Where Innovation Is Tradition

Project #3: Production Cost Savingsat Washington Post

SYST 798/OR 680Progress Report #2

31 March 2011

Thomas KuklinskiTimothy Smith

Ling WuVladimir Zivkovic

Where Innovation Is Tradition

Overview

• Clients• Problem Statement• Earned Value Management• Task Breakdown Structure and Status• Methodology/Technical Approach• Issues/Concerns• Way Forward• Questions

Where Innovation Is Tradition

Clients

• Kent Renk, Materials Handling Foreman, Washington Post, renkk@washpost.com,

703-916-2471 (office), 703-916-2471(cell)

• Kim Hammett, Assistant Superintendent for Materials Handling, hammettk@washpost.com,

703-916-2447 (office), 703-869-2463 (cell)

Where Innovation Is Tradition

Problem Statement• Background

• Fall of 2010 GMU students did initial static analysis of the Washington Post’s Shipping and Receiving Department in Springfield, VA

• They conducted a process evaluation, an analysis of labor, and an analysis of routes which resulted in three groups of recommendations:• Labor cuts (implemented)• Route simplifications• Improved data tracking

• Problem Statement• Our objective will be to maximize the efficiency of the Washington Post’s materials

handling system at their four work centers (i.e. Shipping and Receiving Department) in an effort to generate cost savings to the overall operation

• We would like to bring to life and build upon the static analysis done by previous group in a dynamic simulation model of the helper component of the work centers

• Stakeholders• Materials Handling Foreman (Kent Renk)

Where Innovation Is Tradition

Task Breakdown Structure and Status

Where Innovation Is Tradition

Earned Value Management

1/23/2

011

1/27/2

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1/31/2

011

2/4/20

11

2/8/20

11

2/12/2

011

2/16/2

011

2/20/201

1

2/24/201

1

2/28/2

011

3/4/20

11

3/8/20

11

3/12/2

011

3/16/201

1

3/20/2

011

3/24/2

011

3/28/2

011

4/1/20

11

4/5/20

11

4/9/20

11

4/13/2

011

4/17/2

011

4/21/2

011

4/25/2

011

4/29/2

011

0

100

200

300

400

500

600

700 Washington Post Project Earned Value

Earned Value (BCWP)Actual Cost (ACWP)Planned Value (BCWS)

Hou

rs

Where Innovation Is Tradition

Methodology/Technical Approach• Process Analysis (completed)

• Build upon last group’s work done on process evaluation• Develop a complete and detailed qualitative understanding of how the Shipping and

Receiving Department operates

• Data Collection and Analysis (in progress)• Collect data from both the materials tracking system (i.e. MTC) and subject matter

experts• Obtain descriptive statistics on each component of the system

• Model Selection and Construction (in progress)• Evaluate model alternatives based on quantitative/qualitative data and client needs• Construct and test model (e.g. turn system processes into Arena modules)

• Output Analysis (not started)• Evaluate output in terms of cost and throughput• Iterate

Where Innovation Is Tradition

Process Analysis

Where Innovation Is Tradition

Process Analysis (actual)Daily Insert

Sunday Packaging

Racks

Trucks Materials Handling

2a. Daily Insert Ads

1. Daily Insert Ads & Sunday Packaging

2a. Sunday Packaging

Run of Press

2c. Jackets

3. Completed Jackets

4. Collated Sunday Packaging

Where Innovation Is Tradition

Process Analysis (scope)Daily Insert

Sunday Packaging

Racks

Materials Handling

Input: Sunday Packaging

Output: Completed Jackets

Output: Collated Sunday PackagingRun of Press

Out

put:

Hea

dshe

ets

Input: Daily

Insert A

ds

Where Innovation Is Tradition

Data Collection and Analysis • Labor data

• Obtained labor markup data for this period • Broken down by work center, day, shift, and role

• Assigned helpers within the work centers to specific routes so we know which moves they would be responsible for• This required splitting helpers assigned to specific machines into subsets

(e.g. Collator 4)

Sunday Packaging: Monday  1st Shift (6:30am-2:00pm) 2nd Shift (2:15pm-9:45pm) 3rd Shift (10:00pm-5:30am)Collator 1 2 2 0Collator 2 0 0 0Collator 3 2 2 0Collator 4 3 3 3Total 7 7 3

