A Case Study on Improving Productivity

by Reducing Operation Cost as Six Sigma

Process Improvement

Keywords: DMAIC, FMEA, KPI Dash Board, NVA, Pilot Verification, Root
cause Analysis, Risk Analysis, Six sigma process improvement,
VOC

Abstract
This case study illustrates the application of six sigma process improvement to productivity
improvement in manufacturing process.

Introduction
To ensure sustainable profitable growth in a highly price-sensitive appliance
market Cost reduction through operational excellence is the key
imperative. Elin Appliances upgrades can often be justified in terms of savings
due to increased productivity. However, in a Six Sigma organization, the
DMAIC Method & host of tools can be used to improve productivity through
process improvements.

Six Sigma DMAIC

Six Sigma is a quality improvement program that looks at processes with a
view to analyzing process steps, determining what process elements need
improvement, developing alternatives for improvement, then selecting and
implementing one. It relies on a variety of qualitative and quantitative tools,
emphasizing the use of data and statistical analysis with in a method called
DMAIC, an acronym for the names of its five phases (Define, Measure, Analyze,
Improve, and Control) (Table 1). Six Sigma projects are typically selected for
their potential savings in improving any process, whether it is in production,
administration, engineering, or services. A Six Sigma project typically begins
with a high level definition of a process, using a diagram to specify the process
boundaries, inputs, outputs, customers, and requirement. In the measure phase,
a process metric is selected and used to baseline the current performance of the
process. In the analysis phase, the process is analyzed, usually with a process
map and a failure modes and effects analysis (FMEA), but may include other
types of analysis. The process map shows each process step with its inputs and
outputs and provides the basis for either a FMEA or a quantitative, usually
statistical, analysis. Areas for improvement are pinpointed and alternatives
are generated and evaluated. Once an improvement option is selected and
implemented, the project enters the control phase. In this phase, a plan is
established for monitoring and controlling the process to ensure that gains are
maintained.
The use of the DMAIC method may vary between projects. For example,
the Measure and Analyze phases of this project ran concurrently rather than
150 Elin Appliances
sequentially. Also, a proposed solution may emerge early in the Measure and
Analysis phase, leading to an emphasis on planning and implementation in the
Improve phase. Such was the case in the Productivity Improvement project.
Consequently, this paper focuses on the Measure and Analyze phases in which
a simulation based on a process map provided the justification for Productivity
Improvement.

Table 1. DMAIC Method for Process Improvement

Phase Steps
Define - Identify an opportunity and define a project to address it.
Measure -Analyze the current process and specify the desired outcome.
Analyze - Identify root causes and proposed solutions.
Improve - Prioritize solutions; select, plan, validate, and implement a solution.
Control - Develop a plan for measuring progress and maintaining gains.

Define Phase
As per “Voice of the Customer( VOC )”,customer products should have
price stability & products should be competitive in pricing. To meet customer
requirement cost reduction is the key driver for profitable growth.

Problem / Opportunity statement

1. Estimated losses in factory due to poor productivity exceeded 100 K Euros
in 2006-2007 financial year
2. Productivity improvement would generate hard and soft savings.

Measure Phase
1. The Flow through M-Phase-
2. Develop process measures
3. Collect Process data
4. Check data Quality
5. Understand Process behavior
6. Baseline Process Capability

Process mapping data for Problem statement – Throughput time: Data collected

for all assembly lines

I Chart of throughput time for Steam Iron

110 1
1 11 1
11 11
11111 1
100 1

90
Throuput time

80
UCL=75.18
70 _
X=66.83

60 LCL=58.48
11 1 1 1 11 1
11 1
1 1 1
50 1 1 1 111 1
11

40
1 11 21 31 41 51 61 71 81 91
Observation

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 151
 I Chart of throughput time of Juicer Mixer Grinder
55
1
1 1

