ISE 250 Optimization of Lead Time for XYZ Corp. -Dr. Baruch Saeed

1. ISE 250Optimization 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. Charter SIPOC CTQ Tree Define Brainstorming Process Flow Diagram Flow Chart Project Gantt Chart

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

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

7. Charter

8. Charter – con’t

9. Project Implementation Gantt Chart

10. CTQ Tree 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 CTQ Tree is used for · Unspecified customer requirements· Complex, broad needs NEED DRIVERS CTQ TREE New Decision Support GUI tools that improve the ability to fine-tune schedules to give better conformance to overall plans Enhanced scheduling Implementation of Business Intelligence Applications Making right decision in shortest time To reduce the lead time Build local sales office to replace existing single-site Faster and better communication lines Implementation of faster and multi-faceted Collaborative communication systems such as Telephone, mobile phone, internet chat Faster production of schedule More time for alternative scenarios of production, leading to better schedules and improved productivity

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

12. Current Process Flow Diagram 1 day ½ day ½ day Customer’s order CBA receives orders CBA sends order to GBA GBA accumulates and enters all orders into one spreadsheet GBA sends order form to PSP PSP receives order form Order form 1 day 1 day 7 days PSP checks inventory PSP sends Out support message to GBA PSP loads commits into granting tool GBA sends Support Message to CBA CBA receives support message & books commits for customers Warehouse sends goods out Goods are boxed Customer Receives orders Work with BP If supply is not available BP works with the Fab on build plan changes Change approval sends to PSP Approval of changes 21 days Current Processing Time Inventory Available: 11 days Inventory Not Available: 32 days PSP – Product Supply Planner BP – Business Planner CBA – Customer Business Analyst GBA – Geographical Business Analyst

13. Process Flow Diagram

14. Data Collection Histogram Measure Pareto Chart Process Sigma

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

16. Data-Collection Plan Form

17. Responding Time Responding time = CBA Responding time – CBA Receiving time

18. Histogram

19. Follow up calls / emails

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

21. Matrix Diagram CBA – Customer Business Analyst GBA – Geographical Business Analyst PSP – Product Supply Planner BP – Business Planner Primary responsibility Resources

22. Cause & Effect Diagram Analyze House of Quality FMEA

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

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. PDCA Flow process diagram Improve Communication Plan

28. PDCA - Plan

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 ½ days 7 days 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 2 hours 2 hours 2 hours CBA put not supported requests in the spreadsheet GBA access order forms from the shared drive GBA collects data and create demand report PSP reviews order requests from GBA Order form 2 hours 2 hours 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 Proposed Processing Time Inventory Available: 7.5 days – 9 days Inventory Not Available: 20 days BP works with Fab on build plan changes Approval of support sent to PSP Approval of changes 11 days

31. Data considered to determine process sigma Process Sigma Average number of calls processed per week, N=100

32. Communication Plan

33. Control Process Sigma

34. Process Sigma – con’t

35. Process Sigma (Post- PDCA) Data considered to determine process sigma Average number of calls processed per week, N=100

36. Process Sigma (Post- PDCA)– con’t

37. Summary of Used Tools

38. Summary of Used Tools

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