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Drum Buffer Rope Application at Intel Drum Buffer Rope Application at Intel Warehousing Warehousing
SCOTTEDWARDS
A case study about how a team from Intel Corporation was able to improve performance in a
finished goods warehouse operation by applying Th f C t i t D B ff RTheory of Constraints Drum-Buffer-Rope
CUSTOMER FULFILLMENTPlanning and Logistics Group
Organizations everywhere encounter challenges to improveimprovetheir performanceperformancepp
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Process improvement professionalsprofessionalsmust apply effective concepts to improveimprove performancep pp p
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Organizations are reluctantreluctant to changechange or try new things
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You want your organization’s performanceperformance to improveimprove
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Apply key conceptskey concepts from myApply key conceptskey concepts from my experienceexperience in implementing DBR implementing DBR in a warehouse operation to dramatically improvedramatically improve performancedramatically improve dramatically improve performance
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Key Conceptsy p
1.1. TimelyTimely and accurate datadata1.1. TimelyTimely and accurate datadata
2.2. UtilizeUtilize existing continuous improvement continuous improvement programs & methods
33 TrainingTraining through “GameGame” exercises3.3. TrainingTraining through GameGame exercises
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Worldwide Manufacturing OperationWorldwide Manufacturing OperationWarehouse NetworkWarehouse Network
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Intel’s Supply ChainIntel’s Supply Chain
SupplierSupplier FactoryFactory ShipmentShipmentDeliveryDelivery
FabFab WarehouseWarehouseOperationsOperations
CustomerCustomer
OperationsOperations
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Warehouse OperationWarehouse Operation
FACTORYFACTORY ShipmentShipmentDeliveryDelivery
Receiving InventoryStorage
Placement Order Pick OrderStaging
ProcessingPartial/Partial/
CombineCombine Pack Label
ProcessingLine
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1. DataData
Provide a timely and accurateProvide a timely and accurate measurement system to assess performanceperformance
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Demonstrate immediateimmediate impactp
Cycle time / Hour
Date=08/16/2006
D 08/17/2006
7
8
9
10
6
7
Cycle time / Hour
Date=08/17/2006
3
4
5
6
Mea
n(C
T)
4
5
ean(
CT)
0
1
2
-5 0 5 10 15 20Hour
1
2
3Me
Hour
05 10 15 20 25
Hour
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SPC and Buffer ReportsSPC and Buffer Reportspp
Cycle Time Cycle Time Control ChartControl Chart
Buffer ReportBuffer Reportu e epo tu e epo t
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2. Continuous improvementContinuous improvementpp
Utilize existing process improvementUtilize existing process improvement methods already in place or more fully understood, use the dataunderstood, use the data
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“Lean” (VSM, Waste elimination)( , )
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DMAIC
DD – Identify constraint 4 86885y
MM – Set baseline
AA D t i k i bl th t
Cycl
eTi
me
(Day
s)
4.86885
0.27381
1.828465±0.2982
2 4 hAA – Determine key variable that impact constraint
l d b l5
6
)
1
2 4
High
Low
II – Apply DBR, reduce variability
CC – Sustain performance (SPC)0
1
2
3
4
Cyc
le T
ime
(hou
rs
-1
0
2 4 6 8 10 12 14 16 18 20 22 24 26Sample
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3. Games
Use “Game” or simulation trainingUse Game or simulation training methods to introduce power of DBR and turn skeptics into believersturn skeptics into believers
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Drum Drum –– Buffer Buffer –– RopeRopepp
45* 75 25 30 50 25
A B C DProcess step: E
* Rate (e.g. orders per hour)
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Rate (e.g. orders per hour)
Simulation Set Upp7 Players:1 Ground Controller1 Ground Controller5 MS (1 per process)1 Flow Control Monitor
PICK PPR Partial/Comb. Pack Label FCMGC
PROCESS DNs
CHARTDATA
RELEASEDNs
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Simulation ExampleSimulation Examplepp
With DBR
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Immediate ImplementationImmediate Implementationpp
Buffer Calculation ToolBuffer Calculation Tool
