1. No category

CSUN
Engineering
Management
Six Sigma Quality
Engineering
Week 2
Introduction to Six Sigma
Macro model of Six Sigma Management
Chapters 1,2 & 3 Outline











Values of Six Sigma
Development & Timeline of Six Sigma Management
Benefits of Six Sigma Management
Voice Of the Process (VOP)
Variation in a Process
Voice Of the Customer (VOC)
Roles and responsibilities in Six Sigma Management
Technical terminology of Six Sigma Management
Six Sigma Methodology (DMAIC)
Six Sigma Macro Model (Dashboards)\
Six Sigma BB project presentation
Values of Six Sigma
Six Sigma is a process that enables companies to
increase profits dramatically by streamlining operations,
improving quality, and eliminating defects or mistakes in
everything a company does, from raw materials to finish
goods. A Six Sigma process generates a defect probability
of 3.4 parts per million (PPM).

Key activities in Six Sigma are:
1.
2.

Understanding customer needs (in quantifiable terms)
Translating the needs into the measurable outcomes
Key objectives in Six Sigma are:
1.
2.
Understanding & measuring the process inputs
Looking at the root causes of variation
The Focus of Six Sigma
Y=
•
•
•
•
•
•
Y
Dependent
Output
Effect
Symptom
Monitor
f (X)
n
n
n
n
n
n
X1 . . . X N
Independent
Input-Process
Cause
Problem
Control
If we are so good at X, why do we constantly test and inspect Y?
Six Sigma Companies
s
• Allied Signal
Nonconformities
PMO
2
308,770
3
66,811
• General Electric
4
6,210
• John Deere & Co
5
233
• Lockheed Martin
6
• Boeing
• Caterpillar
3.4
• Motorola
• Polaroid
• Sony
Process
Capability
Parts per Million
Opportunities
The sigma scale
of measure is
perfectly
correlated to
such
characteristics
as defects-perunit, parts-per
million
defective, and
the probability
of a failure/error.
Timeline of Six Sigma Management
1978
Poor Quality!!! Motorola sells it TV business. When asked why,
VP states “QUALITY STINKS!”
•Did not co-operate across division
•Ignored customer requirements
•Diluted culture with new employees without training
•Did not realize that Sigma had limitations
Was an internally focused program
Timeline of Six Sigma Management
1980
Corporate Quality Officer appointed
1981
Training Center established
1985
Began to measure total defects/unit
1987
Corporation adopts Six Sigma program, Six Sigma goal to be
achieved by 1992
1988
Motorola wins Malcolm Baldridge Award at the corporate level
1990
Six Sigma Research Institute formed.
1992
Blackbelt infrastructure developed and implemented at
Motorola, Kodak, TI, IBM, and Digital.
1993
Motorola hires 40,000 new employees and removes the 40
hour quality training program. Revenue growth averages 27%
growth.
Timeline of Six Sigma Management
1994
Motorola owns 60% of the wireless phone market. Six Sigma
Academy formed.
1998
Motorola owns 34% of the wireless phone market. Revenue
growth is 5%. Shareholder value is 1%; it had averaged 54% in
previous 3 years.
Six Sigma Companies
•Produce superior, reliable, and customer-satisfying
products…
• Are faster, better, cheaper, and more efficient than their
competitors…
Benefits of Six Sigma Management









Improve process flows
Reduce total defects
Reduce process cycle time
Enhance Customer and Employee satisfaction
Help reduce inventory
Help improve capacity and output
Help increase quality and reliability
Help decrease product costs
Help improve product delivery to custumer
Voice Of the Process (VOP)

A process is a collection of interacting components that
transform inputs into outputs toward a common aim.
Inputs
Process
Components
Machines
Operators
Assembly
Test
Final Inspection
Ship to Customer
Outputs
Customer receives
product
Variation in a Process
• What is Variation?
• The enemy of certainty
• The enemy of customer satisfaction
• Drives the unknown
• Adds to customer (and employee) disbelief
• Adds to lack of confidence in the ability of processes
• Increases risk that a result will not meet expectations
• Variation is a driver of defects
For any process, variation is the main reason
for poor performance...
Variation is the key focus of Six Sigma
Variation in a Process

