1. Luxfer Gas Cylinders – S&OP Process Improvement
Aditya Tandon
MBA Candidate – Wake Forest University

2. Project Objective Improve the efficiency of the S&OP Process
Revamp the Capacity Planning Model
Old model focused on earlier plant setup of Luxfer Gas Cylinders
Ease data exchange between Sales, Production and Finance teams

3. Methodology
Lean Six Sigma – Reduce waste in the process – Process Improvement
Six Sigma DMAIC Framework
DEFINE – the goals of the improvement activity
MEASURE – the existing system and establish metrics
ANALYZE – the system to eliminate waste
IMPROVE – the system
CONTROL – the new system

4. Define Phase - Project Charter
Project Statement: Improve the Graham Interface with the S&OP Process
Project Scope:
Automate Capacity Planning Model
Automate inventory, overtime and labor hours calculations
Improve information exchange between different levels in the process
Mission:
Reduce the time taken for Capacity Planning Forecast and Financial Forecast
Reduce man-days in S&OP Process
Improve process efficiency by reducing error susceptibility
Define
Measure
Analyze
Improve
Control

5. Customers Mike Mensel – Project Sponsor
Jeff Riddell – Responsible for the Sales Forecast
Jack Nauman – Responsible for the Capacity Plan
Bill Simonsen – Responsible for the Financial Forecast
William Birdwell – Responsible for Overtime and Labor calculations

6. Milestones

7. Measure Phase - Process Maps
Measure the current process
Define
Measure
Analyze
Improve
Control

8. Capacity Planning

9. Capacity Planning Analysis

10. Financial Forecast Process Map

11. Analyze Phase Analyze Cause and Effect Diagrams
Analyze the current process to separate the value-added activities from Non-Value Added
Define
Measure
Analyze
Improve
Control

12. S&OP Cycle Time

13. Capacity Planning Model Efficiency

14. Value Add / Non-Value Add Activities

15. Improve Phase - Factors Considered
Reduce the Non-Value add activities
Incorporate mix of cylinders
Automate calculations reducing probability of errors
Rework calculations to be incorporated
Ingot inventory calculations
Calculate overtime for each month
Ease of use
Reduce manual effort
Define
Measure
Analyze
Improve
Control

16. Send data to corresponding teams
New Process
Production Planning Planning Analysis
Start
Compare and analyze the required hours with available hours for each machine center
Repeat the capacity adjustment for the auto-hydro to reduce overtime to zero. Also consider the Rework inventory
Repeat the capacity adjustment for the Pack to reduce overtime to maximum of two days considering the weekend days
Repeat the process for all months in the forecast
For the front side are we exceeding production capacity?
Consume either US FG Inventory or UK Inventory in order to reduce production hours
Yes No
Stop
3 – 4 hrs
10 min
Start
5 min
Analyze each work center for the capacity and over time
Send data to corresponding teams
Create new folder for the current month. Copy Sales Forecast
Run the efficiency report for each machine center and export the output to the same folder
Get the PPH and Sales Forecast Data
Calculate actual inventory for each machine center and for UK
30 min

17. New Financial Forecast Process

18. Value Add / Non-Value Add Activities

19. New Model – Master Data Sap data – Efficiency Report
Parts per hour calculation based on this info
Helps in Ingot Calculations
Sap data – Efficiency Report

20. Plant Stats Shift employee statistics to calculate Productivity
Machine center outputs to calculate the available capacity
Actual Inventory levels
from SAP

21. Graham Back and Front Plan
Directly linked to Master Data - % is based on whether considered in the respective machine center
Detailed Analysis - differentiates between categories of Inventories
Impacts the actual inventory status of UK, Finished Goods, Rework and Sub-Assembly inventory
User friendly with Financial Forecast model

22. Ingot Inventory Based on Front Plan production projections
Forecasts the Ingot required each month to meet forecast
Calculates the current month actual Ingot consumption

23. Mix based capacity forecast
Total hours required for the month
Calculates production effort considering the mix in the forecast
Capacity required in hours for each machine center
Enables better planning with an accurate forecast
Considers optional improvement in production capacity
Limits the production improvement based on management decision
Similar implementation for each machine center

24. Forecast Summary
Summary comparing the Required and Available capacity at the three machine centers
Required capacity based on the Mix of cylinders
Calculate Overtime/Excess Capacity at the three machine centers

25. Forecast Summary (contd.)
Inventory updates linked to the consumption and builds made in the Graham Front and Back Plan
Actual inventory status at the end of each month for Sub-assemblies, rework, finished goods, Ingot and UK Inventory

26. Inventory $ projections
Added feature to the production model for ease of data transfer to the Financial model
Estimates the dollar amount of inventory existing in the plant

27. Control Phase
Develop parameter checks to ensure all input variables are in specifications
Develop a control plan that determines follow-up actions incase the process is outside control limits
Develop run charts to analyze the final results
Define
Measure
Analyze
Improve
Control

28. Control Input parameters
Restriction on the variation from standard
Comparison of Upper and Lower Limits
Limits to a 15% variation
Weighted average calculated data for various configurations on the back-side of the plant

29. Front – Side Run Chart
Based on upper limit of 3000 parts produced per day and lower limit of 2200 parts per day
Limit decided by management semi-annually
Limits updated on the Hourly calculation sheet

30. Auto – Hydro and Pack Run Chart

31. Key Improvements
Accurate forecast based on the mix of the cylinders – Error % reduced from 25% to 2-3%
Reduction of waste – non-value added activities
Production forecast effort reduced by 60% i.e. 1.5 man-days
Financial forecast effort reduced by 30% i.e. 1 man-day
Easy transition of information between Production model and Financial Model
Detailed inventory consumption
Ingot forecast
Accurate overtime forecasted for production labor

32. Learning's Importance of forecasting
Various variables such as mix, labor etc. that lead to an accurate forecast
Understanding variables critical for a successful manufacturing business such as absorption, spending etc.
Importance of planning – DMAIC approach
Asking right questions in Voice Of Customer

33. Thank You