Making the Case for Quality

November 2009

Piecing Things Together:

Better Materials Organization Improves Ship Repair Service

by Jeanne Chircop
At a Glance . . .
The U.S. Naval Ship Repair Facility and Japan Regional Maintenance Center (SRF-JRMC), with facilities in Yokosuka and Sasebo, is tasked with keeping the U.S. Seventh Fleet operationally ready at all times. Innovative employees at Sasebos production shop used a lean 5S approach and other quality tools to establish a completely new way of managing their materials inventory. Among other results, the team reduced time spent looking for parts by 80 percent and qualified as finalists in ASQs 2008 International Team Excellence Award process.

Sometimes even a well-oiled machine needs fixing. Despite having applied continuous improvement principles for more than a decade and a half, the Sasebo detachment of the U.S. Naval Ship Repair Facility and Japan Regional Maintenance Center (SRF-JRMC) knew its production shop could benefit from further improvement efforts. Four separate work areas originally served the facilitys different trade groupsmachinery, hull, service, and electrical. This dispersed work environment made it difficult for the production shop to monitor materials in stock, causing redundant and unnecessary orders, which resulted in wasted time, effort, and money. Worse yet, when the four areas were finally consolidated into a single building a couple of years ago, parts ended up in messy stacks in a corner. Sasebo production shop personnel knew they needed to establish order for their materials stockand fast. The entire SRF-JRMC, including the Sasebo detachment, was tasked with fine-tuning all processes prior to the 2008 arrival of U.S.S. George Washington, one of the largest and most sophisticated nuclearpowered supercarriers in the world. Forward deploying U.S.S. George Washington with the remainder of the Seventh Fleet vessels in Japan would require a larger and more sophisticated arrangement for materials storage so that SRF-JRMC could provide timely maintenance and repair when needed. To optimize production capability at Sasebo, the facilitys main inventory would be transferred to the Fleet Industrial Supply Center, Industrial Support Division (FISC ISD), prior to the supercarriers arrival. A kaizen event, or rapid improvement event (RIE), inspired the Sasebo production shop to use a lean 5S approach to cleaning and organizing. Workers would achieve the following results: Reduce the time spent looking for parts by 80 percent Reduce the amount of floor space in their shop devoted to storage racks by 49 percent and to cabinets by 66 percent Recycle some 10,000 pounds of excess and stocked materials Establish a new visual management system that helps employees find materials quickly and easily, resulting in an annual savings of some 1,144 worker-hours Create a new materials ordering system that ensures the facility always has parts on hand when needed

For the longer term, successful management of the inventory would smooth the eventual transition to the FISC ISD.

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Keeping the Seventh Fleet Operationally Ready

SRF-JRMC Yokosuka and its Sasebo detachment are two of about 55 U.S. military facilities in Japan, collectively known as United States Forces Japan (USFJ). The Sasebo detachment was established in 1984, under a cooperative defense labor contract between the United States and Japan created after World War II. The Japanese government provides support for the maintenance of U.S. forces in the region in exchange for U.S. military protection of Japan. The Innovators Team
Team Member Role T. Eguchi K. Eguchi Y. Kakimoto D. Miyazaki M. Nagata T. Tanaka K. Makizumi M. Yamashita H. Kunichida N. Maeda Champion Division Production Shop Head Years of Experience 22 11 11 6 6 11 11 4 22 6

When management called on the shop to identify a rapid improvement event (RIE) as part of the overall lean improvement in preparation for the U.S.S. George Washington, the production personnel easily selected a focus on materials. The inventory issue cut across all four of the shops service areas and also caused delays to other service areas at Sasebo. Improvement in materials handling would benefit all internal and external stakeholders. A team named The Innovators conducted the shops RIE. Led by a lean champion and three Lean Six Sigma Green Belts, the 10-member team immediately invited SRF-JRMC and FISC ISD leadership to participate in meetings. Involving these key external stakeholders throughout the RIE would help ensure successful implementation of the changes that would ultimately be proposed. Team members were chosen for their knowledge of quality improvement techniques and concepts, including use of evaluation matrices, the plan-do-check-act (PDCA) cycle, and team-building efforts. To support the SRF-JRMC mission of Keeping the U.S. Seventh Fleet Operationally Ready, The Innovators knew they needed to create a system that would maximize the production shops ability to respond to emergent and emergency repair requirements. At the heart of this goal was the need to create a process that guaranteed strict inventory management and availability of all repair materials. The Innovators actually set five goals:

Green Belt Machinery Group Green Belt Hull Group Green Belt Service Group Member Member Member Member Member Member Material Controller Service Group Machinery Group Electrical Group FISD ISD Hull Group

Located in southwestern Japan, on the island of Kyushu in Nagasaki Prefecture, the Sasebo detachment permanently services six ships of the U.S. Seventh Fleet, the largest U.S. numbered fleet. Around half of the worlds population lives within the Seventh Fleets area of responsibility, which encompasses more than 48 million square miles. Approximately 300 employees, most of whom are Japanese, tenance and repair operations for the U.S. Seventh conduct main Fleet at the Sasebo facility. They have one goal: to keep the U.S. Seventh Fleet operationally ready.