Feedback Loops
• A feedback loop relates information about outputs from any stage
or stages back to another stage or stages to make an analysis of
the process.
Inputs
Process
Feedback Loop
Outputs
Voice Of the Customer (VOC)
• It is vital that we understand and are able to quantify what is
critical to the customer's satisfaction.
LSL
No Good
Loss
Unhappy
Customer
USL
Good
No Loss
Nominal Value
No Good
Loss
Unhappy
Customer
Voice Of the Customer (VOC)
•Critical to Customer’s satisfactions:
• High quality
• Lowest possible price
• Products deliver on time
Therefore
Producers should bring forth these products in a
manner that minimizes cost and cycle time and
maximizes profit
Voice Of the Customer (VOC)
• We need to ask ourselves...
•How easy it is for our customers to do business with us?
•Are we making assumptions about what customers need?
•How often do we ask our customers (internal and
external) what they need?
•Is this information properly communicated throughout our
organization.
We must place a value and emphasis on the
customer, take measurements and measure inputs,
not just outputs
Customer Satisfaction?
Do you have dissatisfied customers?
• Historically 1 in 25 unsatisfied customers express their
dissatisfaction
• 1 unsatisfied customer typically tells 7-16 others.
• It cost about five times more to attract a new
customer as it does to keep an old one.
Roles and responsibilities in Six Sigma
Management

Senior Executive
•
Provides the impetus, direction & alignment necessary for Six Sigma
ultimate success. Senior Executive should:
1.
2.
3.
4.

Study Six Sigma management
Link company’s objectives to Six Sigma projects
Champion Six Sigma projects
Constantly review Six Sigma projects progress
Executive Committee Member
•
They are the top management of an organization. Executive Committee
Members should:
1.
2.
3.
4.
5.
Deploy Six Sigma throughout the organization
Prioritize and manage Six Sigma portfolio
Assign champion, BB and GB to Six Sigma projects
Remove barriers to Six Sigma management
Provide resources for Six Sigma management
Roles and responsibilities in Six Sigma
Management

Champion
•
Take a very active sponsorship and leadership role in conducting and
implementing Six Sigma projects. Champions should:
1. Identify the project on the organizational dashboard
2. Provide an ongoing communication link between the project team and
Executive committee
3. Keep the team focused on the project by providing direction and guidance
4. Assure that Six Sigma methods and tools are being used in the project

Master Black Belt
•
Takes a leadership role as keeper of the Six Sigma process and advisor
to executives or business unit managers. Master Black Belt should:
1. Counsel senior executives and business unit managers on Six Sigma
management
2. Continually improve and innovate the organization’s Six Sigma process
3. Apply Six Sigma across across both operations and transactions-based
process
4. Mentor Green Belts and Black Belts
Roles and responsibilities in Six Sigma
Management

Black Belt
•
Is a full time change agent and improvement leader. Black Belts
should have the following characteristics:
1.
2.
3.
4.
•
Technical and managerial process improvement/innovation skills
Understand the psychology of individuals and teams
Not intimidated by upper management
Has a customer focus
The responsibilities of a Black Belt include:
1. Communicate with the champion and process owner about progress
of the project
2. Help team members design and analyze experiments
3. Provide training in tools and team functions to project team members
4. Coach Green belts leading projects limited in scope
Roles and responsibilities in Six Sigma
Management

Green Belt
•
Is an individual who works on projects part time, either as a team
member for complex projects or as a project leader for simpler projects.
Green Belts have the following responsibilities:
1.
2.
3.
4.

Define & review project objective with project’s champion
Facilitate the team through all phases of the project
Analyze data through all phases of the project
Train team members in the use of Six Sigma tools and methods through all
phases of the project
Process Owner
•
Is the manager of a process. The process owner should be identified and
involved in all Six Sigma projects relating to the process owner area. A
process owner has the following responsibilities:
1. Empower employees to follow and improve best practice methods
2. Accept and manage the improved process after completion of the Six Sigma
project
3. Understand how the process works, the capability of the process, and the
relationship of the process to other processes in the organization
Technical terminology of Six Sigma
Management