50 UCL=50.41

Through put time

45

40
_
X=37.43
35

30

25 LCL=24.45

1 4 7 10 13 16 19 22 25 28
Observation

As per data, there is wide variation in process through put times

Cycle Time Study of Line

Chart of Cycletime vs Work stages- LEDI

2500
Cycletime in seconds

2000

1500

1000

500

0 l
ing ing ing t e ing ing ing na ing ing ing ing ing s t g G g n ck g s t g x x
t t fix p pla nt fix fix mi fix fix fix ut fix t e at in KIN o lin itio he nin i ru k in Bo Bo
se t e e e o u w p e r w d g ro y ty he EC Co po s a l c cle a nt pac in A h A
ld bk r k y p m re m , t re o r sin rd Inla fe H f u l A y g
co ary o v e g, t dy ysc n la ut sc s c o u Co Sa Pre p C o f is u a & c o x e
t c in o d o n g ain H m n &v v is ring Fa n f b W
Ro t al r fix B Bo N e Sq thin M Te & o in g ke g
e ve r g n ic t in
M o Ea in a st t
lc fix Cle Pu
al
ta Di
Me
Work stages- LEDI

Chart of Cycletime vs Work stages - JMG

180
160
Cycletime in seconds

140
120
100
80
60
40
20
0
l y x PE l et
ua itch ing ing n.1 n.2 ing fet ing ing ing ing ing ing bo l
vis sw r fix ous c on c on fix S a atch atch lean ack ber ack cy p T A Pa
sing eed oto op h ir e ir e ttom e
m rm c g p um r p Fan op
a N f e B
u Sp M &t w w Bo v a b f
ho le Si e J ly Bu
le dd po
dd Mi
Mi
Work stages - JMG

Assembly lines are highly unbalanced due to no value added content.

Root cause analysis of line stoppage

Pareto of Line stoppage factors for period Jan'07- July'07

60000
100
Time in minutes

50000
80
Percent

40000
60
30000
40
20000

10000 20

0 0
y ed s ms er
Fact ors causing line st oppage
alit ilab
le w n ssue h
qu va issu ak d o i b le Ot
nt t a n ot re w er p ro
e o b o ilit y
on tn kit ine Manp Ut
mp en ch
Co on Ma
mp
Co
Count 2887717320 2845 2545 2270 1605 1699
Percent 50.5 30.3 5.0 4.5 4.0 2.8 3.0
Cum % 50.5 80.8 85.8 90.2 94.2 97.0 100.0

Component having high Quality issue

152 Elin Appliances

Why analysis of Non Value Added activity on line

S. Non valued WHY WHY WHY WHY WHY

No. added stage
1 Toaster cooling time Heat dissipation Is not Cooling Design of cooling
stage properly controlled equipment equipment is not
deficiency optimised
2 Sieve matching Selective assay To check for noise and Unbalanclng of Interaction effect of specs of
and jar matching process vibration sieve components components
not
optimised
3 Iron cooling stage Cooling time is high Uniform cooling is not Iron farthest from Iron coding is cooling
happening fan takes longer influenced by arrangement
time to cool ambient conditions Is adequate
also
4 Preheating stage Has to go through 3 This is a to ensure iron Requirement Reliability of cold Cold setting
heating cycles attains steady state for 100% temp setting process
validation Inadequate
5 Packaging and line Packaging stages are Manual and too To many items in Packaging
cleaning not balanced many offline packaging design design not
activities simple
6 Pop up testing time at the testing Only four toasters can Testing Equipment is not
stage be tested at a time equipment designed to line
capacity is a speed.
bottleneck

Analyze Phase
The flow through A-phase
1. Determine potential root cause to measure
2. Analyze data using process stratification
3. Verify root causes with test data

Solution selection process

Generate
solution ideas Evaluating criterias

Select solutions
determine
cost benefit

Verify solutions
with tests & data

Map new
process

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 153
 High impact solutions selected against each problem
statement

Problem statement Problem statement Problem statement

Line stoppage High NVA & TPT High TPT

Remove hex screw Replicate steam Introduce conveyor

iron cooling jig belt

Recalibrate standard Automate cold setting

process Strengthen engineering
function at comaker
Duplicate /repair
moulds Temperature checking on
sampling basis
Standing working
Plastic JMG collar
Control Sieve unbalance
<10 mg& motor coupler
Enclosed chamber Within 0.1 mm run out Streamline material
for powder feeding

Increase capacity of pop up

Jar assy relocation testing jig
Near to comaker Automate RTV
application

Source sieve from Simplify packing and

better supplier cleaning stages

Implement phase
The Flow through implement phase-
• Assess risk using FMEA
• Design implementation plan
• Communicate to People
• Pilot solution and track improved performance

