

1. Cold setting and nine stage in a con-trolled atmosphere

2. Control plan far cold setting process 3. Introduce automation in cold setting process

5 Automation In RTV application

a. Machine breakdownb. High cycle times c. High wastages

1. Preventive maintenance plan 2. SOP for Job setup validation and how to

operate the machine.

6 Deletion of antirust in finished irons

Oxidation of soleplate in market 1. Proper evaluation and release 2. ControlonT1088 Aluminium composition

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Pilot verification plan was used to modify the proposed solutions before implementation

S.No. Pilot on Proposed solution

Pilot Verification Modifications done on solutions

1 Automation on RTV application

1. High wastage of RTV2. Misalignment of RTV

dispenser with soleplate3. new failure points identified

1. Reprogramming of m/c 2. reduce nozzle dia3. make work instruction and

training4. revision of critical spares list

2 Oil shields in Jar pots

1 Paper caps not durable 2. Fitment Issues3, Operator needs training.

1. change into plastic caps 2. modify dimensions 3.Training was provided.

S Introduce cooling jigs

1 Metal cover not cooling in required time

2. Compressor not getting burnt

1. Addition of cooling fans on top

2. proper capacity of compressors were incorporated in the design.

4 Standing Working 1. Operator fatigue 2. mental bafflers 3. working ergonomics not

proper

1. Gradual phasing in of standing working

2. one to one communication channels

3. lncrease table height

The improved process-Primary metric unit/man hour

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1000

500

0

Week no

Wee

kly

D.T

in m

inut

es

_X=165

UC L=516

LC L=-186

b a

809803749743737731725719713707701

600

450

300

150

0

Week no

Mov

ing

Rang

e

__MR=132.1

UC L=431.6

LC L=0

b a

1

1

Down time trend of Low end dry Iron

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 157

Process mean improved with reduced variation

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6

5

4

3

2

Week no

Wee

kly

unit/

man

hou

r

_X=4.658

UC L=5.287

LC L=4.030

A B

808802746740734729723716709703

3

2

1

0

Week no

Mov

ing

Rang

e

__MR=0.236

UC L=0.772

LC L=0

A B

Unit / man hour for Dry Irons(NDI/ODI )

Down Time Trend

Control Phase

Implement permanent control methods

• Track and confirm improved long term process capability

• Standardize control plan

• Identify leverage opportunities

• Validate final financial results

• Project handout

KPI Dash board – The Process outputs to be monitored

S.No.

What are the Y’s to be monitored

Who will measure/ monitor

Control methods

1 Unit per man hour Production manager Control chart & OCAP

2 TPTof main assy process Line supervisor Control chart & OCAP

3 Hourly rate of production for main assy

PPC manager Control chart & OCAP

4 Line stoppage time Production manager Control chart & OCAP

5 DPMO Quality manager Control chart

158 Elin Appliances

Results of Project

Financial Pulse

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 159

Productivity (Measured in Unit per Man hour)

Learnings from Project

• A rigorous base line is important to define the improved state of the process

• Never underestimate the power of Pilots for an effective implementation of solutions

• It is important to build a critical mass of people who will build the change in the organization

• An effective and consistent communication plan is the key for embedded change

• Behind every good product there is a good process