Data Collection and Analysis Using Six Sigma Methodology for Fleet Maintenance in

Logistics Industry

Ajyuk J Raj1, A. S. Prasanth2

1Mechanical Department, PSG College of TechnologyCoimbatore, India

2Mechanical Department, PSG College of TechnologyCoimbatore, India

Abstract— The aim of this study is to reduce the maintenance cost and increase truck readiness by implementing lean six sigma methodology in Fleet Management company. The research involves a new methodology of involving the concepts of industrial engineering in the six sigma methodology. The study starts from the Voice of the Customer to identifying the root causes of the existing problems persisting in the company. Thus, this analysis is the foundation for the implementation of Reliability Centered Maintenance in-order to reduce the maintenance cost. Different tools like Cross Functional Process Mapping, Root Cause Analysis and Hypothesis Testing have been used for analyzing the high variation in the profit margin of the trips in the company. Based on the extensive data analysis using statistical software, it has been found that maintenance cost is playing an important role in the profit margin of the company. This research also involves introduction of the Total Productive Maintenance in the company which improves the truck readiness and thus increased customer satisfaction.

Keywords—Six Sigma, Lean Implementation, Operations Management, Total Productive Maintenance, Statistics, DMAIC

I. INTRODUCTION

Transport of freight by road forms an important component of freight movements within India, with a large chunk of goods, over 65 percent, being moved by road. The poor infrastructure has severely crippled the smooth functioning of logistics operations. Warehousing, has also been typically dominated by small players with small capacities and poor deployment of handling, stacking and monitoring technologies. The formatter will need to create these components, incorporating the applicable criteria that follow. The companies need to get more exposure to the world class theories and strategies like Lean Six Sigma and Total Productive Maintenance in-order to operate in that level of quality at reduced cost.

A. Lean PhilosophyLean philosophy has a deep foundation in the Toyota Production System. In its purest form, Lean is about the

elimination of waste and the increase of speed and flow. The ultimate objective of Lean is to eliminate waste from all the processes occurring in the company. All the resources necessary for logistics planning and execution — becomes waste when not utilized effectively to generate: (1) the greatest possible value in the eyes of customers and (2) healthy return for the company [1].

B. Six SigmaSix Sigma is a business performance improvement strategy that aims to reduce the number of mistakes/defects to as

low as 3.4 occasions per million opportunities. Sigma is a measure of “variation about the average” in a process which could be in manufacturing or service industry.

Six Sigma improvement drive is the latest and most effective technique in the quality engineering and management spectrum. It enables organizations to make substantial improvements in their bottom line by designing and monitoring everyday business activities in ways which minimizes all types of wastes and NVA activities and maximizes customer satisfaction. While all the quality improvement drives are useful in their own ways, they often fail to make breakthrough improvements in bottom line and quality [9].

Six Sigma has acquired a strong perspective stance with practices often being advocated as universally applicable. Six Sigma has a major impact on the quality management approach, while still based in the fundamental methods & tools of traditional quality management [11].

Fig. 1. Six Sigma Methodology

II. DMAIC SIX SIGMA METHODOLOGY

This research involves incorporation of the concepts of Lean Management, Six Sigma, TPM and Operations Management in finding the root problems persisting in a typical fleet management company. The study includes rigorous historical data collection and statistical analysis that acts as the stepping stone to the further study of the system.

Six Sigma follows DMAIC approach that uses data to:1. Confirm the nature and extent of the problem,2. Identify true causes of problems,3. Find solutions that evidence shows are linked to the causes, and4. Establish procedures for maintaining the solutions even after the project is done.

As presented in Figure (1), the purpose of the Define phase is for the team to agree on what the project is. In the Measure phase, teams evaluate the existing measurement system, observe the process, gather data, and map the process in more depth. In the Analyze phase, teams develop theories of root causes, confirm the theories with data, and finally identify the root cause(s) of the problem. In the Improve phase, teams identify a range of possible solutions, review existing best practices to see if any can be adapted to the situation, develop criteria for selecting a solution, pilot the chosen solution, and plan for full-scale implementation. The purpose of the Control phase is to make sure that any gains a team makes last.