Establish a materials ordering system Reduce the shops number of racks and bins Reduce time needed to search for materials Turn in excess materials to the bases recycling center Improve safety

Team members viewed meeting these goals as benefitting stakeholders by reducing repair time, workload, and costs. A new inventory system would also improve the safety and work capacity of the production shop.

Disorganization Meant Delay

SRF-JRMC Sasebo conducts two types of repair work: routine maintenance and emergent repair work, some of which is on an emergency basis. Considering that much of the repair materials used at SRF-JRMC have to be ordered from supply centers in the United States and could take quite a while to receive, the Sasebo production shop had to secure and maintain enough parts and consumables to be able to respond to emergent repair work. Not fully knowing what materials were in stock posed a real problem for the production shop. The disorganized inventory caused occasional service delays and, worse, safety hazards. A messy shop floor is unsafe for shop workers, and a lack of needed parts means emergency ship repairs cannot be performed in a timely manner. With a nuclear-powered supercarrier occasionally coming to port, the shop simply couldnt afford to be unprepared.

Creating Standard Operating Procedures

The team identified the first step necessary for improving inventory consolidation and management to be the establishment of a standard for materials organization. Because SRF-JMRC constantly collects data for annual executive planning sessions, the team had detailed information and metrics readily available to identify what the shop was doing right, as well as areas that needed more focus and attention. The team followed a step-by-step process for improvement: analyzing the as is status of the inventory storage site, identifying a goal, and setting the datum point for material. The team focused on a selected restricted availability (SRA) to develop the criteria for identifying and sorting materials. In simple terms, an SRA is second-level ship maintenance. The Navy has a comprehensive life cycle maintenance plan for each

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of its vessels. Routine maintenance is typically conducted by a ships own crew. The next level of maintenance is the SRA, when a ship is dry-docked and worked on by shipyard repair experts. At Sasebo, SRAs are conducted in a nine-week cycle. Obviously, this limits the amount of time the shipyard crew has to make all necessary repairs, and so it is imperative that the facility maintains all materials needed for a routine SRA. By analyzing previous orders, The Innovators were able to identify the types and quantities of routine materials required for one nine-week SRA. These data became the basis for identifying and sorting materials. The next step was to develop an efficient plan for sorting and managing the materials. The team organized goals into three phases: Phase ISort and set in order the current storage space (the lean 2S approach) Phase IIDevelop a visual management system (VSM) for inventory Phase IIIStandardize inventory management

establishing a standardized ordering system (OS) for materials. Initially, The Innovators focused on the category of fastenersbolts, nuts, and washersbecause all trade groups routinely use fasteners. A standardized OS for fasteners would eliminate duplicate orders, incorrect quantities ordered, and out-of-stock situations. The first step in establishing an effective OS was to create basic criteria: Maximum number of parts to stock (high limit) When to order parts (low limit) Number of parts to order New ordering process

Phase I
In order to conduct 2S organization of the storage area, the team analyzed SRA data over the previous two years. The production shop would keep only enough stock for one SRA cycle. Some 10,000 pounds of excess and stocked materials were taken to the Defense Reutilization Marketing Office (DRMO) on base.

The team identified maximum quantities by recalling the data on how many of each part are needed for one SRA. Determining when and how many parts to order was more challenging, as it typically takes a long time to receive fasteners from overseas and it is too late to order materials once they are depleted. Using the technique of brainstorming for suggestions, the team decided to place an order whenever stocks drop below 50 percent of the target balance (low limit). They suggested ordering half of the maximum limit each time they ordered. The next step was to establish a plan for ordering. The team had to establish: Who initiates material requests? When should material requests be initiated? Who actually orders? When do they actually order? Who receives the ordered materials? Who stocks the materials once received?

Phase II

The team next tackled Phase II, comprising a lean 5S program focusing on establishing visual order of the storage area. Steps to a 5S program are: Sortgroup together all like products Set in orderidentify and arrange everything in a work area Shineestablish a regular cleaning and maintenance routine Standardizesimplify the organization process and make it easy to maintain Sustainmaintain what has been accomplished

After discussions with key stakeholders, including SRF-JMRC and FISC ISD management, the team identified responsibilities and sequence of steps according to the flow chart in Figure 1. The ordering and receiving processes are shown in Figures 2 and 3. For the proposed system to work, production shop workers would have to be able to easily identify when it was time to order materials and turn in requests without difficulty. The Innovators proposed using an immovable insert to divide parts containers in half. Equal amounts of materials would be placed in each half of the container, and materials would be reordered when one side of the container is depleted.

Establishing a visual management system, the standardize step in the process, increases efficiency by enabling servicers to locate materials needed for repair easily and consistently. An effective VSM increases overall productivity by reducing worker-hours and process time. The Sasebo production shop implemented an effective VSM by arranging materials according to size and type. Storage containers were clearly labeled, and a map was posted indicating the location of each material. The system enabled workers to find general material locations quickly by referring to the map and then easily locate specific parts by referring to labels on the containers.

