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
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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-Phase2. 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
1 11
11 11
1
11111
1
100
Throuput time
90
80
UCL=75.18
_
X=66.83
70
60
11 1 1
1
11
1
1
1 1
1 1 1 111 1
11
50
11 1
LCL=58.48
40
1
11
21
31
41
51
61
Observation
71
81
91
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
UCL=50.41
Through put time
50
45
40
_
X=37.43
35
30
25
LCL=24.45
1
4
7
10
13
16
19
Observation
22
25
28
As per data, there is wide variation in process through put times
Cycle Time Study of Line
Chart of Cycletime vs Work stages- LEDI
Cycletime in seconds
2500
2000
1500
1000
500
0
l
s t g G g n ck g s t g x x
ing ing ing t e ing ing ing na ing ing ing ing ing
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Work stages- LEDI
Chart of Cycletime vs Work stages - JMG
Cycletime in seconds
180
160
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
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ing eed oto op h ir e ir e ttom
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B
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S
le
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Mi
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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
100
80
40000
60
30000
40
20000
20
10000
Fact ors causing line st oppage
0
s
y
le
ms
ed
w n ssue
alit
ilab
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i
issu ak d o
qu
va
er
p ro
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nt
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e
o
b
o
ilit
kit
on
tn
ine Manp
Ut
en
mp
ch
on
Co
Ma
mp
Co
Count
Percent
Cum %
Percent
Time in minutes
60000
50000
h
Ot
er
0
2887717320 2845 2545 2270 1605 1699
50.5 30.3
5.0
4.5
4.0
2.8
3.0
50.5 80.8 85.8 90.2 94.2 97.0 100.0
Component having high Quality issue
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Elin Appliances
Why analysis of Non Value Added activity on line
S.
Non valued
No. added stage
1
Toaster cooling
stage
WHY
WHY
WHY
time
Heat dissipation Is not
properly controlled
Selective assay
process
To check for noise and
vibration
Cooling
equipment
deficiency
Unbalanclng of
sieve
2
Sieve matching
and jar matching
3
Iron cooling stage Cooling time is high Uniform cooling is not
happening
4
Preheating stage
Has to go through 3 This is a to ensure iron
heating cycles
attains steady state
5
Packaging and
cleaning
line
Packaging stages are
not balanced
6
Pop up testing
time at the testing
stage
Only four toasters can
be tested at a time
WHY
WHY
Design of cooling
equipment is not
optimised
Interaction effect of specs of
components
components
not
optimised
Iron farthest from Iron coding is
cooling
fan takes longer influenced by
arrangement
time to cool
ambient conditions Is adequate
also
Requirement
Reliability of cold
Cold setting
for 100% temp
setting
process
validation
Inadequate
Manual and too To many items in
Packaging
many offline
packaging design
design not
activities
simple
Testing
Equipment is not
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
Line stoppage
Problem statement
High NVA & TPT
Problem statement
High TPT
Remove hex screw
Replicate steam
iron cooling jig
Introduce conveyor
belt
Recalibrate standard
Automate cold setting
process
Duplicate /repair
moulds
Plastic JMG collar
Enclosed chamber
for powder
Jar assy relocation
Near to comaker
Source sieve from
better supplier
Strengthen engineering
function at comaker
Temperature checking on
sampling basis
Standing working
Control Sieve unbalance
<10 mg& motor coupler
Within 0.1 mm run out
Increase capacity of pop up
testing jig
Streamline material
feeding
Automate RTV
application
Simplify packing and
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
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Elin Appliances
Elements of an implementation plan
Overview of pilots
Updating the business case
& objectives
Project plan
The implementation plan
Identifying resource requirements
Budget/control
Communication
Dealing with resistance
Risk analysis by FMEA
Some of the high risks for solutions that were addressed
through FMEA
S.No.
Solution
Failure mode
Recommended actions
1
Conveyorisation
a. Breakdown
b. Misalignment in speed
1. Proper design evaluation and release
2. Preventive maintenance plan
3. Proper pilot.
2
Standing working
a. High fatigue levels below morale
in operators
1. reconfirm working ergonomics during
pilot
2. have a proper communication plan to
deal with resistance and change
3. show bench marks
3
Milkman feeder
Material not reaching on main line
on time.
1. Proper routing plan
2. proper design of material transfer trolleys
4
Sampling checking of
temperature at nine
stage
Irons with high/ ow temp, passing
Into market
1. Cold setting and nine stage in a controlled atmosphere
2. Control plan far cold setting process 3.
Introduce automation in cold setting
process
5
Automation In RTV
application
a. Machine breakdown
b. High cycle times
c. High wastages
1. Preventive maintenance plan
2. SOP for Job setup validation and how to
operate the machine.
6
Deletion of antirust in
finished irons
Oxidation of soleplate in market
1. Proper evaluation and release
2. ControlonT1088 Aluminium composition
Improving Productivity by Reducing Operation Cost as Six Sigma Process Improvement
155
Pilot verification plan was used to modify the proposed
solutions before implementation
S.No. Pilot on
Proposed
solution
Pilot Verification
Modifications done on
solutions
1
Automation on
RTV application
1. High wastage of RTV
2. Misalignment of RTV
dispenser with soleplate
3. new failure points identified
1. Reprogramming of m/c
2. reduce nozzle dia
3. make work instruction and
training
4. revision of critical spares list
2
Oil shields in Jar
pots
1 Paper caps not durable
2. Fitment Issues
3, Operator needs training.
1. change into plastic caps
2. modify dimensions
3.Training was provided.
S
Introduce cooling
jigs
1 Metal cover not cooling in
1. Addition of cooling fans
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
2. mental bafflers
3. working ergonomics not
proper
1. Gradual phasing in of
standing working
2. one to one communication
channels
3. lncrease table height
The improved process-Primary metric unit/man hour
Down time trend of Low end dry Iron
Weekly D.T in minutes
1000
b
a
1
U C L=516
500
_
X=165
0
LC L=-186
701
b
707
713
719
725
731
Week no
737
743
749
803
809
a
1
Moving Range
600
450
U C L=431.6
300
__
M R=132.1
150
LC L=0
0
701
156
707
713
719
725
731
Week no
737
743
749
803
809
Elin Appliances
Process mean improved with reduced variation
Weekly unit/ man hour
Unit / man hour for Dry Irons(NDI/ODI )
A
B
6
5
U C L=5.287
_
X=4.658
4
LC L=4.030
3
2
703
716
723
729
734
We e k no
740
746
A
802
808
B
Moving Range
3
709
2
1
U C L=0.772
__
M R=0.236
LC L=0
0
703
709
716
723
729
734
We e k no
740
746
802
808
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
No. to be monitored
Who will measure/
monitor
Control methods
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
main assy
PPC manager
Control chart & OCAP
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
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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