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ResultsResults
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Oneway Analysis of REPACKFINISH By Implementation / DemandOneway Analysis of Cycle Time (hours) By Implementation
Order Processing Cycle Time Improvement
KFI
NIS
H
40
50
60
Oneway Analysis of REPACKFINISH By Implementation / Demand
e (h
ours
)
15
20
25
Oneway Analysis of Cycle Time (hours) By Implementation
RE
PA
CK
0
10
20
30
All Pairs
Cyc
le T
ime
0
5
10
All Pairs (1) Before / High (1) Before / Low (2) After / High
Implementation / Demand
All PairsTukey-Kramer 0.05
Missing Rows 235
A l i f V i
Oneway Anova
(1) Before (2) After
Implementation
All PairsTukey-Kramer 0.05
S DF S f S M S F R ti P b > F
Analysis of Variance
Oneway Anova
Implementation / DemandErrorC. Total
Source 2
2712 2714
DF 17955.96 183746.69 201702.65
Sum of Squares 8977.98 67.75
Mean Square132.5101
F Ratio <.0001Prob > F
Analysis of Variance
Means and Std Deviations
ImplementationErrorC. Total
Source 1
191 192
DF 72.4485
1257.4650 1329.9135
Sum of Squares 72.4485 6.5836
Mean Square 11.0044
F Ratio 0.0011Prob > F
Level Number Mean Std Dev Std Err Mean Lower 95% Upper 95%
Means and Std Deviations
Avg Cycle Time (pick to repack finish) reduction ~43% (~61% St dev)
(1) Before / High(1) Before / Low(2) After / High
Level 1032 1360 323
Number 14.8605 10.1691 16.4025
Mean 8.3681 7.2929 11.0433
Std Dev0.260490.197760.61447
Std Err Mean 14.349 9.781 15.194
Lower 95% 15.372 10.557 17.611
Upper 95%(1) Before(2) After
169 24
4.28254 2.42583
2.70792 1.05394
0.208300.21513
3.8713 1.9808
4.6938 2.8709
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Avg Cycle Time (pick to repack finish) reduction 43% ( 61% St dev)
Avg Hourly Throughput Increase (DNs/hour) ~10%
Total Warehouse Cycle Time Improvement
Day
s) 3
3.5
4
OPD Weekly Average Cycle Time(DN Create to AGID)
Cyc
le T
ime
(D
0.5
1
1.5
2
2.5
Al l P i2.5
3
3.5
4
4.5
(D
ays)
(1) Before (2) After
Impleme ntation
Al l Pai rsTukey-Kram er 0.05
Impleme ntationSource
1DF
10.1753 54Sum o f Squares
10.1754M ean S quare
32.1509F Rati o
<.0001Prob > F
Analysis of Varianc e
0.5
1
1.5
2
2.5
Cycle
Tim
e
C. T otal 40 22.5183 70
(1) Before(2) After
Level 33
8
Num ber 2.654031.39694
M ean0.5753060.500250
Std Dev0.100150.17686
Std E rr M ean 2.45000.9787
Lower 95% 2.85 1.81
Upper 95
Means a nd Std Deviations
ErrorC. T otal
39 40
12.3430 17 22.5183 70
0.31650
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Work Week
Before OIM OIM
Avg Cycle Time reduction ~48% (~14% St dev)
~1.25 day total reduction in inventory~1.25 day total reduction in inventoryIncreased Inventory availability
Without additionalexpense
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Increased Inventory availability
Cycle time stable
p
Additional Warehouse ExamplepWarehouse Throughput
Constraint elevated thistitime
33%33%33%33%increase in throughput
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Qualitative Results of DBRQualitative Results of DBR
BEFOREBEFORE AFTERBEFOREBEFORE
• Operations metrics were not directly effected by daily activity
• Clear link between operations performance and
activity
• Large unexplainable difference in cycle time from
metrics
• Site to site differences are small and can be explainedSite to site
• Difficult Order prioritization
• Each operation/station was
small and can be explained
• Easy order prioritization
• Si lifi d DC M t• Each operation/station was focused on only their process
• Simplified DC Management
• Increase in site team work
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Additional Key Additional Key LearningsLearningsyy gg
• Robust production solutions are portable from p pmanufacturing to warehousing
• Step function improvements don’t have to beStep function improvements don t have to be complex or expensive
• The proper motivation can cause culture changeThe proper motivation can cause culture change quickly
• Don’t break the constraint make it the• Don t break the constraint, make it the operational focus
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Successful DBR Implementation ppossible through:
1.1. TimelyTimely and accurate datadata
2.2. Utilization Utilization ofof existing continuous continuous improvement improvement programs & methods
3.3. TrainingTraining through “GameGame” exercises
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Questions?Q
Contact InfoContact Info
E‐mail: [email protected]
Linkedin: http://linkedin/in/scottjosephedwardshttp://linkedin/in/scottjosephedwards
Twitter: @scottjedwards
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