Package Development Process - Post MortemReduction of Product Returns Caused by Improper HandlingMr. Alan Masnek, CPP(Seagate Technology)ETM 5131 ProjectJuly 28, 2003

Problem Statement:Develop a packaging container to decrease the problem: Product returns caused by improper handling are 35% of all returns that results in a profit impact of $70 million and customer dissatisfaction.

Measures of the ProblemProblem found-percent of product returnedProduct return rate for top 3 customers that represent 25 percent of revenue for 1Q2002

CustomerHandling DamageHDIPCBAFWMotorDPPMRateDPPMGoalA35%20%15%12%15%35001000B45%25%13%1%5%2500500C28%50%0%10%10%6000750

Measures of the ProblemThe company sets aside a certain dollar amount to cover warranty related costs for each product it produces and ships. The warranty reserve is presently $3-$4 per product produced.

Actual product returns drive this dollar amount up or down. Current cost for defective product from handling damage is $60 to $70 million. The MBB projects the proper solution can save 70 percent of that amount.

Balanced Scorecards supplied by customer.

PackagingPackaging Development Components & drivesMeasure EnvironmentDocumentationMaterial selectionSQE interfaceASL updatesCorporate Packagings View

Product AssuranceTest StandardsCorp Packaging Test LabCETECDrive qual in package

CMTSupplier Packaging (FoF)Establish and Manage Global Supplier RelationshipsSupport Supply Chain StrategyPrice leverageManage pkg. consumables specs

MarketingGraphics StandardsWW CSO SupportWebsite MaintenanceCustomer interfaceEngineering - R&DMechanical StabilityCore Team support

Manufacturing EngineeringDevelop line ready packaging - FoFESDCleanlinessDistribution/LogisticsCustomer SatisfactionReverse logisticsShipping CostsRegulatory ComplianceDamage/lossOperationsMaterial HandlingPalletization RequirementsOtherXiotechCESProduct Stewardship

Project Objectives

Develop a solution that will do the following:

Reduce product returns due to handling damage from 35% to 5 - 10% within one year [and justify any product packaging cost increase that may accompany the solution].

Create and capture customer value. (Solve other problems perhaps?)

With a breakthrough idea, capitalize on and make packaging, an area normally taken for granted, a differentiator.

DeliverablesReduced product returns

Improved profitability

Increased customer delight

Alternatives to be Considered(As used during the project)New and improved shipping container utilizing the following materials:Extruded polyethylene foam.Rectangular extrusions in its infancyConductive bubble bag.Inadequate cushioning. Corrugated fiberboard.High manufacturing labor costs.Must use ESD bag. Inadequate cushioning.Corrugated with PE foam.High manufacturing labor costs.Must use ESD bag. Excellent cushioning. Vacuum-formed closed-cell cross-High material cost. Must use ESD bag.linked polyolefin foam.Inadequate cushioning. Thermoformed tray w/ foam insets.High labor cost. Excellent cushioning. Thermoformed plastic with shockInadequate cushioning. Material damage evidentdampening buttons. SeashellViscoelastic dampening and material thicknesscombine to provide ESD protection andexcellent cushioning within price target.

Alternatives to be Considered(A better way to measure-select the best solution)

Shock dampeningESDCleanlinessCostLabor costProducibilityClarityTotal ptsPE Foam977694043Cond bubble bag5106655239Corrugated fibreboard3121089033Corrugated w/foam977474038Thermoformed plastic with foam988888958Thermoformed with buttons999988961Thermoformed, hinged, clamshell with ribs1099988962

Project Approach and Criteria for(Evaluating Alternatives-The way it should be done)DMAIC Six Sigma for Operational Excellence approach will be used: (Emphasis on solution-After-Next Principle)DefineMeasureAnalyzeImproveControlEach alternative will be evaluated against the deliverables:

Project Approach and Criteria forEvaluating Alternatives(Questions not developed or answered before project start.)Meets shock and vibration requirements.Does it improve protection of the product?Does it meet the physical requirements?Improve handling of the product. Does it make it easier for the customer to prevent dropping the product.Improved visibility of the productRecyclable, reusable?Stackable?Is it patentable? Can we lock out competitors from obtaining it?

