The A Team QSM 566 Final MBP Presentation Rev 19 AW

1 QSM566 10062016 © 2016 The National Graduate School of Quality Management 1

QSM 566 - COHORT 1015 MBP III

The A TeamAntoine Artis

Alicia Steward

Alona Wood

Jelani A Nixon

6 OCT 2016

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2 QSM566 10062016 © 2016 The National Graduate School of Quality Management

Project Team

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Project Champion: Van Rogers, Continuous Improvement Manager at TE Connectivity

Guiding Coalition: Marie Manzo, Alpha Manufacturing Team Leader

Stakeholders: TE Connectivity

Project Team: 1) Antoine Artis (QA Test Technician at TE Connectivity) 2) Alicia Steward 3) Alona Wood 4) Jelani Nixon


Problem Statement (D)

TE Connectivity in Fairview, NC manufactures electrical relays using 18 sub-assemblies for the Alpha relay production line. Prior to 2015, the company produced more relays than it sold, which resulted in $1,648,106.43 of excess inventory and 707 square feet in annual storage space for the excess inventory. Our team will evaluate this issue and provide a comprehensive solution plan to significantly reduce 1) future over production and 2) storage for excess inventory.

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SIPOC Diagram (D)

•Vendors•Facility (Warehouse, Employees)•Transportation Logistics (FedEx)•Utility Companies•Software developers

•Sales orders•Materials•Electricity•Employees

•Subassemblies•Completed relays•Shipment•Customer receives relays

•Defense Contractors•Automotive •Energy•Industrial Equipment•Consumer Electronics•Aerospace

Sales order received; sent to production planners & time line is created

Planners send order to material handlers/ parts are gathered

Parts are sent to production line; relays assembled, tested & sent to QA

QA inspects & certifies relays, sent to shipping dept.

Shipping dept. packages relays and sends to the customer

SUPPLIERS

INPUTS

INPUTS PROCESS OUTPUTS CUSTOMERS

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Process Map (D)

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Customer Requirements Matrix (M)

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CHARACTERISTICS IMPORTANCE PERFORMANCE GAP TOTAL

TECHNICAL ACCURACY 5 4 1 5

PRODUCTION EFFICIENCY 3 1 2 6

RELIABILITY 5 4 1 5


Data Collection Plan (M)Data to be Collected

Stratification/Grouping

NeedsOp Def? Sample Size Source &

LocationWhen

collected

Primary Responsible MBP Member

Amount of relays/sub-assemblies produced,

prices

2015, Oct.15’- monthly

Yes* 2 yrs Alpha Admin Database/

Marie

Oct. 2015 Antoine

Amount of storage space

used/sq.ft

2015, Oct.15’- monthly

Yes* 2 yrs Alpha Admin Database/

Marie

Oct. 2015 Antoine

Number of units needed for production

Production Planner/

Mfg. Team Leader

No 1 department Alpha Admin Database/

Marie

2015-Present

Antoine

* Backup Slides7


Data Collection Plan (M)

51164669

4309 43094561

5768

5165

4405 4405

5057

0

1000

2000

3000

4000

5000

6000

7000

Dec 2015' Dec 2015'-13 Jan 16' 14 Jan-22 Mar 16' 23 Mar-10 May 16' 11 May-24 May 16'

Alpha Sub-Assemblies Count

Base Amount Amount Stored on Production Floor

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SUBASSEMBLY OVERPRODUCTION &

STORAGE COSTS

MACHINES

PEOPLE

MATERIALSENVIRONMENT

SYSTEMS

Tornado destroying building/equipment Defective supplies

received

Outdated equipment

Severe storms knocking out power

Cheaper materials

Orders placed in bulk

METHODS

Equipment not maintained properly

Inconsistency w/production in relation to demand

Configuration of Kanban cards

Substandard trainingPoor communication throughout organization

Low morale/Lack of motivation

Fear of speaking out

Substandard procedures

Improper use of Kanban system

Ineffective reporting/documentation

PEOPLESYSTEMS

Fishbone Diagram (M)

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Pareto Chart (A)

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A-Team Alignment with TE Connectivity Values Integrity - We must demand of ourselves and of each other the highest standards of individual and

corporate integrity.– As a result of our team evaluating the production line processes, the A-Team will ensure that the

units will be assembled at the highest quality rate possible and the number of units produced will be decreased to only the amount ordered.