154 Elin Appliances

Elements of an implementation plan
Updating the business case
& objectives
Identifying resource requirements
Dealing with resistance
Some of the high risks for solutions that were addressed
through FMEA
S.No. Solution
1 Conveyorisation
2 Standing working
3 Milkman feeder
4 Sampling checking of
temperature at nine
stage
5 Automation In RTV
application
6 Deletion of antirust in
finished irons
Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 155
Overview of pilots
Project plan
The implementation plan
Budget/control
Communication
Risk analysis by FMEA
Failure mode Recommended actions
a. Breakdown 1. Proper design evaluation and release
b. Misalignment in speed 2. Preventive maintenance plan
3. Proper pilot.
a. High fatigue levels below morale 1. reconfirm working ergonomics during
in operators pilot
2. have a proper communication plan to
deal with resistance and change
3. show bench marks
Material not reaching on main line 1. Proper routing plan
on time. 2. proper design of material transfer trolleys
Irons with high/ ow temp, passing 1. Cold setting and nine stage in a con-
Into market trolled atmosphere
2. Control plan far cold setting process 3.
Introduce automation in cold setting
process
a. Machine breakdown 1. Preventive maintenance plan
b. High cycle times 2. SOP for Job setup validation and how to
c. High wastages operate the machine.
Oxidation of soleplate in market 1. Proper evaluation and release
2. ControlonT1088 Aluminium composition
 Pilot verification plan was used to modify the proposed
solutions before implementation

S.No. Pilot on Pilot Verification Modifications done on

Proposed solutions
solution

1 Automation on 1. High wastage of RTV 1. Reprogramming of m/c

RTV application 2. Misalignment of RTV 2. reduce nozzle dia
dispenser with soleplate 3. make work instruction and
3. new failure points identified training
4. revision of critical spares list

2 Oil shields in Jar 1 Paper caps not durable 1. change into plastic caps
pots 2. Fitment Issues 2. modify dimensions
3, Operator needs training. 3.Training was provided.

S Introduce cooling 1 Metal cover not cooling in 1. Addition of cooling fans

jigs required time on top
2. Compressor not getting burnt 2. proper capacity of
compressors were
incorporated in the design.

4 Standing Working 1. Operator fatigue 1. Gradual phasing in of

2. mental bafflers standing working
3. working ergonomics not 2. one to one communication
proper channels
3. lncrease table height

The improved process-Primary metric unit/man hour

Down time trend of Low end dry Iron

b a
1000
Weekly D.T in minutes

500 U C L=516

_
X=165
0
LC L=-186

701 707 713 719 725 731 737 743 749 803 809
Week no

b 1 a

600
Moving Range

450 U C L=431.6

300
__
150 M R=132.1

0 LC L=0
701 707 713 719 725 731 737 743 749 803 809
Week no

156 Elin Appliances

Process mean improved with reduced variation

Unit / man hour for Dry Irons(NDI/ODI )

A B
Weekly unit/ man hour

6
U C L=5.287
5 _
X=4.658
4 LC L=4.030

2
703 709 716 723 729 734 740 746 802 808
We e k no

A B
3
Moving Range

1
U C L=0.772
__
M R=0.236
0 LC L=0
703 709 716 723 729 734 740 746 802 808
We e k no

Down Time Trend

Control Phase
Implement permanent control methods
• Track and confirm improved long term process capability
• Standardize control plan
• Identify leverage opportunities
• Validate final financial results
• Project handout

KPI Dash board – The Process outputs to be monitored

S. What are the Y’s Who will measure/ Control methods

No. to be monitored monitor

1 Unit per man hour Production manager Control chart & OCAP

2 TPTof main assy process Line supervisor Control chart & OCAP

3 Hourly rate of production for PPC manager Control chart & OCAP
main assy

4 Line stoppage time Production manager Control chart & OCAP

5 DPMO Quality manager Control chart

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 157
 Results of Project

Financial Pulse

158 Elin Appliances

Productivity (Measured in Unit per Man hour)

Learnings from Project

• A rigorous base line is important to define the improved state of the
process
• Never underestimate the power of Pilots for an effective implementation of
solutions
• It is important to build a critical mass of people who will build the change
in the organization
• An effective and consistent communication plan is the key for embedded
change
• Behind every good product there is a good process

Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement 159