A. Define Phase1)Problem StatementThe operational process concerned in the Transit of the truck. The transit time depends directly on the Readiness of

the truck. Readiness is defined as the ratio of uptime and the total running time, which is the summation of uptime and downtime.

Readiness = Uptime/(Uptime + Downtime) (1)

TABLE-I READINESS OF TRUCKS

Table I presents the readiness of the trucks maintained by the Zonal Branch in the year 2011-2012. It is found that the average Readiness of the trucks is 0.74 in the year 2011-2012, which is large due to frequent maintenance works and slow process in the maintenance.

Table II presents the Project Charter which includes the problem statement, goal statement, business case and scope of the project. The goals state specific project targets to achieve the desired project purpose. The targets are stated as measurements. In this research, Truck Readiness is the metric used in the goal statement. Project Scope identifies boundaries for the project and it includes maintenance and performance reporting, readiness improvement and reduction in maintenance cost in this project.

TABLE-II PROJECT CHARTER

2)Voice of Customer (VOC)Voice of Customer can be defined as a systematic approach for incorporating the needs of customers into the design of

customer experiences. The needs and experiences of the customer become of utmost importance, especially when implementing VOC techniques to analyze customer data and make improvements. In this research, Survey has been used in-order to capture the Voice of Customer. e-mail surveys and questionnaires are used in the study to obtain two types of data from the customer1. Qualitative Data2. Quantitative Data

The customers that the company serve can be broadly classified into two: Sundry Customers and Contractual Customers. While questionnaire has been used to obtain the qualitative data from the sundry customers, e-mail survey (see Fig. 2) has been used to obtain the quantitative data from the contractual customers. Likert Scale has been used to quantify the customer satisfaction level.

The variables used in the study are Safety, Promptness of Service, Quality of Delivery, Freight Charges, On time Delivery and Point Delivery. The quantitative analysis also includes the comparison of the company's performance with the major four competitors. While the questionnaire responses was obtained by the method of direct market survey, e-mail survey has also been used with the help of Google Drive, whereby, the customers can just click the responses which is more effective when compared to the qualitative analysis.

Fig. 2. Online Market Survey

3)SIPOC DiagramFigure (3) depicts the SIPOC (Suppliers, Inputs, Processes, Outputs and Customers) Diagram which has been created

based on the different processes. This is a high caliber method of doing business that shows how the current process of taking care of the customer actually works. It helps in breaking down exactly what needs to be done and how it needs to be done. Based on the SIPOC Diagram it is observed that the bottleneck in the total processes occurs during checking for availability of the truck, as the truck waits for completion of the maintenance process.

Fig. 3. SIPOC Diagram4)Critical To Process (CTP)

As presented in Figure (4), Critical to Process (CTP) are the key process input variables. These are the process parameters which influences other critical approaches - Critical to Quality (CTQ), Critical to Delivery (CTD) and/or Critical to Cost (CTC). As six sigma methodology has been implemented in a service industry, the metrics that are significant for the process are chosen carefully.

Fig. 4. Critical To Process

B. Measure PhasePrecision in defining the problem facilitates the measurement stage. Measurement refers to assessment of the current

state. As the focal problem for the DMAIC project is “improved readiness of truck,” maintenance time would serve as the primary measure. True to Six Sigma’s concern with variation reduction, one would look not only at the average maintenance time but also the variance around it.

1)High Level Ishikawa DiagramThe process concerned in the research is the vehicle transit from location A to location B. The Moment of Truth

occurs at only two points, when the customer gives the order in the origin and when he/she collects the material n the destination. The transit time largely depends on the Truck Readiness of the trucks in the corresponding routes.

