team 682 - phase ii short form - summer 2007 phase ii executive summary lean, six sigma, quality...

Team 682 - Phase II Short Form - Summer 2007

Phase II Executive SummaryLean, Six Sigma, Quality Transformation Toolkit

Lean Six Sigma Improvement Project: Conducted for Chilco

Presented to: Dr. John SinnPrepared by: Team 682

Summer 2007

Phase II Final Report


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Project Team

The project team is comprised of Ph.D. students and working professionals located around the world.

The project team has a breadth and depth of specializations and experiences.

Team MembersMichael Carper Jared PhippsMark Chandler Nicole Radziwill Randy DeMik Scott StammMike DeVore Mark ThomasTravis Felton Evan Wood


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Project Overview

Problem: The problem for this project is to move Chilco towards achieving its mission and goals by conducting a lean six sigma improvement project focused on the Chilco organization's production and quality processes.


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Project Objectives:

1. To generate an electronic project portfolio composed of all tools completed, improved based on instructor feedback, done in the context of the workbook applications provided.

2. To control existing variation in the Chilco organization's production system, while increasing production by 20 percent based on application of lean six sigma principles and tools.

3. Chilco's current defect/rejection rate is 51,000 PPM defective based on 2006 data. The goal is to improve the defect/rejection rate by 10% to 45,000 PPM defective within one year.

4. To create a lean six sigma model documentation system based on the LSSQTT materials provided.

5. To learn all eight tools and all assigned applications, per the syllabus, with each team member gaining new knowledge and experience.


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Methodology

The analysis method is to complete 8 tools in the Lean, Six Sigma, Quality Transformation Toolkit (LSSQTT) between May and July. The tools will be completed in 2 phases, with 4 tools being completed in each phase. The following diagram provides a graphical representation of LSSQTT:

Documentation Tools, Lean

Data Tools, Six Sigma

Service, Tools Manufacturing, Non-Manufacturing

JIT,Synchronous Tools, New Product Development

KaizenProjectTeam

Cultural Foundations, Assessed Change, Continuous Improvement

Applied Research, Innovation, Projects

Advanced Problem Solving, Decision Making

Time-based Management ForGlobal, Supplier-Customer Relationships (ISO)

Leadership, Personal Growth, Knowledge

Human, Technological Infrastructure

Lean, Six Sigma, Quality Transformation Toolkit

Internal, External, E- commerce Relationships

Information Analysis, Communication System


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Key Findings

Chilco consists of three manufacturing facilities: Greensboro, Clinton and Beijing

Project team conducted analysis at each facility.

Key findings are presented for each facility.


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Key Findings: Greensboro Production

Annual Productivity: 1,520,640 units (253,440/station) Annual Income: $145,972.80 Capacity Utilization: 72%

Scrap Rate: DPMO: 57,222 Cost: $43,507.20 Top Defects: Gapping, Mold Flash, Rough Surfaces / Orange Peel.

Gap from mold not closing properly (TRIZ). Cavity pressure from injection molding machine (TRIZ). Mold not heating properly (TRIZ).

Process Issues: Receive damaged materials unknowingly (FMEA). Faulty retractor (8D, TRIZ). Cleaning agents applied during machine operation (8D, TRIZ).


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Key Findings: Clinton Production

Annual Productivity: 992,640 units (330,880/station) Annual Income: $126,024.80 Capacity Utilization: 94%

Scrap Rate: 2.7 DPMO: 26,667 Cost: $6,617.60 Top Defect: Fractured Thermoforms Highest-performing site

Process Issues: Receive damaged materials unknowingly (FMEA).


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Key Findings: Beijing Production

Annual Productivity: 3,026,150 units (657,587/station) Annual Income: $73,569.30 Capacity Utilization: 46.25%

Scrap Rate: 8.1% DPMO: 80,598 Cost: $20,660.20 Top Defects: Out of Tolerance, Poor Finish, Burrs.

Lack of automation from CAD to production (TRIZ). Process Issues:

Customers aggravated (FMEA). Improper receiving methodologies (FMEA). Cleaning agents applied during machine operation (8D, TRIZ).


