1. ISE 250 Optimization of Lead Time for XYZ Corp. -Dr. Baruch Saeed Final Project Report Anandi Rangarajan Angela Lo Rohit Salte Sharath Puttabuddi

2. Agenda ► Company Background ► Define ► Measure ► Analyze ► Improve ► Control ► Conclusion

3. Description of XYZ ► Company Description  A company that manufactures microprocessors and delivers to all over the world ► Problem Areas  Long customer responding time – it takes between 2 days and 25 days until customers get response on order availability  Large amount of change order request  High volume of follow up calls / emails on order clarification

4. Define Charter Project Gantt Chart Brainstorming CTQ Tree Process Flow Diagram Flow Chart SIPOC

5. Brainstorming What areas can be improved? Takes long time for request to get to PSP Takes long time for BP to discuss with the fab Takes long time for manufacturing site to work on build plan Hard to accommodate when customers have to change orders Better meet customer’s demand Takes long time for customers to receive response

6. Inputs ProcessCustomersSuppliers r Client r CBA r GBA r PSP r Warehouse Step 1: Receiving Customer Order Outputs Step 2: Accumulation of Orders Step 3: Checking Inventory / Mfg if required Step 4: Committing Order fulfillment r See Below r Order Fulfillment r Client Step 5: Customer receives the products r Order r Order form r Granting Tool r Packing SIPOC SIPOC PSP – Product Supply Planner GBA – Geographical Business Analyst CBA – Customer Business Analyst BP – Business Planner

7. Charter Problem Statement Need to eliminate long waits for customers to get the company’s response on their orders Customers ► High-Tech companies from all over the world Business Case ► Increasing customers satisfaction by reducing lead time ► Reducing analyzing time on build plan by improving communications between BPs and the Fab ► Better knowledgeable Customer Business Analyst to minimize the chance of order change from customers Scope ► The company should find ways to improve their responding time to customers ► The company should focus on the effective process flow within the company to minimize the processing time

8. Charter – con’t Measures ► Long responding time is considered to be more than 1 ½ day until the customers receive their order response ► Long discussion time between the fab and BP is considered to be more than 3 days Deliverables ► Create details proposals on how to improve the overall system ► Implement a more efficient process flow within the company ► Provide a plan for ongoing monitoring and improvement on this process Resources ► Team Sponsors: Kevin Li ► Team Members: Angela Lo, Sharath Puttabuddi, Rohith Salte, Anandi Rangarajan ► Coach: Dr. Baruch Saeed

9. Project Implementation Gantt Chart

10. CTQ Tree CTQ Tree is used for · Unspecified customer requirements · Complex, broad needs To reduce the lead time NEEDDRIVERSCTQ TREE Enhanced scheduling Making right decision in shortest time Faster and better communication lines New Decision Support GUI tools that improve the ability to fine-tune schedules to give better conformance to overall plans Implementation of Business Intelligence Applications Faster production of schedule More time for alternative scenarios of production, leading to better schedules and improved productivity Build local sales office to replace existing single-site Implementation of faster and multi-faceted Collaborative communication systems such as Telephone, mobile phone, internet chat In manufacturing, specification limits often come from technical or mechanical requirements, otherwise, the base specification limits on data about customer needs set the specifications where customer satisfaction starts to fall off noticeably

11. CTQ Tree…con’t To provide Good Customer Service PROVIDE Knowledgebale Customer Reps Provide updated information to Customer Reps To reduce the analyzing time between BPs and Fab NEED DRIVERSCTQ TREE Short wait time Real-time manufacturing/sales data Implementation of ERP/SCM systems Improved process-related guidance systems Implementation of workflow- based Decision Support Systems and Data Mining tools Provide GUI tools to help make faster and correct decisions Implement a training routine Implementation of data mining and analytical tools to provide accurate and current data

12. Customer’s order CBA receives orders CBA sends order to GBA GBA accumulates and enters all orders into one spreadsheet Order form GBA sends order form to PSP PSP receives order form PSP checks inventory PSP sends Out support message to GBA PSP loads commits into granting tool Work with BP If supply is not available BP works with the Fab on build plan changes Approval of changes Change approval sends to PSP GBA sends Support Message to CBA CBA receives support message & books commits for customers Warehouse sends goods out Goods are boxed Customer Receives orders Current Process Flow Diagram 1 day½ day 1 day 7 days 21 days Current Processing Time Inventory Available: 11 days Inventory Not Available: 32 days CBA – Customer Business Analyst GBA – Geographical Business Analyst PSP – Product Supply Planner BP – Business Planner