Critical-To-Quality (CTQ): Is a measure of what is important to a
customer.
Defect: Is a nonconformance on one of many possible quality
characteristics of a unit that causes customer dissatisfaction
Defects per Million opportunities (DPMO): A quality metric often
used in the Six Sigma process. It is calculated by the number of
defects observed divided by the number of opportunities for
defects compared to 1 million units.
Yield: Is the proportion of units within specification divided by
the total number of units.
Rolled Throughput Yield (RTY): Is the product of the yields from
each step in a process.
Six Sigma Methodology (DMAIC)
Project Name:
DMAIC PROCESS AND PHASE GATE
Define
Met Define Phase Criteria
Estimated
Actual
completion completion
date
date
Status
No
 Define Customers and Requirements (CTQs)
 Develop Problem Statement, Goals and Benefits
 Identify Champion, Process Owner and Team
 Define Resources
 Evaluate Key Organizational Support
 Develop Project Plan and Milestones
 Develop High Level Process Map
Measure
Met Measure Phase Criteria
 Define Defect, Opportunity, Unit and Metrics
 Detailed Process Map of Appropriate Areas
 Develop Data Collection Plan
 Validate the Measurement System
 Collect the Data
 Begin Developing Y=f(x) Relationship
 Determine Process Capability and Sigma Baseline
No
Six Sigma Methodology (DMAIC)
Analyze
Met Analyze Phase Criteria
No
 Define Performance Objectives
 Identify Value/Non-Value Added Process Steps
 Identify Sources of Variation
 Determine Root C ause(s)
 Determine Vital Few x's, Y=f(x) Relationship
Improve
Met Improve Phase Criteria
No
 Perform Design of Experiments
 Develop Potential Solutions
 Define Operating Tolerances of Potential System
 Assess Failure Modes of Potential Solutions
 Validate Potential Improvement by Pilot Studies
 C orrect/Re-Evaluate Potential Solution
Control
Met Control Phase Criteria
 Define and Validate Monitoring and C ontrol System
 Develop Standards and Procedures
 Implement Statistical Process C ontrol
 Determine Process C apability
 Develop Transfer Plan, Handoff to Process Owner
 Verify Benefits, C ost Savings/Avoidance, Profit Growth
 C lose Project, Finalize Documentation
 C ommunicate to Business, C elebrate
No
Six Sigma Macro Model (Dashboards)
•A dashboard is a tool used by management to clarify and assign
accountability for the “critical few” key objectives, key indicators,
and project tasks needed to steer an organization toward its mission
statement.
•There are four basic categories of dashboard key objectives:
•Financial Key Objectives
•Process Improvement Key Objectives
•Innovation/Customer Satisfaction Key Objectives
•Employee Growth and Development Key Objectives
Six Sigma Macro Model (Dashboards)
Los Angeles
2006
STAKEHOLDER
Greater than 10%
from Plan
Between 10% and
5% from Plan
Within 5% of
Plan
KEY
MEASUREMENT
DIAGNOSTIC
MEASUREMENT
2005 Actual
Cumulative Sales
Growth Over Market
105792
CFROGC
20.9%
SHAREHOLDERS
DOH
133
DSO
45
DPO
27
Capital
Expenditures
($ 000)
1,517
Operating Margin
12.0%
Productivity
-3.3%
Material Cost Out ($
000's)
Factory Cost Out ($
000's)
Lean Score
$2,320
$1,000
3.5
Actual/
Plan
JAN
FEB
MAR
APR
Cum Actual
9,080
18,847
29,546
40,519
Cum Plan
Actual
Plan
