Six Sigma Applied to Warehouse Operation

A project Report on DMAIC App to improve W atomic number 18house Operation Undertaken At xxxxxxxxxxxxxxx Warehouse In fulfilment of Capstone Project of mooring Graduate Diploma in Industrial Engineering (PGDIE) By Rajul Agarwal (103) Puneet Jain (107) PGDIE- 41 Under the guidance of Dr. K. Maddulety Professor NITIE, Mumbai National Institute of Industrial Engineering, Mumbai-400087 realization Too often we are so preoccupied with the destination, we forget the guiding light -anonymousI take this opportunity to extend my sincere thanks to HCCB, India for offering a unique platform to earn exposure and garner knowledge in the field of Warehousing Management. I wish to extend my sincere and heartfelt gratitude to my call for Mr. Sudhakar Nair, Warehouse Manager HCCB who guided, supported and encouraged me during the entire tenure of the project. I sincerely thanks to Dr K. Maddulety, my faculty guide, who has been guiding me throughout the project. 1. Executive SummaryThis project i llust prescribes an set out to address the complexities faced by beverage industry by identifying small supply chain activities which indirectly affect Customer Satisfaction. The solution is based on Six Sigma implementation through DMAIC Approach at these critical nodes. It has been established through various experiments that Customer Loyalty & Retention is very low in such industry hence the node delight is directly affected by product unavailability. So the product availability is found to be a major concern here as it directly affects the customers buying decision.It is observed that in this industry, Product availability is majorly affected by the inconsistencies at the store. This project particularly focuses on these depot functiones which include the transportation of goods from plant to warehouse, then storing goods at warehouse and finally dispatching of goods to the customers. Based on this we have attempted to provide a blue print of possible advantages such as improved fill rates and better service levels. An empirical study was conducted at XYZ Beverage federation which produces carbonated voiced drinks (CSD) and Non-Carbonated Beverages (NCB).Subsequently, its complete warehousing process process was understood and DMAIC nuzzle was used to improve the process dynamics. In the measure phase, using act Capability Analysis it was found that the warehouse process doesnt follow six sigma levels owing to the high level of damages/defectives and additionally there was a vast circumstance of utility. Henceforth, Root cause analysis was done to identify the various causes of damages/defectives. The major causes identified here were lack of standardized operate procedures (SOP), over stacking & over effect.In the implementation phase, an action plan divided Phase wise, is proposed here so as to take into account variability caused by the two shifts in which the warehouse operates. A strict visualise needs to be followed so as to maintain six sigma levels, for which p-chart type should be used in confederacy with proposed Warehouse Operation check list. Table of Contents Acknowledgement 1 1. Executive Summary 2 2. Literature Review 4 3. Introduction 4 4. Process Mapping 5 5. Define Phase 6. 1 DMAIC project Charter Worksheet 6. 2 CTQ tree 6. Voice of Customer 6. 4 Voice of lay out business 55566 6. Measure Phase 7. 5 data to be measured 7. 6 Process sigma calculation 7. 7 Statistical summary of defectives 7. 8 Control chart 7. 9 Process capability analysis 667789 7. Analysis Phase 8. 10 Root Cause analysis 99 8. Implementation Phase 9. 11 Proposed action plan 9. 12. 1 Dividing process 9. 12. 2 Major Changes Identified 10101010 9. Control Phase 10. 12 identifying the controlling elements 10. 13 FMEA 10. 4 SPC charts 11121415 10. Conclusion 16 11. References 16 2. LITERATURE REVIEW 1. DMAIC Approach to Improve the Capability of SMT Solder Printing Process This paper implements the Define-Measure-Analyse-Improve-C ontrol (DMAIC) approach to improve the capability of the solder paste printing process by reducing thickness variations from a nominal value. Process mapping and identifying key QCH are carried out in the Define phase here, while mean (x) and range R control charts followed by the estimates of process capability indices are adopted in the Measure phase.Then, the Taguchi method including L18 orthogonal array (OA), signal-to-noise (S/N) ratio, and analysis of variance (ANOVA) for S/N ratio is implemented in the Analyse phase. Taguchis trip the light fantastic toe optimization is conducted in the Improve phase. Finally, the x and R control charts for solder thickness are used in the Control phase. This paper was used to recognise the DMAIC implementation process methodology followed by any process. The insights obtained were how Process capability analysis was carried out and furthermore how use of control charts be validated. . Applying Six Sigma Techniques in Plastic Injection Mou lding Industry This paper presents an approach to implement a six sigma technique to decrease the scrap rate in a plastic injection molding plant. The primary tools used here are SIPOC, MSA, FMEA, P-Control Charts and Hypothesis Testing. In this role study we compare the average scrap rate for the Before study period with the average scrap rate of the After study period. This paper was used to understand the use of p-charts and how they apprise be utilize in processes were defectives are being looked at.The insights obtained were effective use of FMEA and p-charts in such processes. 