Based on the Voice of Customer it is understood that the only factor customer cares for is fast and on time delivery. The different factors that affect the transit time has been studied and Ishikawa Diagram (see Fig. 5) has been used for systematically identifying and presenting all the possible causes of a particular problem in graphical format.

The maintenance of the trucks and other related processes are only necessary non value added activities which need to be eliminated or reduced. From the Ishikawa Diagram, the problems are focused towards the three factors:1. Engine Breakdown, 2. Insufficient Fleet (Because of low readiness)3. Maintenance

Fig. 5. High Level Ishikawa Diagram

2)Cross Functional Process MappingIn this research, cross functional process map for the maintenance process is studied in-order to identify the bottleneck

in the process (see Fig. 6). It is relatively easy to spot many types of potential problems and opportunities for change from the cross functional map.

Fig. 6. Cross Functional Process Mapping

3)Process WorksheetTable III depicts the process worksheet for the Fitness Certificate work. The first step for improved process is

elimination of wastes. Industrial engineering uses many tools to analyze the methods being used to perform a job. Each step of the work is questioned, to select the best solutions, and to implement the new method. Thus, tools like Process Analysis Worksheet and Process Chart has been used in this research in-order to identify the different kinds of waste present in the process. The process worksheet for the Fitness Certificate work in the maintenance department is done.

TABLE-III PROCESS WORKSHEET

Figure (7) shows the time distribution, which is based on the process sheet.

Fig. 7. Maintenance Time Distribution

4)Spaghetti DiagramFigure (8) depicts Spaghetti Diagram which has been used to detail the actual physical flow of the worker and

distances involved in a work process of hub assembly. As these processes that have not been streamlined and are poorly laid out with work/worker taking a path through the work area that looks like a mass of cooked spaghetti. This helps in tracing the walking patterns of workers in a process. In this research, this has served as an illustration of the system's inefficiency

Fig. 8. Worker Movement Spaghetti Diagram

5)Pareto AnalysisPareto Analysis has been used in multiple phases of the project which includes measure and analyze. Statistical

Software MINITAB has been used to do the Pareto Analysis. Pareto analysis (see Fig. 9) is a formal technique useful where many possible courses of action are competing for attention. The first analysis is done in-order to select the vital few trucks that has more maintenance cost, thus should be given the highest priority. Thus, out of the 21 trucks which is maintained by the Calicut branch, 14 are eliminated while the remaining 7 trucks are studied for improvement. This analysis is done in the measure phase, before the techniques in industrial engineering is used to do the process study.

Fig. 9. Pareto Diagram illustrating the trucks and maintenance cost

C. Analysis Phase1)HistogramThe total expenses for each of the trips of different trucks has been represented as histogram (see Fig. 10) for better

understanding of the different variables that are involved in the contribution to the same. Histograms are used to plot density of data, and often for density estimation: estimating the probability density function of the underlying variable. 

I.

II.

III.

IV.

V.

Fig. 10. Total Expenses for each trips of the trucks

2)Correlation AnalysisSince, it cannot be confidently stated that the maintenance cost affects the profit margin of the firm, 2 variable

correlation analysis is done to understand the dependence of profit margin on the maintenance cost. Correlation (see Fig. 11)  refers to departure of two or more random variables from independence, and technically it refers to any of several more specialized types of relationship between mean values.

Fig. 11. Correlation Analysis between Maintenance Cost and Profit Margin

-2,000.00 4,000.00 6,000.00 8,000.00

10,000.00 12,000.00 14,000.00 16,000.00

TRIP 1 - Profit Margin -18%TRIP 2 - PM 4%

TRIP 3 - PM -15%

As taking merely maintenance cost as the independent variable and profit margin does not serve the purpose as it does not give an idea of how much the corresponding maintenance cost contributes to the total expense. Thus, the ratio of maintenance cost and total expense is taken as the independent variable while profit margin is taken as the dependent variable. The correlation equation is found out to be,

(2)

Thus, it is found from the correlation analysis that the Profit Margin(PM) is negatively correlated with MC/EXP. This leads to the fact that the maintenance cost in the current scenario is high due to multiple reasons and the problems need to be found, analyzed and rectified

3)Pareto AnalysisThe Pareto Analysis in analysis phase helps to identify the major factors that contributes to the maintenance cost.