Actual
Plan
Actual
Plan
Actual
Plan
9,702
6.3%
21.9%
150
139.5
41.9
43.3
47
50
19,433
28.4%
19.1%
152.6
137.5
46.8
43.5
57
50
29,164
22.0%
22.8%
140.9
136.3
48.6
43.5
78
50
38,846
23.1%
16.9%
146.3
133.5
47.4
44
42
50
Cum Actual
3
501
1,701
Cum Plan
Cum Actual
Cum Plan
Actual
Plan
Cum Actual
Cum Plan
Cum Actual
Cum Plan
Actual
Plan
3
11.4%
13.4%
2.0%
0.7%
$653
$160
$46
$26
3.5
3.5
389
12.2%
14.0%
0.7%
0.7%
$1,092
$265
$76
$39
3.5
3.5
409
13.0%
13.2%
1.2%
0.7%
$1,530
$370
$81
$52
3.1
3.5
2.3%
14.5%
0.5%
0.7%
$280
$105
$26
$13
3.5
3.5
Six Sigma Macro Model (Dashboards)
Product OTD
CUSTOMERS
62.1%
Past Due $
($ 000's)
$7,213
MPS OTD
14.6%
Supplier OTD
57.3%
3 Month Rolling
Product Quality
(DPPM)
Dev. Program
Milestone OTD
0.0%
80.0%
Safety TCIR
Spend/Strategic
Supplier ($000)
COMMUNITY
Environ Audit Action
Item OTD
Charitable
Contributions
($ 000's)
63.7%
63.0%
$8,100
$7,500
6.2%
0.0%
53.5%
58.0%
1534
60.6%
65.0%
$6,973
$7,000
7.6%
10.0%
60.0%
59.0%
1783
65.6%
68.0%
$5,886
$6,500
4.8%
11.0%
55.4%
60.0%
2000
Plan
Actual
3000
8765
3000
8488
3000
18974
3000
1087
Plan
Actual
Plan
12000
75.0%
75.0%
10000
66.7%
75.0%
9500
42.9%
75.0%
9000
66.7%
75.0%
0.0%
0.0%
0.0%
0.0%
8.8
5.0
0.0%
4.7
4.0
0.0%
2.8
2.9
0.0%
10.0%
10.0%
2.3
2.7
Actual
Plan
$0
$0
$0
$0
Actual
Plan
Cum Actual
0
$648
100.0%
1
$1,195
100.0%
1
$1,893
100.0%
1
$2,406
Cum Plan
$708
$1,416
$2,124
$2,832
9594
50.0%
OCA Action Item
OTD
Employee Survey
Action Item OTD
SUPPLIERS
56.4%
60.0%
$8,262
$8,000
13.1%
0.0%
60.5%
57.0%
2012
2706
3 Month Rolling
Supplier Quality
(DPPM)
EMPLOYEES
Actual
Plan
Actual
Plan
Actual
Plan
Actual
Plan
Actual
2.0
$0
1
Actual
Plan
Actual
Plan
Actual
Plan
$8,311
Plant Performance Dashboard
Supplier Failure
ACTION PLANS
F o c u s Ar e a s
Focus Area
Ac tio n s
Owner
H igh volum e, low dollar s uppliers lik e C havers G as k et and B ora are s hipping early . C alled
ow ners to ens ure they unders tand the new five day early , on tim e delivery w indow .
M etric early toleranc e c hanged from infinite to 5 day s . P olic y enforc em ent
D u e D a te
O ngoing
50% c om plete
11/30/2004
U .S . B all C orp. s toc k ing program (another high volum e low c os t s upplier)
S upplier F ailure
R ationaliz ing s upplier bas e (A lpine, W C L, B levins , V ik ing)
P lanning P roblem
S uppliers now have forw ard vis ibility for s ub-c ontrac t P O 's to plan their c apac ity needs .
C M C added as C ertified S upplier - 62% of C M C parts are now s hip to s toc k and a thrid of all
rec iepts are s hip to s toc k .
T. M endoz a/
Q uality m gr.
T. M endoz a
Owner
Due date
See suplier OTD actions
Planning Problem
Review and measure exceptions message resolution in each
of the focused factories
Lebetsamer/ McBroom
On-going
Access database for planners backlog
Lebetsamer/ McBroom
On-going
Support of schedule tool
Lebetsamer/ McBroom
Complete
Re-organization of manufacturing and supply chain.
Harris
Complete
C om plete
M endoz a
T. M endoz a
Actions
Late Supplier
M endoz a
S upplier F ailure
Dec
0.173
Goal
BoeingDef.
Supplier Failure
Owner
Due Date
Boeing of Philadelphia
Housings are being inspected and reworked to B/P. Laps are in process at
Dow.
Shaham
US Govt Spares
Additional focus provided by assigning a government spares champion
