Andrew SiEmail: Andrew.sile@gmail.com

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Project CharterProject Title:

Improve the Planning & Scheduling Process to Achieve OTIF Requirements for Key Account A, B, C at Plant

123

Expected Customer Benefits Improved On-Time-In-Full customer delivery contributes to the goal to position Company as the "supplier of

choice" to our customers. Higher customer service level also adds value to the integrated supply chain (ISC) of

the main customers.

Business Case:Plant 123 received complains from key accounts on the order delivery performance. Improving customer service

level will enhance the customer loyalty, and generate more revenue in the future.

Opportunity Statement: There are disconnections in the order-to-cash process that caused delivery delays to the customer. This project

will use SCOR methodology and Lean tools to identify the Gaps that caused the disconnections and take

actions to bridge the gaps. Specifically in Plant 123, the project will review both the front end

planning/scheduling processes and follow through on the shop floor execution, to improve the scheduling

adherence and OTIF. Meanwhile, the excessive inventory for production orders that are not required in the short

term will be reduced and the shortage of production orders that might cause poor customer service level will be

minimized. The capacity utilization will be more effective as the priority will be given to the production orders

that are really needed. The direct savings will come from right-sizing the WIP & capacity utilization based on

customer demands.

Scope:The scope of this project is the material part numbers for the four customers. The process starts from receiving

customer orders/forecasts and ends with customer receiving the products.

Metrics METRICS BASELINE CURRENT GOAL UNITS

External

OTIF

Key Acct A: 95%;

Key Acct B: 90%;

Key Acct A: 95%;

Key Acct B: 90%;

Key Acct A: 98%;

Key Acct B: 95%; PRIMARY METRIC

Internal

OTIF

Key Acct A: 43.8%;

Key Acct B: 77.7%;

Key Acct A: 74.8%;

Key Acct B: 78.3%;

Key Acct A: 90%;

Key Acct B: 90%;

SECONDARY

METRIC

Scheduling

Adherence

SECONDARY

METRIC

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Project Methodology

X1 Production Order Planning Process Demand and Supply Evaluation for New Production Order Creation

Quality/Engineering Review for the Production Order Release

X2 Production Scheduling & Implementation

X3 Throughput/Capacity/Productivity of the Constraint Work Centers

X4 Raw Material ATP

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Sub-Projects Portfolio

Y: OTIF = F(X1, X2, X3, X4)

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Production Order Planning Process

Demand and Supply Evaluation for New Production Order Creation– Business Issue:

• Current process for production order requirement calculation (MRP process) is not well defined, especially for the Min/Max products. We need to have a systematic and scientific way to evaluate the production order situation (both shortage and over production), and cut new production orders for shortages only.

– Measure/Analyze/Improve:• Before: Production order for production shortage: 55%; After: over 85%

– Progress:

• Open production order analysis T1

• Develop production order planning process for Min/Max materials T2

• ABC based production order planning process for MRP parameters setting in SAP T3

Quality/Engineering Review for the Production Order Release– Business Issue:

• Current capacity for quality review is 10 product part numbers/day, and there are over 1000 product part numbers in the “review list”. We need to increase the quality review capacity and make sure the list for review is prioritized according to the most current requirements.

– Measure/Analysis/Improve:• Before: Quality review for production orders: 8 orders/day; After: 15 orders/day

– Progress:• Re-prioritize the list of materials for quality review T1

• Establish the inter-departmental procedure on quality review process T2

• Current wait time for Quality/Engineering review is 11 days T3

• To have a Kaizen event to reduce the wait time into 2-3 days T4

X1: Production Order

Planning Process

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X1: Production Order

Planning Process

Plant Min/Max Delivery Performance to Key Acct B

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X1: Production Order

Planning ProcessPlant Min/Max Delivery Performance to Key Acct A

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

OTIF Above 80% Max

OTIF Trendline Above 80% Max Trendline

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

90.00%

91.00%

92.00%

93.00%

94.00%

95.00%

96.00%

97.00%

98.00%

99.00%

100.00%

OTIF Above 80% Max

Delivery Performance for Min/Max (Represents customers measure):

# of Materials Above or Equal Min

# of Materials in MinMax Scope

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Production Order Scheduling & Implementation– Business Issue:

• Shop floor has no visibility beyond the current “hot orders”. Even if there is capacity left after all the “hot orders” for the day are completed. We need a master schedule to prioritize production orders.

