5-1 D M A C I efine: This stage lays out the goals of a process improvement project that are consistent with both the organization and the customer’s needs

5-2 Current Project Status: Wrote the business case for building and implementing a BI system and collected the business requirements Built and populated the BI system Currently running queries Current state of the process: Filling orders based on an x-factor of 8. Findings/ accomplishments: We realized the need to move forward to decrease the number of assemblies. Next steps: Obtain signoff for the Project Charter; develop metrics for the upcoming Measure phase; speak with HR about how/if staffing needs may change based on an x-factor that may vary by month DMACI Executive Summary for Define

5-3 Using BI to Enhance the Define Phase Our BI system is updated with new data weekly. Decision-makers can examine this data frequently to decide: – –whether the initial SMART goals and objectives are being met – –if new SMART goals for the process should be set – –and, whether MMC should implement customer satisfaction surveys to ascertain if customers notice an improvement in delivery time of orders due to an improved x-factor DMACI

5-4 LSS Tools Used to Define SMART Goals Project Charter DMACI

5-5 SMART Goals We will run queries on the database every Friday morning to determine the new x-factor for the upcoming week. We will create a 2% assembly savings in one month by using our BI system to increase the x- factor minimally. After three months of adjustments to the x- factor, we will develop metrics that allow us to relate the savings in assemblies to cost savings. DMACI

5-6 Project Charter DMACI

5-7 Project Charter DMACI

5-8 D M A C I easure the process to determine current performance; quantify the problem.

5-9 Goal of the System DMACI To calculate an ideal “x-factor”—the maximum spread between two rows which determines whether an order qualifies as a straight or as an assembly— in order to: Minimize order costs Maximize the usage of floor employees who fill orders Improve customer satisfaction through more efficient order handling processes

5-10 Metrics DMACI Input Variables Average number of orders and lines filled for every weekday % of daily orders that become assemblies and straights Average number of lines in an assembly order Average number of documents Average number of lines per document Floor, Row, and Area location of each order

5-11 Metrics DMACI Outputs Total Assemblies Converted to Straights Top Four Regions Total Assemblies Saved in the Top Four Regions Assemblies Saved Above Target And finally... The “x-factor”

5-12 Measure DMACI Goal: Reduce the number of bin assemblies by 2%. What does this mean? LSS Tools: Process Mapping and Data Collection Plan Real time work association Data extraction through IC1 Mainframe system: selected 27 days of data which produced over 500,000 line based records

5-13 General Stats DMACI

5-14 Measure (General Stats) DMACI Avg Total Daily Lines: Avg Daily Bin Lines: 16973, or 84.9% of total lines with STDEV of.4% Avg of Bin Assembly Lines: 5168, or 25.9% of total lines with STDEV of.9% Avg Number of Lines per Bin Assembly: 5, with STDEV of.14

5-15 Getting Closer To The Goal DMACI We now know that we need to save about 570 bin assemblies in a 27 days sample, or roughly 23 per day. For modeling purposes, we narrowed our sample to include only 2 line bin assembly orders, which represents about 28% of all bin to bin assembly order. We will have to extrapolate our results (divide by.28) to simulate total savings.

5-16 D M A C I nalyze Phase: Analyze and determine the root cause(s) of the defects.

5-17 Data and Process Analysis Identify gaps between current performance and the goal performance. The gap of assemblies to be reduced is (2%). Or 573 assemblies. DMACI

5-18 % Reduction of Assemblies DMACI Identify gaps between current performance and the goal performance. The gap of assemblies to be reduced is (2%). Or 573 assemblies.