(Reduced from $3.3M down to $1.3M)
Developed a backlog-to-customer PO reconciliation process. (Our backlog
did not match Gulfstream's PO dates).
Dumlao
On-going
Healy
on-going backlog
scrub
Gulfstream
2/1/2005
V 22 s ourc e ins pec tion at Dow
M aintain s upplier c orrec tive ac tion s y s tem
V 22 s ourc e ins pec tion at TP T
S QE s
Supplier
DOH
$10,000,000
YTD
Equip
Malfunction
Monthly
Comparative
Benchmark
Establish Final Insp C/A Feedback Process
Expe cte d Re s ults
Re s pons ible
Ope n
Due Date
Status
1
Reduce errors
Team
Jun-04
Nov-04
Open
YTD
Rec'd Early
Supplier Failure
Revision & Training f or QCD 191, Final Insp
2
Work Instructions
Team
Jul-04
Nov-04
Open
Establish DPPM by Focus Factory
3
Focus on key areas
QE
A pr-04
Oct-04
Open
Ac tio n s
Inv. Type
Owner
H igh volum e, low dollar s uppliers lik e C havers G as k et and B ora are s hipping early . C alled
ow ners to ens ure they unders tand the new five day early , on tim e delivery w indow .
M endoz a
R ec eived early
R ec eived early
M etric early toleranc e c hanged from infinite to 5 day s . P olic y enforc em ent
M endoz a
S upplier F ailure
U .S . B all C orp. s toc k ing program (another high volum e low c os t s upplier)
S upplier F ailure
R ationaliz ing s upplier bas e (A lpine, W C L, B levins , V ik ing)
P lanning P roblem
S uppliers now have forw ard vis ibility for s ub-c ontrac t P O 's to plan their c apac ity needs .
C M C added as C ertified S upplier - 62% of C M C parts are now s hip to s toc k and a thrid of all
rec iepts are s hip to s toc k .
D u e D a te
C om plete
T. M endoz a
Note:
Note: 54
54 Returns
Returns for
for Oct
Oct 2004.
2004.
33
33 Units
Units determined
determined to
to be
be Customer
Customer Responsibility
Responsibility or
or No
No Fault
Fault Found
Found
17
17 Units
Units not
not evaluated
evaluated as
as of
of the
the date
date of
of this
this reporting
reporting
44 Units
Units were
were determined
determined to
to be
be Eaton’s
Eaton’s Responsibility
Responsibility
DPPM
DPPM Calc.
Calc. == 21/6685
21/6685 ** 1,000,000
1,000,000 == 3141
3141
Units
Units determined
determined to
to be
be Customer
Customer Resp.
Resp. or
or No
No Fault
Fault Found
Found not
not used
used in
in calculation
calculation
Equip
Malfunction
Due Date
Status
Team
Jun-04
Nov-04
Open
Com plete
Revision & Training f or QCD 191, Final Insp
2
Work Instructions
Team
Jul-04
Nov-04
Open
Establish DPPM by Focus Factory
3
Focus on key areas
QE
A pr-04
Oct-04
Open
Ongoing
Com plete
Note:
Note: 54
54 Returns
Returns for
for Oct
Oct 2004.
2004.
33
33 Units
Units determined
determined to
to be
be Customer
Customer Responsibility
Responsibility or
or No
No Fault
Fault Found
Found
17
17 Units
Units not
not evaluated
evaluated as
as of
of the
the date
date of
of this
this reporting
reporting
44 Units
Units were
were determined
determined to
to be
be Eaton’s
Eaton’s Responsibility
Responsibility
DPPM
DPPM Calc.
Calc. == 21/6685
21/6685 ** 1,000,000
1,000,000 == 3141
3141
Units
Units determined
determined to
to be
be Customer
Customer Resp.
Resp. or
or No
No Fault
Fault Found
Found not
not used
used in
in calculation
calculation
Ongoing
Health &Safety-Los Angeles, CA
&Safety
&Safety-Los
Monthly