Jan

MarApr

JunJulAugSepOct

Dec

Date of PlanConcept Mgmt Approval Prototype Pilot Run ImplementationInvestigation to Proceed Build and Test Production & CustomersProject Plan - SeaShell Protective Holder(Schedule Slippage)Indicates anticipated date forCompletion of phase

Actual Completion Date

Problems EncounteredInadequate/wrong team members selected.Lack of buy-in from organizations.Poor and flawed definition and quantification of the problem.No cost guideline.Manufacturability not established.

Problems EncounteredPoor timeline and project planning.Customer acceptance not defined.Life cycle analysis not performed.Criteria for measuring and evaluating alternative.What exactly was the deliverable.

RecommendationsTraining for Six Sigma DMAIC concepts for proper project execution should be administered to the group.Development team must devise a plan to seek and obtain involvement from colleagues across the organization. Dont assume the team members know or understand the problem and the plan.

Its very clear and measurable.

If focuses the team on a deficiency.

Clearly communicates the significance of the project to others.

Notice it does not include a guess as to the cause of the deficiency.

It is concise.

It clearly indicates a metric to improve.Specific quantification of the problemUnits of measures and performance measuresManagement will be told the packaging department can help achieve DPPM rates closer to the goal.Must be careful when using only one metric. There is nothing to keep you honest Something else could occur or may be going on some later time or different location. Like the x wiggling the y. And of course, the project will measure material cost to ensure this does not happen.Increases in the warranty reserve indicate a decline in product quality which translates to an increase in Customer Service cost and reduce profit.

It is believed within the company that warranty claims cost the company some $200 million per year.

Handling damage is a constant bullet on BSCs from customers. It is always discussed at the Quality Business Reviews.

Next to nothing has been done about this problem for the last several years.The objective clearly states the goal and address the issue in the problem statement, quantifies the expected performance improvement and identifies an expected timing.

MBBs have projected 70 percent reduction potential

Marketing got of hold of it and turned it into a piece of a meat

Value: Forever customers could not see the product while in the primary container, namely a translucent bag. Visibility of product, bar code scannable, easy to load/unload.

Give customer a compelling reason to choose this product over the competition.The team is tasked with providing a solution that will reduce returns caused by handling damage. As you will see throughout the project many things were done wrong.Always a resource constraint.

Always a challenge.

Difficult for people to understand but other methodologies could initiate from this idea.Always a resource constraint.

Always a challenge.

Difficult for people to understand but other methodologies could initiate from this idea.This is the hard part. Defining what is pass fail when there is not a benchmark.The case study will show that in fact the company did not have one and one had to be developed. Its difficult showing test results against no spec.

This is the hard part. Defining what is pass fail when there is not a benchmark.The case study will show that in fact the company did not have one and one had to be developed.

All projects have slippage. Engineers add buffer and there is always slack. I have chosen this milestone chart from Burgleman which I really like because I hate Gantt charts and I think I speak for most engineers when I say they do not like them either. I like this chart because it will easily show slippage. This chart will clearly show the slippage and why engineers almost always add buffer and and dont account for slack when asked to commit themselves to the critical chain.Its very clear and measurable.

If focuses the team on a deficiency.

Clearly communicates the significance of the project to others.

Notice it does not include a guess as to the cause of the deficiency.

It is concise.

It clearly indicates a metric to improve.Its very clear and measurable.

If focuses the team on a deficiency.

Clearly communicates the significance of the project to others.

Notice it does not include a guess as to the cause of the deficiency.

It is concise.

It clearly indicates a metric to improve.Its very clear and measurable.

If focuses the team on a deficiency.

Clearly communicates the significance of the project to others.

Notice it does not include a guess as to the cause of the deficiency.

It is concise.

It clearly indicates a metric to improve.