Where Innovation Is Tradition

Data Collection and Analysis • Route data

• Obtained Summary Report for February 7-12 created by MTC• Data obtained for a “normal” week of work• Contains pallet moves for all materials throughout the system

• Mapped all of the routes to specific areas within our system so that we know how everything interacts• Client assisted with determining which routes were not relevant• This all informed our Process Analysis understanding

• Obtained descriptive statistics on route times for model input, specifically route times

ISSUE DATE PALLET ID CLASS DESCRIPTION LOCATION DATE / TIME USER ID LOCATION DATE / TIME

06/22/2008 R555147 CONSUMABLE Stretch wrap, clear HAARHOFFDS RD0101/06/2011

12:48:45 PM

06/22/2008 R555147 CONSUMABLE Stretch wrap, clear RD0101/06/2011

01:14:49 PM MACKLIND H52A01/06/2011

01:15:44 PM

06/22/2008 R555147 CONSUMABLE Stretch wrap, clear H52A02/07/2011

05:30:33 PM KUBEAG C4CON02/07/2011

05:30:38 PM

Where Innovation Is Tradition

Route Time Statistics• Data options on route duration time• Use estimated data from sponsor (max, min,

mean) for a triangular distribution• Sponsor recommended because of “bad” MTC data

• Use Arena Input Analyzer to find the best fit distribution based on MTC sample of “good” MTC data • Very small sample size

• Looked at both to obtain conclusive results

Where Innovation Is Tradition

Arena’s Input Analyzer

Where Innovation Is Tradition

Arena Input Analyzer Results

• Production Data• Missing production data• Invalid production data• Inconclusive results for route times

• *Estimated client SME data• Client recommended this approach for route times

Where Innovation Is Tradition

Model Selection and Construction• Discussion with client and additional system understanding has allowed us

to settle with an Arena simulation model• It is very important for the client to be able to use the model to

forecast the impact of different labor markups on production targets for both daily inserts and Sunday packaging• Phase 1 - Develop an Arena model that allows the client to play

with “what-if” labor markups to hit production targets (required)• Phase 2 – Add on an optimization engine that determines labor

markups at minimal cost to the client to hit production targets (desired)

• Based on Process and Data Analysis, an Arena model has been started• Architecture, labor markups by day/shift, and route time & assignments finished• Arrival processes by day/shift, internal business logic, and production targets still being

analyzed

Where Innovation Is Tradition

Model Selection and Construction (actual)

C1 Machine

S1 MachineDockDock

Run of Press

U(2,5)U

(4,5

)

U(6,8)Normal(2, 4)

EXP(10)

Raw Materials

Jack

ets

EXP(5)

Monday, Shift 1

Production Targets

Where Innovation Is Tradition

Model Selection and Construction (scope)

C1HS

S1HS

DockRack

ROP

U(2,5)

U(6,8)EXP(5)

Raw Materials Monday, Shift 1

Production Targets

Jackets

C1PZ

C1PZ

EXP(5)

EXP(5)

Where Innovation Is Tradition

Model Selection and Construction (Arena)

Where Innovation Is Tradition

Issues/Concerns• Working with sponsor to obtain accurate business

rules to apply to model components• Currently there is no clearly defined business rules on the

production processes at the work center• Depends on sponsor’s ability to articulate, analyze, and abstract

general business rules of the production processes

• Packaging the Arena simulation model• Graphical User Interface• Model for each day vs. Large dynamic model

Where Innovation Is Tradition

Way Forward• Data Collection and Analysis

• Arrival Process Distributions (Input Analyzer)– Determine raw material arrival processes from the rack– Determine machine output arrival process (e.g. C1, S1, etc.)

• We are waiting for all of this data to be provided• Modeling

• Determine internal business rules– Rack to C1 vs. C2 vs. C3 vs. C4– S1 to Z1 vs. Z2 vs. Z3– Etc.

• Look into production targets• Begin identifying output analysis components to investigate

Where Innovation Is Tradition

Questions?Washington Post Project - Web site