Comparative
Benchmark
Total Case Incident Rate (TCIR)
Lost Workday Case Incident Rate (LWCIR)
Favorable
Direction
Goal
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
4.00
Actual
Actual
2.00
Goal
Goal
0.00
2003 Jan
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Planning Problem
ACTION PLANS
F o c u s Ar e a s
Supplier
Ope n
Reduce errors
ACTION PLANS
Is s ue #
Operator Error
Re s pons ible
1
Goal
0.0%
ACTION PLANS
Action Ite m s
Action Ite m s
20
0
20 2
0
20 3
04
Ja
n
Fe
b
M
ar
Ap
M r
a
Ju y
ne
Ju
ly
Au
Se g
pt
O
ct
No
v
D
Be C e c
nc o m
hm p
ark
O
ct
No
v
Sep
10.0%
De
c
Co
m
p
Bm
k
ar
ay
Ju
n
Apr
Ju
l
Aug
M
M
02
20
Feb
$0
20.0%
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
$15,000,000
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
$5,000,000
30.0%
Ja
n
40.0%
Inventory $
50.0%
Goal
03
Actual
60.0%
Operator Error
$20,000,000
04
70.0%
60.0%
20
80.0%
$25,000,000
Instruction Error
Expe cte d Re s ults
Establish Final Insp C/A Feedback Process
MONTHLY DOH PERFORMANCE
MONTHLY INVENTORY PERFORMANCE ($M)
70.0%
20
90.0%
Instruction Error
Technical
Problem
Is s ue #
Ongoing
Inventory and DOH-Los Angeles, CA
DOH
DOH-Los
REASON CODES
100.0%
Technical
Problem
M endoz a/
Quality m gr.
K arl Fis c her,
S QE
Continue S upplier Counc il es tablis hed, 1s t m eeting M arc h, '04
Productivity-Los Angeles, CA
Productivity
Productivity-Los
MONTHLY PERFORMANCE
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Jan
Feb
20
03
Jan
Fe
b
Ma
r
Ap
r
Ma
y
Jun
Ju
l
Au
g
Se
p
Oc
t
No
v
De
c
Goal
Goal
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
ACTION PLANS
M endoz a/
Quality m gr.
S teve B rak ebill,
S QE
K arl Fis c her,
S QE
Rationaliz ing s upplier bas e
S upplier Failure
Continue Certified S upplier P rogram rollout
O ngoing
C om plete
2003
Actual
TechnicalProblem
C om plete
M endoz a
REASON CODES
Favorable
Favorable
Direction
Direction
Actual
ACTION PLANS
Actions
$30,000,000
6000
5000
4000
3000
2000
1000
0
responsibility,
responsibility, affect
affect Supplier
Supplier
DPPM.
DPPM. Therefore,
Therefore, supplier
supplier
DPPM
DPPM is
is the
the result
result of
of “Supplier
“Supplier
Failure”.
Failure”.
50.0%
Favorable
Favorable
Direction
Direction
6000
5000
4000
3000
2000
1000
0
Note:
Note: All
All units
units rejected
rejected from
from
supplier,
supplier, coded
coded as
as supplier
supplier
0.0%
20
03
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
De
c
Nov
Oct
Sep
Aug
Jul
Jun
0.243
REASON CODES
MONTHLY PERFORMANCE
100.0%
Actual
20
03
Jan
Fe
b
Ma
r
Ap
r
Ma
y
Jun
Ju
l
Au
g
Se
p
Oc
t
No
v
De
c
0.385
35000
30000
25000
20000
15000
10000
5000
0
$0.00
BoeingPH USGov't Spares Gulfstream B.F.Goodrich
Quality Index(Customer
-Los Angeles, CA
Customer DPPM
DPPM))-Los
MONTHLY PERFORMANCE
$1.00
1.314
ACTION PLANS
Focus Areas
R ec eived early
Goal
1.487
Planning Problem
ACTION PLANS
R ec eived early
$1.50
$0.50
May
Technical PlanningProblem
Problem
Apr
LateFactory
Mar
SalesOrder
Problem
Feb
Dec
Jul
Nov
Supplier
Performance
$2.00
Actual
Plant Quality (Customer
-Los Angeles, CA
Customer DPPM
DPPM))-Los
REASON CODES
MONTHLY PERFORMANCE
2003
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Rec'd Early
Jun
0
Oct
0.0%
50
Goal
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Jan