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Sub-Projects Initiated

Based on key findings, a series of sub-projects were initiated to improve performance at each plant.

4 Key Sub-Projects: Greensboro Six Sigma: Gapping Rejects Beijing Six Sigma: Out of Tolerance Rejects International Market Research: Market Potential in Germany Product Innovation: Design for Environment


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Outcomes: Six Sigma Greensboro

Project Initiation: May 1, 2007 2006 Reject Occurrence: 37%

60-Day Results: July 30, 2007 New Reject Occurrence: 8%

Mold ordering process modified to include stress relieving the mold

purchasing process.


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Outcomes: Six Sigma Beijing

Project Initiation: May 1, 2007 2006 Reject Occurrence: 26%

60-Day Results: July 30, 2007 New Reject Occurrence: 9%

Preventative Maintenance (PM) program updated to include close inspection of all wear surfaces and bearings on each machining center.


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Outcomes: Germany Market Research

Western European Global Food Packaging Market: 30% of world market (and growing).

Value of European Food Packaging Industry: $53.8 billion (US).

Germany 2nd largest producer of consumer packaging.

Eastern Europe: According to Frost & Sullivan in their report on European markets, "In contrast to the competition prevailing in the mature Western European market, penetrating this market will require less investments by companies, thus allowing them to expand their operations“.

Western European Markets for Plastics in Flexible Food Packaging ( 2005). Retrieved July 27, 2007 from http://www.mindbranch.com/catalog/print_product_page.jsp?code=R1-4692


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Outcomes: Design for Environment

Design Results: new alloy/blend of Polyethylene Terephthalate (PET) and Polytrimethylene Naphthalate (PTN).

Bottles made from PET/PTN can be tunnel pasteurized for

protecting beverages to its maximum shelf life of >180 days. New alloy/blend allows for reduction in material usage by 31%,

weight reduction by 22% and cost reduction by 34%. Recyclability of used bottles into bottles, fibers and strappings

has been established. Monolayer bottles made with the new alloy/blend are part of a

growing trend for packaging that is environmentally-friendly, and do not adversely affect quality.


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Results: Objective 1 Objective: To generate an electronic project portfolio composed of

all tools completed, improved based on instructor feedback, done in the context of the workbook applications provided.

Full portfolio completed. Available in detail in Long Form.


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Results: Objective 2 Objective: To control existing variation in the Chilco organization's

production system, while increasing production by 20 percent based on application of lean six sigma principles and tools.

Greensboro: 2% increase Clinton: 0% (requires new plant for added capacity) Beijing: 6.7%

Objective not fully met in year 1. Based on new plant in Germany and other recommendations,

Objective 2 is expected to be met in 2008.


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Results: Objective 3 Objective: Chilco's current defect/rejection rate is 51,000 PPM

defective based on 2006 data. The goal is to improve the defect/rejection rate by 10% to 45,000 PPM defective within one year.

Greensboro: 47.86% reduction Clinton: negligible change Beijing: 50% reduction

Objective 3 fully met.


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Results: Objective 4 Objective: To create a lean six sigma model documentation system

based on the LSSQTT materials provided.

Full portfolio completed. Available in detail in Long Form.


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Results: Objective 5 Objective: To learn all eight tools and all assigned applications, per

the syllabus, with each team member gaining new knowledge and experience.

Project team successfully learned all tools and applications.

Results of learning displayed in full portfolio.


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Conclusions The Lean Six Sigma Quality Transformation Toolkit has been used

to successfully improve the performance of a typical manufacturing organization as represented by Chilco.

The team setting has proven to be very successful for applying the LSSQTT tools to improving decision making, planning, and execution to allow improvements throughout an organization.

These tools have proven to be useful for improving current business practices as well as providing direction for future success.

The LSSQTT tools can be used continuously to monitor and adjust the business practices of an organization.

team 682 - phase ii short form - summer 2007 phase ii executive summary lean, six sigma, quality...

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