– Measure/Analyze/Improve:• The Excel Macro that helps us to prioritize the production orders and create production schedule has been

reviewed and rewrote. 2010 Q4

• 7 Day finite schedule was produced and pilot run 2010 Q4

• Color code production orders to set priorities categorically, but not specify the exact sequence. Daily production order sequence is made on the shop floor. 2011 Q1

– Discussion:• The best level of granularity of shop floor scheduling

• The routing/duration discussion for SAP master data (post Aug 1st)

X2 Production Order Scheduling

Finite Schedule (Form)

by ProdOrd by Day/Shift

Radom

Schedule

“Hot List”

Schedule

Categorical Schedule

by Priority Level

7 Day Schedule but Allow

Daily Re-sequence

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X2 Production Order Scheduling

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Plant 123 Scheduling Adherence

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Increase the Capacity/Productivity/Throughput of the Constraint Work Centers– Business Issue:

• The overall production rate of plant123 is determined by the pace of the slowest work center(s). We need to improve the productivity/throughput of the constraint work center(s) to complete the past due orders, to increase customer inventory to Max, and to prepare for future demands.

– Measure/Analyze/Improve:• Bottleneck Identification: Pickle & Hot Press• Throughput Improvement

– Progress:• Productivity of pickle work center improved by 22.8% 2010 Q4

• Over production cycle time reduced by 50% 2011 Q2

X3: Throughput/Capacity/Productivity

of the Constraints

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X3: Throughput/Capacity/Productivity

of the Constraints

-40

-20

0

20

40

60

80

100

120

Avg Days Late vs Sch Inferred Actual LT

3 per. Mov. Avg. (Avg Days Late vs Sch) 3 per. Mov. Avg. (Inferred Actual LT)

Actual Lead Time/Lateness of ProdOrd Completion

New Average

In-house Prod

Time:

56 days.

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Ensure Raw Material ATP– Business Issue:

• The current process to evaluate the raw material requirement is not based on a systematic analysis of the demand and supply situation of the raw material inventory. On top of that, focus on reduce the inventory level slowed the reaction to the current demand on raw materials. We need to establish a process to evaluate the raw material requirement in a more systematic and scientific way

– Progress:• First round of Raw Material supply and demand analysis 2010 Q4

• First batch of purchase orders of Raw Materials that below the critical level of inventory 2010 Q4

• Establish procedure for raw material requirement review process 2011 Q2

– Discussion:

• Use SAP to drive raw material replenishment

X4: Raw Material ATP

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X4: Raw Material ATP

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Apr May Jun 7/12 7/18 7/25

2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011

FG 396 443 426 443 374 522 467 910 1,843 2,204 2,312 2612 3083 3189 3401 3976 4069 3950

WIP 3,993 3,005 2,918 2,529 2,227 1,915 1,718 1,435 2,422 2,373 2658 3164 3735 3514 2792 2579 2404 2345

RM 5,825 5,646 5,024 4,786 4,676 4,088 4,142 3,505 3,430 3,442 3,143 5324 6079 5776 6230 5843 6031 6005

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

RM WIP FG

INVENTORY

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Solution Matrix Review: Are the Xs’

Correctly Identified & Addressed?

0.00%

20.00%

40.00%

60.00%

80.00%

90.00%

92.00%

94.00%

96.00%

98.00%

100.00%Min/Max Delivery Performance to Key Acct

0.00%

20.00%

40.00%

60.00%

Scheduling Adherence

-50

0

50

100

150

Avg Days Late vs Sch

Actual Lead Time/Lateness of ProdOrd Completion

Phase 1 Phase 2 Phase 3

Planning (X1) ↑ ↓ ↑

Scheduling (X2) - ↑ ↑

Throughput (X3) - - ↑

Raw Mat (X4) ↑ ↑ ↑

OTIF ↑ ↓ ↑

Phase Summary

Phase I Phase II

Team SCM, CI, Site Mgmt Include IT

ToolsSCOR Level3 Lean, 6

Sigma, TOC

Add VSM, SCOR Level

4 (with Info Flow)

Design

High Level Review for

Disconnections; Good

Priority of Xs

A more Thourough

Review for

Disconnections

MeasureCorp Metric + Cust

Metric

SAP Generated Metric

& Rpt

Analyze

/Improve

Excel/Access Based

Tools Plus System

Solution

System Based

Solution

Control SAP MRP

SAP Rpt on Plant &

Cus Inv

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