These are found based on the data gathered from the Job Cards. The count of the different problems and the labor cost adhering to it is analyzed and the study is done. The major factors that contribute to the maintenance cost are:1. Transmission and Joint2. Lights and Wiring3. Tire4. Suspension5. Engine6. Steering7. Body Works8. Miscellaneous

Fig. 12. Pareto Analysis depicting truck maintenance jobs

It is found based on Pareto Analysis (see Fig. 12) that 80% of the maintenance comes from the following three functional items:1. Transmission and Joint2. Lights & Wiring3. Tire

Even though, engine work comes 6.6% of the total count of work, based on expert opinion it can be understood that a significant amount of time and cost is needed for engine failure/repair. But the calculation of the actual cost of repair of the engine is out of the scope of this project as it is classified information in the company. Thus engine failure is considered first for the study as it is classified as a critical component of the truck.

4)Normality TestThe Anderson-Darling test (see Fig. 13) is used to test if a sample of data came from a population with normal

distribution. It is a modification of the Kolmogorov-Smirnov (K-S) test and gives more weight to the tails than does the K-S test. The K-S test is distribution free in the sense that the critical values do not depend on the specific distribution being tested. The Anderson-Darling test makes use of the specific distribution in calculating critical values. This has the advantage of allowing a more sensitive test and the disadvantage that critical values must be calculated for each distribution. Also, Anderson-Darling test is chosen in this research because tests like Cramér–von Mises criterion Test

and Watson Test is effective only for small sample size (<30) while in this research 70 data points have been taken to analyze the variation of the profit margin of each trip.

Fig. 13. Normality Test (A-D Test)

The test statistics is as follows:Null Hypothesis

Ho : The data are Normally DistributedAlternate Hypothesis

Ha : The data are not Normally DistributedNumber of data points – 70AD Number – 0.248p Value – 0.742

Here 0.742 > 0.05 therefore, fail to reject the null hypothesis. Thus it is concluded that the profit margin is normally distributed.

5)Nested Ishikawa DiagramBased on the High Level Fishbone Diagram (Fig. 5) done during the initial phase of the research, the engine

breakdown factors are further studied. Based on the expert opinion and literature survey, the Root Cause Analysis of the engine failure is done, as depicted in Figure (14).

Fig. 14. Nested Ishikawa Diagram for engine failure

D. Improve PhaseAs a measure to empower the driver with techniques to reduce the maintenance work and increase the vehicle part

life, autonomous maintenance has been introduced. This includes regular cleaning and inspections to detect abnormalities and possible malfunctions, diagnostic repair and facilitation of maintenance experts operations and optimization of procedures such as speed, gear shift and braking. This will significantly reduce the maintenance work of

the trucks. In addition, a novel concept called 3600 Walk-Around Checklist (see Fig. 15) has been introduced along with the normal checklist which makes the inspection of the driver more easier.

Fig. 15. 3600 Walk-Around Checklist

In addition, the driver is provided with a detailed checklist (Table IV), which empowers him with doing basic maintenance, thus reducing the maintenance work as well as cost.

TABLE-IV VEHICLE CHECKLIST FOR DRIVER

E. Control Phase1)Poka-Yoke through One Point Learning The challenges faced during this research in the company throughout the lean journey has been

1. Difficulty in bringing the workers outside the process to classroom for training.2. There are no specific how-to's in the maintenance department which makes it difficult for the new employees to easily

forget to apply them. 3. The front line managers do not engage the workers in lean topics

Thus, One Point Lessons (see Fig. 16) have been developed that would help the worker in saving a lot of time. One Point Lessons are a volume of one-page structured teaching tools. Each one covers a different lean principle, tool, or concept clearly and succinctly. These One Point Lessons have been introduced for all the maintenance activities, making the worker less error prone. The steps, diagnosis and solution have been precisely provided in the One Point Lessons which makes the worker error free.

