Jared Amato - Six Sigma Green Belt Reporting
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Transcript of Jared Amato - Six Sigma Green Belt Reporting
Travel ReductionJared D. Amato | Green Belt Reporting
Executive Summary
Our goal is to ship every order complete within 2 work days. We have found that travel time in the warehouse accounts for 28% of all failures.
Project Team Roles and Responsibilities
Jared Amato Operations
Manager
Anni XXXXX Data Collection
Clinton XXXX Simulation
Victor XXXXX Process
Operator
Jose XXXXX Process
Operator
Problem Statement
The Ideal State
Ship all orders complete within 2 days of confirmation from customer, utilizing no more that 8 man hours a day per every 2 FTE
The State Before the Project
February 2015 – April 2015 | 5726 orders | 64 working days | 89 orders per day.
Average Distance Traveled 285 feet per order.
4.8 miles a day.
The consequence if we had done nothing
Continuing to have 15% of shipments late
No time to QC orders
Not giving the staff adequate time to do inbound QC
Not having proper time to cycle count
Project Proposal
Customer Requirements
2 day order ship complete
100% Accuracy
Scope of Project
Reducing order fulfillment travel distance
Warehouse item classification
Objectives
Improve our order turn time to meet customer requirements of shipping complete within 2 days.
Improve our accuracy
Efficiency Improvement
Critical Y – Order Cycle Time
Critical Y - Accuracy
Project Proposal Critical Y – Order Cycle Time
85% of orders ship on time (4867 orders)
15% were late (859)
78 82
107
165
189
238
0
50
100
150
200
250
1
Late orders by reason
Credit Shipping Order Processing QC Build Time Pulling
Project Proposal Critical Y – Order Cycle Time
3
3.5
4
4.5
5
5.5
6
6.5
1 2 3 4 5 6 7 8 9 10 11 12 13 141516 17 18192021222324252627282930 31 32 33 343536 37 383940414243444546474849505152535455565758596061626364
Xi Chart Distance in miles per day
Distance UCL LCL CL
40
90
140
190
1 2 3 4 5 6 7 8 9 10 11 12 13 141516 17 18192021222324252627282930 31 32 33 343536 37 383940414243444546474849505152535455565758596061626364
Xi Chart orders per day
Orders UCL LCL CL
Project Proposal Critical Y – Order Cycle Time
Project Proposal
Critical Y – Order Cycle Time
Project Proposal Critical Y – Accuracy
Proposed State
Project Proposal
Critical Y – Pareto Top Items
Move the 43 items closer to theshipping dock
$13,515,974.20
$2,520,775.02
$848,382.61
$-
$2,000,000.00
$4,000,000.00
$6,000,000.00
$8,000,000.00
$10,000,000.00
$12,000,000.00
$14,000,000.00
$16,000,000.00
$18,000,000.00
Dollar Value
Inventory Analysis
80% = 43 items 15% = 79 items 5% = 370 items
Protocol and tools
Findings Summary of raw data –
Findings
Summary of raw data -
1
2
3
4
5
6
7
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87
Xi Chart Distance in miles per day
Distance UCL LCL CL
40
90
140
190
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87
Xi Chart orders per day
Orders UCL LCL CL
Findings Summary of raw data –
Findings Summary of raw data –
78 82107
165189
238
0
50
100
150
200
250
1
Late orders by reason
Credit Shipping Order Processing QC Build Time Pulling
21 23
33
5155
28
0
10
20
30
40
50
60
1
Late orders by reason
Credit Shipping Order Processing QC Build Time Pulling
Before After
Success Factors Reduced Travel Time by 56%
Reduced restocking / put away time (Non validated)
Completed within budget
Excluding light retrofit (Energy Trust Rebate not applied)
Delivered on time (7 days early)
Reduced warehouse foot print by 40%
Average Miles Before 4.82
Average Miles After 2.71
Mile Reduction 2.10
Percent Reduction 56%
Hourly Wages 17.82$ Savings
Weekly Income 712.80$ 401.54$ Weekly Income
Monthly 3,086.42$ 1,738.66$ Monthly
Yearly 37,037.09$ 20,863.87$ Yearly
Control
Part of our new SOP for end of month reporting is running the top products list which outlines product sales and quantity. This will show us if something moves up or down in the ranking of top products. This will flag us to evaluate moving items around so we don’t loose the momentum of the savings.
Benefits
Financial – Cash flow Analysis
Project five year savings - $87,365
Payback Period – End of year one
IRR – 154%
NPV - $32,330
Invoices Paid Sooner
Benefits
Non-financial
Customer Satisfaction
Employee Morale
Marketing
Recommendations
Conclusions to date – Since I only have data for the one month it is hard to speculate but I think the success will still be realized in the coming months.
Learning to date – the big take away are the next two things to tackle (QC and Build Time) Before the project the top 3 accounted for 695 of late deliveries.
Define
Project Prioritization – We have quite a few projects that we need to address. Delivery Performance was the one we all could agree goes to the root of our mission.
Define
Kano Model – We debated the three phases a lot. Everyone had their own thought of what was basic, performance and excitement. At a point in our history we were the only company with a two day turn time. Now it is expected.
Training No System
Too Much Walking
Procedures Spread Out
No Expert
No accountability
Locations to small
No accountability Not having all the tools Not having all the product in one place
Fast moving in the back of the warehouse
Delivery Failures(Y)
Management Man Method
Measurement Machine Material
Cause
Cause
Cause
Cause
Cause
Cause
Cause
Cause CauseCause
Cause
Cause
Cause
Measure
78 82
107
165
189
238
0
50
100
150
200
250
1
Late orders by reason
Credit Shipping Order Processing QC Build Time Pulling
Analyze
3
3.5
4
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5
5.5
6
6.5
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63
Xi Chart Distance in miles per day
Distance UCL LCL CL
Improve
Cashflow Cumulative Savings
Investment (10,000.00)$ (10,000.00)$
Savings year 1 13,909.28$ 3,909.28$ Earnings year 1
Net Savings year 2 20,863.87$ 24,773.15$ Earnings year 2
Net Savings year 3 20,863.87$ 45,637.02$ Earnings year 3
Process step Potential failure mode Potential failure effects
S
E
V
Potential causes
O
C
C
Current process controls
D
E
T
R
P
N
Actions recommendedResponsibility (target
date)Actions taken
N
e
w
S
E
V
N
e
w
O
C
C
N
e
w
D
E
T
N
e
w
R
P
N
Pulling Orders
Fail to meet 2 day
delivery
performance
Low customer
satisfation7 Travel Distance 8 Additional People 8 448 ABC Analysis Jared
Warehouse
Layout3 5 4 60
Control
SOP’s identifying when to run Top Products. Validated monthly
Conclusions
The next phase in this would be a software upgrade where the order is packed, QC’dand shipped the moment it is picked.