13. Process Flow Diagram

14. Measure Data Collection Pareto Chart Histogram Process Sigma

15. Data Collection ► Focused Areas  Average Responding time to customers  Average Amount of follow up calls / emails

16. Data-Collection Plan Form Data Operational Definition and Procedures What Measure type/ data type How measured How to analyze the data To obtain a better understanding of customers’ satisfaction and to reduce the lead time Instant Observation (in hours) ► CBA records time when they receive customers order ► PSP records time when they receive GBA’s orders ► BP records the time needed to work on build plan with the Fab ► By producing graphs or charts ► Understand special factors that affect the data ► Getting results by interpreting the data collected

17. Responding Time order # Response Time order # Response Time order # Response Time 1 21hrs 40mins 11 2hrs 25mins 21 5hrs 40mins 2 21hrs 40mins 12 2hrs 25mins 22 5hrs 10mins 3 20hrs 35mins 13 23hrs 10mins 23 5hrs 5mins 4 19hrs 35mins 14 23hrs 5mins 24 21hrs 5mins 5 21hrs 45mins 15 22hrs 25mins 25 21hrs 5mins 6 21hrs 45mins 16 22hrs 20mins 26 19hrs 55mins 7 22hrs 15mins 17 22hrs 20mins 27 19hrs 10mins 8 20hrs 45mins 18 5hrs 55mins 28 18hrs 30mins 9 24hrs 10mins 19 5hrs 45mins 29 18hrs 5mins 10 24hrs 05mins 20 5hrs 45mins 30 18hrs 5mins Responding time = CBA Responding time – CBA Receiving time

18. Histogram Avg Responding Time 0 - 5 hrs 2 5 - 10 hrs 6 15 - 20 hrs 6 20 - 25 hrs 16

19. Follow up calls / emails Between # of follow up emails / phone calls MondayTuesday Wednesda y ThursdayFriday Total/wee k Avg/wee k CBA and GBA 121582045911.8 GBA and PSP 181561235410.8 PSP AND BP 62741204 BP and Fab 34222132.6

20. Pareto Chart Focused Area: Communication and Process Flow between CBA and GBA

21. Matrix Diagram Interact with customer Review inventory Initiate production order Review production status Training CBA GBA PSP BP Fab Primary responsibilityResources CBA – Customer Business Analyst GBA – Geographical Business Analyst PSP – Product Supply Planner BP – Business Planner

22. Analyze Cause & Effect Diagram FMEA House of Quality

23. Long response time TimingPeople Communications Ordering Procedures Tools Time zone difference Inadequate training Training program Is not well developed Limited training budget System errors Lack of system maintenance Lack of labor resources Limited budget Time zone difference Long process flow Hierarchical decisions Bottleneck in process flow Heavy workload of staff Time zone difference Heavy loads of orders and changes from customers Long communication time between fab and BP Hierarchy decisions Inadequate staffing Limited budget Cost cutting Inefficient Analyzing Tool Difficult to interpret Outdated (manual) tools Inadequate staffing Lack of technology initiatives Limited budget Outdated (manual) tools Lack of system maintenance Nature’s creation Inadequate communication Media (between & within org.) Less transparency In data sharing Vertical decision making Outdated (manual) tools Redundancy in order processing Numerous processing steps Lack of technology initiatives Limited budget High mfg lead time Unscheduled Mfg Improper forecasting Lack of inventory holding Inadequate staffing Outdated forecasting tools Delayed communication down the line Improper capacity prediction Inefficient feedback tool

24. Root Causes in Fishbone Diagram ► Long Process Flow ► Lack of training ► Inefficient analyzing tool ► Lack of feedback / rating system ► Inefficient real time inventory system