3. Introduction HCCB operates a warehouse in Sewri. It caters to South and central Mumbai. It has a substance of around 2000 Pallets or approximately 3-4 Lacs bottles (includes Recyclable Glass Bottles + pet bottles + can). It has around 35 mini trucks which daily carries around 38 thousand of bottles dispatched from the warehouse and cause it to the divers(prenominal) stockist/Retailers. The wareh ouse operates in two shifts every afternoon consignment comes from plant to the warehouse which is set down there and then stacked.Every morning at a specified place called floor the pallets are arranged inspected and then containers are loaded to the mini trucks which deliver it to the stockists/retailers. 4. Process Mapping When a truck containing pallets of soft drinks is loaded at the plant it is fully inspected and then move towards the Warehouse * Once it is reached to the Warehouse, forklifts unload the pallets and then arrange it in the warehouse * FIFO is followed for news leak of goods Now the pallets are arranged at a floor where all the pallets are inspected * Simultaneously with care carriers (small trucks) keep on arranging inside the warehouse * During inspection if any damage is found then it is replaced by the same fresh item * After inspection the containers are loaded (Manually) to the carriers * While loading some bottles gets damaged that is also replaced by the fresh one and a count is kept for damaged goods * Once the loading is done the carriers move towards their emergency i. e. either to Stockist/retailers 5. Define Phase 4. 1 DMAIC project charter worksheetDMAIC Project Charter Worksheet Project Title To reduce the damages& improve the productivity of warehousing process Project GuideProf. Madhu Letty,MrSudhakar Nair Team Members Rajul Agrawal, Puneet Jain Business Case Reduce the cost of warehousing & last mile delivery Problem account The delegate is to identifythe sigma level of warehousing process including last mile delivery as a single processand then take apart the process and find the scope of improvement Goal StatementTo improve the warehousing process & reduce damages 4. 2 CTQ Tree Reduce damages Men Machine system * Proper Training Learning Curve * Commitment * Proper Maintenance * Proper Stacking * Use of gnawer boxes * Inspection 4. 3 Voice of Customer present the customers are stockists/retailers to whom the go ods are delivered. The Voice of Customer (VOC) is used to describe customers needs and their perceptions of product or service. The customer shootments from process and product are * No damage/deformed item should reach to customer * If any damage is found then on the spot replacement * Customers dont want to keep the track of damaged items which needs to be replaced next time when delivery van will come 4. Voice of Business VOB is something which is critical from the perspective of stakeholders (WHse managers, Operators, All sorts of employees etc. ) in the business. * Improve profitability * Reduce cost * Least damages * Improve fill rate * Improve customer satisfaction 6. Measure Phase 5. 1 Data to be measured The following table shows the defective items noted in the month of October- November. From this data we calculated the defective proportion & defects per million opportunities. Defective Items Total Items loaded Defective proportion DPMO 145 392732 0. 000369209 369. 2087 55 392700 0. 000394703 394. 7033 132 378243 0. 000348982 348. 982 159 332345 0. 000478419 478. 4185 165 402389 0. 000410051 410. 051 145 345673 0. 000419472 419. 4716 123 326789 0. 00037639 376. 3897 190 389023 0. 000488403 488. 403 120 334565 0. 000358675 358. 6747 one hundred ten 324123 0. 000339377 339. 3773 121 306543 0. 000394724 394. 7244 156 402489 0. 000387588 387. 5882 212 437698 0. 000484352 484. 3522 138 290873 0. 000474434 474. 4339 112 238945 0. 000468727 468. 7271 119 367545 0. 00032377 323. 7699 129 263421 0. 00048971 489. 7104 56 463752 0. 000336387 336. 3867 145 375643 0. 000386005 386. 0048 123 342356 0. 000359275 359. 2751 90 289532 0. 000310846 310. 8465 225 462163 0. 000486841 486. 8412 121 284532 0. 00042526 425. 2597 175 404512 0. 00043262 432. 62 180 403212 0. 000446415 446. 4153 127 329261 0. 000385712 385. 7122 212 431962 0. 000490784 490. 7839 132 337961 0. 000390578 390. 5776 198 326781 0. 00060591 605. 9104 109 392861 0. 000277452 277. 4518 5. 2 Process Sigma Calculation fair no. of items loaded each day = 360418 Average no. of defective items per day = 148Average defective proportion = 0. 000411328 Average DPMO = 411 Value of Sigma = 4. 9 Since the process sigma is 4. 9 which is less than 6. Now the next task is to analyse the process to find the scope of improvement. 5. 3 Statistical summary of No. of defective items observed at various days Observations * Since P-value 0. 05 so the data passes the nitrogen test * From the histogram it is visible that frequency distribution of defective data can be approximated to normal distribution * Since the data can be approximated as usually distributed we can apply process capability and SPC analysis . 4 Control Chart Here in this case when the goods are inspected either they will be accepted to be shipped or simply discarded. So here we are not concerned with the no. of defects but concerned with the non-conformances (defectives). So the P-chart has been selected for SPC analysis- Obs ervations * The in a higher place P-chart shows that all the observations lie inside the natural control limits. * It can be said that the process is under statistical control. * Since the process is under statistical control we can check for its capability. 