Fig. 16. One Point Learning

III. RESULTS AND CONCLUSIONS

Sigma or standard deviation is a statistical measure of dispersion in data. It is a measure which uses the characteristic of past data to make judgments about how the process will perform in the future. If a given set of data has normal probability distribution then the number of defects that will occur in the process over a period of time can be known depending upon the sigma level of the process. Based on the normality test done in this research, it is found that the data is normally distributed, and the sigma calculation is done. The process taken in this research is the transit of the vehicles and the defective process is where the profit margin is negative. The expenses is compared with the market rate, and not the actual fleet charges in this study. When the profit margin is negative at market rate, the customer need to give additional money to the company, thus bringing dissatisfaction to the customer. Cases of Light Commercial Vehicle and Heavy Commercial Vehicle trips are taken and the sigma level is calculated separately (Table V).

TABLE-V SIGMA LEVEL

It is observed that out of the 97 trips in 2012, 23 trips have run at loss when the expenses is compared with the market rate. Due to this increased cost, the fleet charges of the company is high. So it can be concluded that the factor which leads to the major variation in the profit margin is the maintenance cost. The different factors that contribute to the trip expenses include:1. Cost of High Speed Diesel(HSD)2. Salary and Bata of the driver3. Total Maintenance Cost4. Administrative Expense5. Battery6. Tire, Tube and Flap7. Tax and Insurance8. Miscellaneous Expenses

Thus, the maintenance cost need to be stabilized by introducing techniques like preventive maintenance or reliability centered maintenance. As an inception for the change in the organizational culture, Total Productive Maintenance and Lean activities are introduced.

A. Space ImpactBy introducing the philosophy of "A place for everything and everything in its place", the space utilization has been

improved from mere 64% (4030 sq. ft. in 6300 sq. ft.) to 82% (5160 sq. ft. in 6300 sq. ft.). Thus, a net increase of 18% has been made possible.

B. Time ImpactFrom Fig. 7, it is understood that the Value Added time contributes to only 49% of the maintenance process. It is

observed that the total value added hours is 247.25hr while the non-value added hours count to 153hr. Also, the 247.25hr can be divided as 65.25 hr value added, 29hr necessary non value added activity and 153hr non value added activity. By eliminating the waiting of the vehicle, the total maintenance time can be reduced from 247.25hr to 94.25hr, which reduces the time by 61.88%.

C. Movement ImpactJust by walking through the maintenance department, the industrial engineering tools provide the ability to practice

mentally productivity improvement techniques. The important factor is that the implementation of the changes must be timely and recognizable by the supervisor and the worker. It is found from the process chart and spaghetti diagram that there are many activities which can be eliminated thus bringing improvement in the process. The average distance travelled by the worker for hub assembly as of the existing process is 740ft, which can be reduced to 390ft with standardized work plan.

D. Scope for further improvement The improvement achieved after implementation of DMAIC Six Sigma methodology can be further improved & new

performance standards can be realized by using the novel concept of Reliability Centered Maintenance. Six Sigma can be integrated effectively in the community of company employees for maintaining and continuously improving the improved performances.

ABBREVIATIONS

DMAIC : Define Measure Analyze Improve Control; VOC : Voice of Customer; CTP : Critical To Process; CTQ : Critical to Quality; CTD : Critical to Delivery; CTC : Critical to Cost; SIPOC : Suppliers, Inputs, Process, Outputs, Control; VA : Value Added; NVA : Non value added; HCV : Heavy Commercial Vehicle; LCV : Light Commercial Vehicle; MC : Maintenance Cost; PM : Profit Margin; DPMO : Defects per Million Opportunities; TPM : Total Productive Maintenance.

REFERENCES

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