Accountability - We create an operating discipline of continuous improvement that is an integral part of our culture.

– The A-Team will identify the root causes of the overproduction.

Teamwork - We foster an environment that encourages innovation, creativity, excellence and results through teamwork.

– The A-Team will work together using our diverse backgrounds and talents in order to successfully meet TE Connectivity goals as well as our own, as a team and as individuals. The A-Team will analyze how schedulers, material handlers and the production line work together in order to assist with creating efficiencies.

Innovation - We encourage, expect and value creativity, openness to change and fresh approaches.– The A-Team will use our fresh perspective of the production process and offer calculated

suggestions that will better the company as a whole.

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Cost of Poor Quality (A) Type of Costs At the beginning of 2015, there were 311,709 extra

subassemblies. The average cost of a subassembly is $5.27. (311,709 excess sub-assemblies @ $5.27 each = $1,642,706).

Comparable storage (707 sq. ft) in the local area =

$5400 ($450 a month*12 = $5,400)

Total Cost is $1,648,206.00 Cost Drivers Number of relays produced by greater than the demand

The additional relays produced increase storage space needed/ material used/labor hours

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Recommendations (A)

The A-Team recommends that TE Connectivity utilizes the excess sub-assemblies to reduce the amount of production, then increase production as needed dependent upon sales to maintain equilibrium.

We also recommend that a procedure be established to ensure that the Kanban cards are reflecting actual sales, to be performed on a bi-monthly basis.

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Future State Process Map (A)

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Our process map does not need to be updated due to the fact that the process changes occur within certain points, as circled here.


Theory Of Constraints (A)Main Constraints- Production planners correctly identifying demand signal- Kanban cards not in sync with demand signal- Material handler/batch handling during sub-assembly production

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Secondary Benchmarking Planning (A)

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Potential Topics for Benchmarking

What data do we have suggesting this is important?

What secondary sources might we

use?

What search words would be helpful in finding the information?

Who on the team will investigate?

Overproduction Root cause of MBP

Manufacturer’s best practices

Variation reduction, waste prevention, fluctuating demands

Alicia

Kanban System Root cause of MBP

Companies that utilize systems

Kanban, pull system

Alona

Automotive Production Line

MBP’s product uses assembly line

Search engines, books, articles

Automotive production line, assembly line

Jelani

Efficiency similar products produced, and have assembly lines

Search engines, articles, best practices

Production, financials, data, processes

Antoine


Secondary Benchmarking Process (A)

Panasonic Competitive TelephoneSurvey

Reserved2

High3

High3

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Toyota Generic TelephoneSurvey

High3

High3

High 3

9

Lucent Technologies

Functional Questionnaire High3

High3

High3

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Potential Partners

Type of Bench

markingMethodology

Level of Cooperation

Expected

Relevance Expected

Level of Expected

Breakthrough Total

• Internal • Competitive • Functional • Generic

• Survey • Questionnaire • Telephone • Focus Group• Site Visit

• High 3• Reserved 2• Low 1

• High 3• Some 2• Low 1

• Innovative 3• Useful 2• Lagging 1

• Sum Cooperation/ Relevance & Breakthrough

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Implementation Strategy (I)

TE Connectivity’s two part strategy approach to matching production to the demand signal:

– First component: Reducing production in fiscal year 2015 and utilizing excess sub-assembly inventory

– Second component: Updating the in-house Kanban system for the fiscal year 2016 so the demand signal matched the production output, resulting in inventory maintained at appropriate levels (excess inventory eliminated)

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Implementation Strategy (I)

Date Inspected

Amount Stored (inventory Amount)