7. Process Capability Analysis using MINITAB 15 * The desire is to minimise the damages to nil so the target valueis set to be zero. Observations * Process sigma = 3. 34 * PPM Def = 410 which is lesser than 3. 4 ppm 7. Analysis Phase 6. 1 Root Cause Analysis 6 Implementation Phase 7. 1 Proposed execute Plan 7. 1. 1 Dividing the whole process of warehousing to deliver goods to the stockist/retailers into 4 stages The process is divided into 4 stages on the basis of people& machines come to. In stage 1 goods are transported to the warehouse by one set of people (3 PL).Since warehouse operates in 2 shifts so when the trucks come from plant to warehouse that is unloaded by diametrical set of people & in stage 3 stacking at floor + inspection + loading containers to carriers are done by different set of people (working in 2nd shift). In stage 4 the goods transported from warehouse to stockists/retailers by different set of people and different carriers are involved. The conclusion of dividing the whole process into 4 stages is to get more specific causes stage by stage and to get more insights.Since the different people and machines are involved in each stage so some specific plans may be put in place to reduce the damages. The following table shows the different causes and actions Stage Causes Action Plan 1 * In-Transit Damages * Bad Road Conditions * Mishandling by the operators * Since in stage 1 the transportation is done by the 3PL so while selecting 3PL service provider company can bring some clauses in the agreement related to minimum breakage acceptable * Operators can be nstructed to follow the best route * Maintenance of carriers periodically after a specified time 2 * Jerk in forklift * Over stac king * Improper cooking * Mishandling by the operators * Establish SOP for the forklifts operation * Periodic maintenance of forklifts * Company currently uses diesel run forklifts that can be replaced by battery operated forkliftswhich require less maintenance * Provide incentives to the operators for achieving a certain level of damage free work * Provide ergonomically fithandles to the containers * Pet bottle packets as shown below gets undo sometimes that needs proper packaging * Above kind of packaging can be either replaced by carton (but that would not be a cost effective solution) or same packaging can be improved 3 * Improper operation/jerk in forklift * Improper inspection * Mishandling * Try not to rotate the people involved in inspection so that their learning curve makes them more efficient in that particular task * Provide incentive to the employees * Encourage employees 4 * Overloading * Improper truck operation * void overloading * Proper training to the truck operators * Hire experienced operators * Provide incentives environmental Causes * Rat Bite * Especially tetra packed drinks are attacked by Rats * Use Rodent boxes to kill the rats * Daily check the rodent boxes & clean it if needed 7. 1. 2 Major changes which can be brought in future to improve the overall process * SOP for forklift operations * Proper maintenance of forklifts and Trucks * Use of battery operated forklifts * Avoid overloading * Avoid over stacking 7 Control Phase 8. 1 Identifying the Controlling ElementsThe Critical-To-Quality Elements needs a proper control and inspection and hence the following steps can be taken for the same 1. Fork Lift Inspection Check Sheet 2. Training Check List/ Regular Knowledge Tests 3. Rodent/ Insects Check List 4. Better Stacking Procedures a. Increasing the strength of the pallets from by increasing the cross pieces by 8 from 5 for the same 5cm x 10cm boards. b. In case of need to over stack during peak demand, we can keep the crate s at a cross position so that the load gets distributed 8. 2 Failure personal manner and Effect Analysis (FMEA) Use of FMEA tool for better analysis of damage reasons will help establishing a better control procedure. FMEA Flow Diagram 8. 3 Use Statistical Process Control (SPC) ChartsThe case here is for graphing defectives for a varying sub group set. Hence use of p-chart should be used for never-ending control. It will check when the variation is natural and when it needs correction. The following excel template can be used where directly data can be entered and the resulting p-chart will be generated. Excel template for Formulating p-chart 9. ESTIMATED BENEFITS OF PROJECT The biggest benefit of the project is in terms of reducing the risk of product unavailability downstream. The probability of defects can be drastically decreased and remain in specification limits. * 4-Stage Implementation phase for reducing defectives * Increased Sigma Levels approaching six sigma standards I ncreased Customer satisfaction and Product availability * Laid down Standard Operating Procedures (SOPs) for better warehouse operations control 10. CONCLUSION The reasons for the excessive defects are found. Over-stacking, Over-Loading & improper forklift operation were found out to be prime reasons using Cause and Effect Diagram. These were considered the CTQs for the warehousing operation. Project benefits were estimated and it is found that this improvement can bring the improvement in fill rate. 11. REFERENCES * www. dmaictools. com * www. sixsigmatutorial. com * www. sixsigma. in * Six Sigma Way ? Team Field book by Peter S. Pande, Robert P. Neuman and Roland R. Cavanagh * Six Sigma for managers by Greg Brue