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Improving Product Shipping - Joseph Vitalo and Tom Lowery
This manufacturing company makes more than nine different filtering products (membranes) used by industrial gas producers and companies handling industrial gases to extract impurities. The company, located in the Midwest, was experiencing problems with on-time delivery of orders for its products. The problem was angering customers and reducing the company's revenues and profits. Since products got out late, payment for them was also later than it could have received. As a consequence, the company lost the value of those revenues for the period of the delay. Also, one product line had labor costs that were above budget and that line's profit margins were reduced. The shipping function was a mixed model work process, meaning that its workers shipped all the filtering products made and each model required a variation in processing. Accounting for cost was by the product line shipped. The plant also used a flexible workforce so only two of the shipping operators did shipping as their regular assignment. The remaining workers were deployed from production as needed. As shipping backlogged, more products failed to get out on time and there was more disruption to production. While defining the scope for the Kaizen event, we learned that the problems being experienced were connected to just one of the models processed (Separators). Oddly, this was the smallest filtering product produced (approximately 12 inches in length by 2 inches in diameter). The event was focused on this process variation and specifically the product preparation and packaging components. Separator Preparation and Packaging Work Process Based on the scope definition, we built a straw person direction for our 5-day Kaizen event. The proposed mission was to increase revenue and profits and raise customer satisfaction with on-time delivery by reducing the cycle time for shipping Separators, freeing workers to service other products, and thereby increasing shipping throughput. The team for the event was made up of five shipping operators and two floor
managers. Two of the operators were in shipping full time; the remaining three
split their time between shipping and production. Everyone on the team was really
supportive of the event and had participated in other successful events in the
plant. The Event After introductions, we did an ice breaker exercise in which members shared with each other what seemed to work well in the shipping process and what was problematic. This started the team thinking about the work process and alerted us to issues to investigate during the rest of the event. The discussion highlighted the amount of paperwork involved in the task and the sense that it was mostly unneeded. Also, it appeared that there were errors made in prepping the products for shipping that caused rework. Since the team was familiar with Kaizen events, we skipped the introduction to Kaizen. We set ground rules for working together, took care of administrative issues, and got to work. We followed the Kaizen process as described in the Kaizen Desk Reference Standard (Exhibit 1).
Focus the Event Our first step was to build a work process description. The Separator Preparation and Packaging work process operated in batch mode with a unit of output being one order. An order typically contained about 100 Separators. The process consisted of getting orders to ship, updating administrative records, storing the orders in a binder for later processing, pulling an order, pulling the products, preparing the product for shipment by inserting protectors into its ports, updating administrative records, selecting and preparing labels, crating the product, generating shipping documents, transporting the product to the pick-up area, and updating more administrative records. The mapping confirmed that there was a lot of paperwork to this process. The discussions during mapping uncovered some additional issues. One concern was the screens that were installed during shipping. These were inserted into the product to satisfy a customer expectation—however, some team members reported that they had heard that the customer was discarding the screens when it unpacked the shipment. We noted the issue for attention later in the event. Since the team was already trained in detecting waste, we skipped the training on waste and completed our walk through. The walk through uncovered other sources of waste. There was a fair amount of travel and transport (e.g., travel to pick up orders, to get packing crates, transporting each shipment to the loading dock, travel back and forth from building to building to obtain different materials, transporting miss-processed modules). There was rework with respect to changing incorrect labels and repeatedly changing incorrect information in the database. There was set up for shipping including layering packing materials and preparing forms. There also was considerable motion throughout the work process (unshelving, reshelving, lifting, bending, turning). The results of the walk through confirmed the mission of the event and allowed us to define the following waste reduction goals. (The safety goal was always part of our Kaizen goals for this company because it was a company priority.)
Evaluate the Target Work Process The evaluation of the work process provided a detailed record of the behaviors that were wasteful and measurements of the cycle time each consumed. For example, the total cycle time for the process was 2 hours and 24 minutes. With respect to travel/transport, we measured that the shipping operator walked 3,215 feet to complete one cycle accounting for 22% of the work process cycle time. Solve the Performance Issue With the sources of waste identified, the team generated the following improvement ideas.
The team also eliminated unnecessary processing. Two examples were redundant paperwork and printing and shipping of test reports. On the paperwork, the company had already implemented electronic forms but for some reason continued to do the paper forms as well. Checking verified that no one anywhere was using these forms. They filled a file cabinet—that's all. By eliminating this redundancy, we also freed workspace because we could eliminate the file cabinet. We also eliminated the travel/transport and motion associated with filing these forms. We eliminated printing and shipping test sheets completely. Again, presuming the customer wanted them, the producer printed and shipped a test sheet on each unit amounting to 100 pages on average. When we checked with the customer about the screens, we also learned that the customer did not require these sheets and just threw them out when they arrived. The team also detected two safety items, one was a trip hazard and the other was a strained operator position while loading and unloading crates due the dimensions of the crates. It decided to move the air hose to eliminate the trip hazard and redesign the shipping containers to reduce the possibility of back strain. Act to Improve the Target Work Process We made all the improvements during the event except the changes in the computer system to reject serial numbers in use and to introduce electronic signatures. Also, the use of the bar code system was executed after the event. That involved demonstrating to management that the change we proposed would not cause problems in record keeping. At each step in the production of the modules, operators had to record by hand the serial numbers of the units. As we observed, people along the production process were miss-reading the numbers and entering the incorrect number of a module in the computer at their workstation. When it came to ship the products, the shipping operator would find all the errors. He or she would get an original list of the serial numbers of the units as given to production and reconcile those numbers with the various number now associated with each module. To make corrections, the shipping operator had to trace each unit back to where the error was entered, then go to that workstation to correct it. Making this situation even worse, correcting a serial number required a high level of computer access that not every worker had. This caused major delays until a worker with the needed access could be available to make the corrections. Our recommended change had several elements. The two that needed testing were reducing the number of points on the production line where serial numbers were recorded and using the bar code readers to replace reading and hand entering numbers. We designed the pilot test inside the event using the Pilot tool in the Kaizen Tool Kit of the Kaizen Desk Reference Standard. The pilot was completed after the event and the process was adopted. Results The event made significant improvements in cycle time and waste elimination. The original process was reduced from 114 steps to just 50 steps—even before we eliminated the recording of serial numbers. Cycle time was reduced 59% from 2 hours and 24 minutes to just 59 minutes. Travel/transport was reduced 37% in terms of time. Distance traveled by an operator during one cycle was decreased 56% (from 3,215 feet to 1,424 feet). Rework was eliminated and the redefined work process was established as the new work standard. Paperwork was greatly reduced by eliminating unnecessary items and computerizing the remaining ones. We did not do as well with set up or motion, however. We did get a 22% reduction in set up and a 16% reduction in motion. The adoption of the bar code reader would further reduce both these forms of waste. The labor demand for shipping this product variation was reduced resulting in a $25,200 annual savings in direct labor cost for the Separator product line. Workers were redeployed to shipping other product variations that were behind schedule. Given the improvements in cycle time, throughput, and reduced cost for shipping Separators, the stakeholders judged the mission accomplished and the event a great success. Learning
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