5-19 Root Cause Qualitative Analysis Bottleneck: limited floor space and poor layout design Too many assemblies However, reducing the number of assemblies is top priority because we cannot increase warehouse space. DMACI

5-20 Root Cause Quantitative Analysis DMACI

5-21 Executive Summary - Analysis Current Project Status: Identified scope of analysis based on root causes. Current state of the process: Determining the new x-factor and which areas should be affected. Findings/ accomplishments: We have confirmed the scope of our investigation to 2 line assemblies. With an x-factor limit of no more than 18. DMACI

5-22 How BI Can Help Pulls the data to analyze findings on the qualitative and quantitative level. Determines the gap between the current and desired performance level. DMACI

5-23 LSS Tools Used Histogram Pie Chart Regression Analysis DMACI

5-24 Regression Analysis of Assemblies Converted to Straights per X-Factor DMACI

5-25 D M A C I mprove: This stage focuses on improving processes by eliminating defects and on how work flows through the processes

5-26 Current Project Status: Developed and identified a range of possible solutions through data analysis and manipulation; Identified criteria necessary to achieve the desired results; Analyzed the impact of the solution and error-proofed the process. Current state of the process: Analysis is performed to determine the x-factor resulting in the highest cost and productivity savings across all regions of the warehouse Findings/ accomplishments: Based on the last month’s customer orders data, 4 warehouse areas were selected as those that are most sensitive to x-factor manipulation Next steps: Evaluate the effectiveness of statistical findings on future customer orders C D MAI Executive Summary for Improve

5-27 Using BI in the Improve Phase BI system could be used on an on-going basis to: – –Determine process improvement effectiveness – –Prevent bottlenecks in the Assembly department resulting from using a smaller than necessary x-factor in Order Filling – –Calculate and project process savings based on similar data patterns Benefits for Executive Decision Making: – –BI system will enable executives to more accurately project future costs related to Order Acceptance, Order Filling and Assemblies areas – –Specifically: Improved financial projections for labor and supervisory costs (increased efficiency) Increased benefit for employee cross-training under static labor usage scenarios (prevention of bottlenecks) C D MAI

5-28 LSS Tools Used in the Improve Phase Setup Reduction Queuing Methods for Reducing Congestion and Delays C D MAI

5-29 Setup Reduction We used setup reduction to allow for the reduction of time spent on completing a customer’s order, reducing lead-time without reducing the completion rate This resulted in an overall process improvement, increased efficiency and elimination of errors C D MAI You need to improve quality so you can achieve maximum speed

5-30 Queuing Methods for Reducing Congestion and Delays We used queuing theory to evaluate the following elements: – –Arrival pattern of inputs (customer calls/orders) – –Waiting time (for order to be sent to Processing) – –Process time (time to respond & fill an order) Process improvement and bottleneck reductions were recorded Process goals were achieved, however monitoring is still needed C D MAI

5-31 D M A C I ontrol Phase: Control future process performance.

5-32 Executive Summary - Control Current Project Status: Project has been finalized, only monitoring remains. Current state of the process: Currently running on a global x-factor of 8 but we will begin the transition to 17 in busiest areas. Findings/ accomplishments: We are on track to reach our 2% target. DMACI

5-33 Monitoring Plan Approval must be granted prior to any change greater then +-2 in any area. Every Tuesday following a change an evaluation must take place to ensure no obvious reduction in work process. DMACI

5-34 Documented Procedures To ensure record keeping any change in X- Factor will require a form (*form chgx) to be filed and sent to any manager working in the affected area. This will help to create a standardized system of change and help prevent a lack of communication. DMACI

5-35 Response Plan DMACI If for some reason the new X-Factor given for an area is immediately realized to be ineffective they are to revert back to the previous number until temporarily.

5-36 Control Plan DMACI The LSS tool used in the control phase is a control plan.

5-37 What Is A Control Plan? DMACI It is a management tool to identify and monitor the activity required to control the critical inputs or key outputs for a process so the process will continually meet its product or service goals. Source:

5-38 Re-Cap: Control Plan Steps Step 1# Determine the regions with the 4 largest savings. Step 2# Receive approval from management to make change. Step 3# Notify all parties involved. Step 4# Make the change. Step 5# Monitor the change to insure proper rollout. DMACI