25. FMEA

26. House of Quality

27. Improve PDCA Flow process diagram Communication Plan

28. PDCA - Plan Plan Execution Steps Metrics Expected Results Quick Response Program 1) Present program to all team managers and planners 2) Receive feedback or suggestions 3) Improve program and launch pilot 4) Pilot team records amount of time needed to respond and the number of error occuring -Responding Time (in min) / order -# of errors / day -decreased amount of responding time -decreased number of errors Automated commits Loading Program 1) Work with engineering team to create the tool 2) Pilot team to test the tool 3) Launch and train all counterparts 4) Receive internal feedback and customer rating - Internal and external rating and feedback - Higher rating from customer and employees Marketing Update Meeting 1) Setup time for Business Planners and Marketing Representatives to meet 2) Update each other on build plan vs. customers requirement 3) Suggestion and Feedback -Internal feedback -# of change requests - Decreased amount of change order requests

29. PDCA ► DO  Pilot team will be setup and test the program  Record the total time needed to respond to customer requests  Record the number of error / complaints that occur  Record the amount of change requests from customers ► Check  Compare actual results with our expected results  Find out the reasons behind ► Act  If actual = / better than expected, then standardize the process  Otherwise, determine root causes, improve the proposed process, try again!

30. Proposed Process Flow Diagram Customer’s order CBA receives orders CBA look at the automated Commit Loading Tool CBA books commits through the automated tool Warehouse Send goods out Customer receives orders CBA put not supported requests in the spreadsheet GBA access order forms from the shared drive Order form GBA collects data and create demand report PSP reviews order requests from GBA PSP works with BP to determine If immediate Support is allowed PSP sends support message to GBA PSP loads commits Into granting too GBA sends support message to CBA BP works with Fab on build plan changes Approval of support sent to PSP Approval of changes Proposed Processing Time Inventory Available: 7.5 days – 9 days Inventory Not Available: 20 days ½ days7 days 2 hours 11 days

31. Process Sigma Data considered to determine process sigma Data considered to determine process sigma Defect opportunities (O) Defect per opportunities (D) Customer request change 39 Missing information 10 Customer cancellation 7 Wrong information 3 Total number of defects 59 Average number of calls processed per week, N=100

32. Communication Plan RoleWho Main Concerns Communication Notes Team Manager Managers of CBA, GBA, PSP, BP, and Fab ► Re-organize job functions of their team members ► Project Presentation by Group Managers ► Open Forums for Q&A ► Progress Report every two weeks ► Communicates areas for improvement / business accomplishments ► Regular Project Update Meetings ► Lessons we learned Team Member CBA, GBA, PSP, BP, and Fab ► Work hours / benchmarks ► Connections with counterparts Team Coach Six Sigma Team ► Efficiency of the process flow Process Owners Superuser Reps ► Transaction from old process to new process Customers All customers ► Accurate shipping time ► Stable availability on Supply ► Improvement Proposal ► Reports on how they will benefit from it ► Recommendation or concerns

33. Control Process Sigma

34. Process Sigma – con’t Number of defect opportunities per unit O4 Number of units processed N100 Total number of defects made ( Including Rework) D59 Defect opportunities per unit. DPO= D/(N*O) 0.1475 Yield = (1-DPO)*100 85.25 Long-term process sigma 2.54 Actual Process Sigma 1.04

35. Process Sigma (Post- PDCA) Data considered to determine process sigma Data considered to determine process sigma Defect opportunities (O) Defect per opportunities (D) Customer request change 30 (From 39 to 30) Missing information 0 (From 10 to 0) Customer cancellation 4(From 7 to 4) Wrong information 0 (From 3 to 0) Total number of defects 34 Average number of calls processed per week, N=100

36. Process Sigma (Post- PDCA)– con’t Number of defect opportunities per unit O4 Number of units processed N100 Total number of defects made ( Including Rework) D34 Defect opportunities per unit. DPO= D/(N*O) 0.085 Yield = (1-DPO)*100 91.5 Long-term process sigma 2.875 Actual Process Sigma 1.375

37. Summary of Used Tools Stage Used Tools Define ► Charter ► CTQ Tree ► SIPOC Measure ► Data Collection ► Process Flow Diagram ► Histogram ► Pareto Chart ► Process Sigma Analyze ► Brainstorming ► Cause-and-Effect Diagram

38. Summary of Used Tools Stage Used Tools Improve ► FMEA ► Matrix Diagram ► Prioritization Matrix ► Matrix Diagram ► Process Sigma ► House of Quality Control ► Communication Plan

39. Conclusions

40. Appendix

41. Project Gantt Chart

42. Data Collection

43. Data Collection (contd.)

44. Pareto Chart Focused Area: Communication and Process Flow between CBA and GBA

45. Thank You Thank You