Actual
2003
10.0%
Sep
Dec
Jun
Oct
Nov
Sep
Jul
Aug
Mar
Jan
Feb
Apr
May
20.0%
Aug
30.0%
Apr
40.0%
May
Goal
60.0%
Supplier Quality (DPPM)-Los Angeles, CA
(DPPM)
(DPPM)-Los
CUSTOMERS – AUGUST 2004
MONTHLY PERFORMANCE ($M)
REASON CODES
100
Jan
70.0%
50.0%
Mar
80.0%
Actual
Feb
60.0%
90.0%
Customer Past Due-Los Angeles, CA
Due
Due-Los
REASON CODES
MONTHLY PERFORMANCE
100%
95%
90%
85%
80%
75%
70%
65%
60%
70.0%
100.0%
2003
On-Time Delivery To Request-Los Angeles, CA
On
Request
On-Time
Request-Los
REASON CODES
MONTHLY PERFORMANCE
2003
Supplier to Plant Delivery-Los Angeles, CA
Delivery
Delivery-Los
T. M endoz a/
Q uality m gr.
T. M endoz a
O ngoing
50% c om plete
11/30/2004
O ngoing
C om plete
M endoz a
C om plete
WIP
Action items
DexM Kanban, Vendor Managed
Inventory, Adding an additional 300 parts
to the program
Lead-time Reductions
Obsolete and Excess disposal
Re- alignment of schedule for purchased
and manufactured parts for year end.
Bring in only what is needed.
Status
In progress
Results To Date
100K reduction - slated for Dec.6th '04.
ACTION PLANS
A ctio n Ite m s
Is s u e #
ESP BOS has dev eloped ac tion plan
BOS team has prioritiz ed ESP elements
Ongoing
Ongoing
Ongoing
3400 Lead-times reduced
1.7M with expected additional 250K by year end.
964k moved to 2005 with an additional 200k by
year end
Corporate planning to dev elop tec h. Training f or 2005'
Inc lude Ergonomic s /repetitiv e motion s tudy
Building Saf ety w ork order program
Dev eloping s af ety SOP f or all proc edures
Exp e cte d Re s u lts
R e s p o ns ib le
ac tions to c omplete ESP
BOS team
Work key is s ues f irs t
BOS team
Du e Date
Mar-04
A pr-04
Statu s
Done
Done
Conduc t tec hnic al training
RNR
A pr-05
Corporate plans f or 2005
improv e ergonomic s
RNR
A pr-05
Corporate plans f or 2005
priortiz e s af ety w ork orders
RNR
Dec -04
Starting to trac k
Nov -04
Working w ith produc t audit
group
A ll proc eedures w ill inc lude s af ety
RNR
Supplier to Plant Delivery
-Los Angeles, CA
Delivery-Los
REASON CODES
MONTHLY PERFORMANCE
70.0%
100.0%
60.0%
90.0%
80.0%
70.0%
Actual
50.0%
Goal
40.0%
30.0%
20.0%
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
2003
60.0%
10.0%
0.0%
Rec'd Early
Supplier Failure
Planning Problem
ACTION PLANS
F o c u s Ar e a s
Ac tio n s
Owner
M endoz a
R ec eived early
H igh volum e, low dollar s uppliers lik e C havers G as k et and B ora are s hipping early . C alled
ow ners to ens ure they unders tand the new five day early , on tim e delivery w indow .
R ec eived early
M etric early toleranc e c hanged from infinite to 5 day s . P olic y enforc em ent
M endoz a
S upplier F ailure
U .S . B all C orp. s toc k ing program (another high volum e low c os t s upplier)
S upplier F ailure
R ationaliz ing s upplier bas e (A lpine, W C L, B levins , V ik ing)
P lanning P roblem
S uppliers now have forw ard vis ibility for s ub-c ontrac t P O 's to plan their c apac ity needs .
C M C added as C ertified S upplier - 62% of C M C parts are now s hip to s toc k and a thrid of all
rec iepts are s hip to s toc k .
D u e D a te
C om plete
T. M endoz a
O ngoing
50% c om plete
11/30/2004
T. M endoz a/
Q uality m gr.
T. M endoz a
O ngoing
C om plete
M endoz a
C om plete
Questions? Comments?