Figure 1 Flowchart of material ordering system

Materials refill Material into the container (Leaders of the groups) Deliver (Leaders of the groups) Materials decrease Report (Each group of workers) Request to order (Each group of workers) Order (Each supervisor)

Phase III
The final step in a 5S program is to establish a system for sustaining accomplishments. For the Sasebo production shop, this step meant

Receive (Shop material controller)

The Supply Center in the United States

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The team then made data cards for order requests and placed them in each container. Each data card, called an order notification tag, would show size, type, order number, location, and quantity to be ordered (see Figure 4). Once the tag is removed from the bin, a sticker saying ordered is revealed inside the bin, preventing the mistake of double ordering. Workers simply drop the tags into an Order Post box, which is constantly checked by supervisors. The supervisors remove the tags, sign their approval and place the orders, and then hang the original tags on a Waiting Board listing ordering date. Under the system, everyone in the shop can check the board to see the date and quantity of all materials ordered. Once new parts arrive, the shops material controller tags them and places them in a designated area for pick up by group leaders. The group leaders place the new materials in their appropriate containers as indicated on the tags.

Other tangible benefits include increased productivity, more efficient workspace, waste reduction, a safer environment for workers, and cost reduction.

Increased Productivity
Reorganization of the storage area significantly reduced the amount of time workers have to search for materials. Before the lean activity, average search time was 150 seconds; afterward, it is a mere 30 secondsa reduction of 80 percent. Considering130 workers search for materials every day, that translates into an annual reduction of some 1,144 worker-hours.

More Efficient Workspace

Through better management of materials inventory, the shop created a more efficient workspace. Before the lean 5S effort, the shop had six racks and 22 cabinets; afterward, it needed only three racks and eight cabinets. The total space occupied by racks started out at 535.5 square feet and was reduced to 257.5 square feet: a reduction of 44 percent. Cabinets used to take up 267.75 square feet but required only 93.6 square feet afterwarda reduction of 66 percent. Prior to the improvement effort, workers traveled an average distance of 23.62 feet to find parts; this distance was reduced to 10.49 feet, which translates into a reduction of 853.2 miles over the course of a year for 130 workersequivalent to the distance between Houston, TX, and Denver, CO.

Getting the Job Done

The most obvious benefit of the production shops lean activity is that workers consistently have the parts they need to conduct repairs. By being ready at all times for emergent repair work on any carrier, the shop is able to fully support the facilitys mission.

Figure 2 Ordering process

Each group of workers Each supervisor Check post Collect tags Create material order form Submit the form to production shop head Hang tag on material waiting board

Pick up bolts No

Waste Reduction
The obvious waste reduction in this effort was the elimination of 10,000 pounds of excess stocked material. The effort also eliminated space wasted on unnecessary storage and time wasted by workers sorting through disorganized inventory, as specified earlier.

Last bolt? Yes

Continue work

Remove tag Drop tag into post

Safer Environment
An organized, efficient environment is a safer place for workers. For the Sasebo production shop, the dangers inherent in unorganized stacks of partsprimarily that they might topple overwas eliminated.

Figure 3 Receiving process

Shop material controller Receive material Put material on designated spot Notify leader of the groups Load containers Return tag to container Leader of the groups

Cost Reduction
Conducting lean improvement cost the production shop only labor hours, and work was done during low workload periods. Cost savings was achieved by reducing worker-hours wasted on searching for parts and time wasted on delays. Cost avoidance was achieved by preventing duplicate and unnecessary orders for materials.

Figure 4 The order notification tag

National stock number Material name Order quantity Location

A Fully Supported Effort

The Innovators team initially expected some resistance from the FISC ISD against the new inventory system, reasoning that having to control materials could generate more work for the facility. By including a representative from FISC ISD as a team

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member, however, the facility fully supported the new system. Specifically, the elimination of a large amount of excess material actually drastically minimized additional work for FISC ISD once the inventory transferred over. The Innovators also enjoyed the full support of their own management. All Sasebo lean teams were required to report the results and sustaining plans of their activities to the facilitys executive steering committee at a monthly out-briefing. Through this structured session, the senior managers recognized each teams accomplishments and accepted their recommendations. They provided necessary support by removing obstacles that could prevent successful implementation of the teams recommended changes. The Innovators shared their successful strategy with members of the international community as semifinalists of the 2008 ASQ International Team Excellence Award competition.

For More Information

More case studies featuring the U.S. Naval Ship Repair Facility and Japan Regional Maintenance Center (SRFJRMC) are available at www.asq.org/economic-case/markets/ naval-case-studies.html. For more information on SRF-JRMC Detachment Sasebo, visit http://www.srf.navy.mil/. For more information on lean tools and methods, visit the ASQ Knowledge Center at www.asq.org/knowledge-center. Learn more about the ASQ International Team Excellence Award by visiting http://wcqi.asq.org/team-competition/.

About the Author Jeanne Chircop has been helping organizations share their successes for more than 20 years. She has written about quality efforts in the education, manufacturing, and natural resources industries. She holds a masters degree in journalism and resides in the Washington, DC, metropolitan area.

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