Amount Sold

Difference Staff Assigned

Jan 2015 311,709 - +311,709 Antoine/Maria/Van

Jan–May ‘15 213,338 128,558 +84,780 Antoine/Maria/Van

May - Oct ’15 8,558 247,000 -238,442 Antoine/Maria/Van

Dec 2015 5768 5116 +652 Antoine/Maria/Van

Dec ‘15- 13 Jan ’16

5165 4669 +496 Antoine/Maria/Van

14 Jan ‘16- 22 Mar ‘16


23 Mar ‘16- 10 May ‘16


11 May ‘16- 24 May ‘16


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TE Connectivity began utilizing the stored extra sub-assemblies in fiscal year 2015. A procedure where staff assigned checked the Kanban card

against the demand system was created, shown below:


Cost of Implementation Strategy (I)

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Antoine/Marie/Van: Assess the required demand of

sub-assemblies to make Kanban adjustments

(20 mins)______________________________

1 man hr per meeting expended

5 meetings to date= 5 man hrs total

$260,000 Budget / 2080 hrs= $125/hr

$125/hr * 5 man hrs= $625.00

Antoine:Adjust Kanban card quantities to meet

required demands (20 mins)

Adjust labels to read correct amounts (1 hr)

Obtain final count of subassemblies (10 mins)

Document of results (10 mins)

________________________________

1.66 man hrs per meeting expended5 meetings to date= 8.3 man hrs total$60,000 Budget / 2080hrs = $28.84/hr

$28.84/hr * 8.3 man hrs = $239.37*The cost to implement this

strategy will be $864.37


ROI

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ROI ROI 2015 – 2016 Jan 2016 – May 2016

COPQ - Excess Inventory $1,648,206 0

Expense ($864.37) $0

Start Inventory 311,709 5768

End Inventory 5768 4561

Inventory Reduction 305,941 1207

Cost of Sub-Assembly $5.27 $5.27

Benefit of Inventory reduction $1,612,309.07 $6,360.89

Net Benefit $1,611,444.70 $6,360.89

Total Benefit = $1,617,805.59


Payback

PaybackPayback 2015 2016 Total

Revenues $1,612,309.07 $6,360.89 $1,618,669.96

Total Cost $864.37 $0 $864.37

Net $1,611,444.70 $6,360.89 $1,617,805.59

Total Benefit = $1,617,805.59/16 = $101,112.85 per month

*Implementation/Payback complete within first month*


Monitoring and Control Plan (C)

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Tangible and Intangible Results (C) Tangible-TE Connectivity's Alpha line will produce 20% less of what they produced before during a set time period, eliminating waste.

-TE Connectivity has educated workers to update the Kanban system according to the supply demand signal.

Intangible-TE Connectivity’s cultural is changing as evidenced by employees becoming more aware and proactive in production errors.

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Lessons LearnedAs a team we learned about working together and for one

another. We learned that not all situations require all of the tools we

have learned, but might take a combination of tools and principles to yield the desired results and for continuous improvement.

We learned that the company that you are helping may not see you as help and reject the information and/or the suggestions you offer.

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Senior Champion/Sponsor CommentsMarie Manzo, TE Connectivity Alpha Manufacturing Team Leader:Noticeable change in the turnaround times, quantities of the sub-assembly production, and more floor space now available. The major factor supporting these changes were the sub-assembly quantity modifications in conjunction with the Kanban system (Kanban Supermarket).The area of improvement for the project is the amount of time between the Project Champion implementing modifications, to when the changes take place. Some of the sub-assembly production equipment has manual features and adapters which need to be modified.Overall, the product did align with the company expectations and goals, and was a success.

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27 QSM566 10062016 © 2016 The National Graduate School of Quality Management 27

Backup Slides

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Operational Definitions

What defines the term “overproduction” as it relates to monthly quotas?Overproduction refers to the amount of subassemblies

that are left over after all relays ordered have been produced and shipped to the customer.

What defines the term “base amount”?

The base amount refers to the amount of sub-assemblies the Kanban cards allow to circulate through the system.

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Current Value Stream Map

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Future Value Stream Map

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QSM 566 – COHORT 1015

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Documents

The A Team QSM 566 Final MBP Presentation Rev 19 AW