Improvement of Inbound Supply and Warehousing

John MisoyianisKaran Chaudhry

Grant GeeKris Ladera

2

Introduction Problem StatementCurrent Operational DataRecommendations Expected ResultsSummary

Agenda

3

Company Background

4

Drilling & Production Valve

Systems

MeasurementSystems

Processing Systems

Compression Systems

5

Drilling & Production Valve

Systems

MeasurementSystems

Processing Systems

Compression Systems

6

Company Background

7

Blowout Preventer (BOP)

8

Control Pod

8

Control Pod

8

Control Pod

9

Introduction – Bingle Road Facility Overview

10

Q1 Q2 Q3 Q40

200000

400000

600000

800000

1000000

1200000

1400000

Warehouse Transactions (2011/2012)

20112012

Quarter

Num

ber

of

Tra

nsact

ions

Increase in Demand

Stall Build Automotive Build

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Keeping Up With Demand - Assembly

12

Successful Increase in Production, but…

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Problem Statement

With production operations performing at a higher capacity, the supply chain requires improvement to match the increased level of demand.

13

Process Overview

Receiving Area

13

Process Overview

Receiving

Quality Management(QM) Lot

13

Process Overview

Quality Management

Lot

Quality Control (QC)

13

Process Overview

Quality Control

NCR (Non-Conformance Report)

13

Process Overview

Nonconformance Report

Warehousing Queue

13

Process Overview

Warehousing Queue

Warehouse

13

Process Overview

Warehouse

Assembly

13

Process Overview

Assembly

14

Current QM Lot

Type Distribution ExpressionSquare

Error

Buy Triangular TRIA(39, 121, 202) 0.006571

Make Beta -0.5 + 33 * BETA(0.802, 1.21) 0.032283

Total Beta 39 + 164 * BETA(1.75, 1.35) 0.030579

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Current Operations

Receiving Summary

Receiving Quantities (Total)◦ Square Error: 0.030579

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Current Operations

Receiving Quantities (Made)◦ Square Error: 0.032283

Receiving Quantities (Bought)◦ Square Error: .006571

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Current Operations

Flow Directions◦16.59 %Dock-to-Stock/Assembly Cameron-made Good-history customer

◦83.41% To QC

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Approach – Model Formulation (Receiving)

QC Activities

◦Searching

◦Picking

◦Inspecting

◦Transfer to

Warehousing

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Current Operations

Searching◦ Worker Estimates

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Current Operations

Picking / Transfer◦ Forklift Specs

Estimated Times From Move and Lift Speeds

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Current Operations

Inspection◦ Estimated Hours per Inspection from available

man-hours then subtracted other operations

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Current Operations

Estimated Time per item (Searching + Picking + Inspection + Transfer)

Recommendations

New QM Lot

Barcoding

New WMS

23

24

New QM Lot

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New QM Lot

FIFO(First-in First-Out)Achieved

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New QM Lot (Contd..)

Rack Layout: Option 1 Rack Layout: Option 2

No. of Racks=7

Max Pallet Storage=140

No. of Racks=6

Max Pallet Storage=120

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Selective Pallet Racking

4’ X 20’

4 levels high

Racking Requirements

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Forklift Requirements

MODEL: NPR-20

Vertical Lift-At least 12 ft.

Load Lift-3000 lbs.

Operate in 10 ft. aisles

Barcoding (Parts)

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Max Character Limit=48 (PO#, Material#, Date)Easily Scannable from

Minor Defects

GS1-128 Barcode

Barcoding (Racks)

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UPC-E Barcode

Color - Coding barcodes

Easily Scannable

Barcode Location

Scanning Options

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Smartphone + App Scan Gun

New WMS

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No change to inspection process itself

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New Process Times

Process Previous New Saved / Item

Searchin

g~5m ~1m ~4m

Retrievin

g1.7m 0.411m 1.288m

Transfer 0.55m 0.37m 0.17m

  Current Improved

Dock to stock Cycle Time

1.0507 Hrs. 0.23331 Hrs.

QC Cycle Time 1.2782 Hrs. 0.28645 Hrs.

NCR Cycle Time 179.13 Hrs. 181.49 Hrs.

Number in system 92.317 96.56

Number in NCR 68.089 83.84

Number in QC per day

3.8465 4.023

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Results

Initial Investment

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Cost Analysis

Activity Description Cost

Racking Racks and Installation $9000

WMSDevelopment and Implementation $10800

Scanning Eqp. 4x Scanguns $4800

ForkliftBased on Current Model

(Clark NPR 20) $5000

Projected Savings – Same Throughput

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Cost Analysis

Process Hours / Week Saved OT Savings / Week

Searching 40 $1500

Picking 12.8 $583

Transfer 0.88 $33*

Total 53.68 $2116

Racking◦ Clear Area◦ One Day Install (Sunday)

WMS Training◦ Training during lunch hours◦ Simulated Movements (Mock ups)

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Implementation

Expected Results

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Activity Previous New Items /

Day Total Saved /

Day

Time (Searching) 5 Minutes 1 Minute 100 400

Time (Movement) 1.7 Minutes 0.412 Minutes 100 128.81

Time ( Transferring) 0.553 Minutes .379 Minutes 100 8.78

Expected Results

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Activity Hours / Week

$ / Week (OT)

$ / Week (Standard)

$ / Year (OT)

Time (Searching) 40 $1500 $1000 $78,000

Time (Movement)

12.88 $483 $322 $25,117

Time (Transferring)

.877 $33 $22 $1,710

      Total $104,830.24

Expected Results

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Barcode through facility◦ Use QM as a test phase ◦ Increase flow throughout entire facility

GS1-128 Barcode for Parts UPC-E Barcode for Racks

Inventory Cleanup (Removal of SMI)

1 2 3 4 5 6 7 N0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

Parts used over 36 months

Count

Velocity Codes

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Inventory Cleanup (Removal of SMI)

VCODE Total Stock

Value

Requiremen

ts

Excess

5 31,885 10,634 21,251

6 15,447 1,006 14,441

7 36,157 2,837 33,320

Total 83,489 14,477 69,012

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VCODE Total Stock Value Requirements

Excess

5 $2,816,599 $1,820,221 $996,378

6 $1,026,928 $628,557 $398,371

7 $2,292,371 $699,045 $1,593,326

Total $6,135,898 $3,147,823 $2,988,075

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Summary

Problem

Methodology

Recommendations

Expected Results

- Inadequate supply of parts to assembly

- Observational study from site visits- Data analysis- Model building

- Redesign of QM Lot- WMS improvements- Removal of SMI

- Increase in 16% more throughput, and/or

- Cut back 58 working hours per week with a savings of approximately $104,000

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Questions