Day 3: Changes The back-to-back production system was reexamined. Jim Connor, the production planner, had now witnessed firsthand the flawed philosophy of sequencing the complicated pumps back to back instead of spacing them out. His years of thinking in EOQ mode were over. He adjusted the planning schedule accordingly later that day. Furthermore, Reynaldo Roche was pleased that the roamer role had been established without issue, and the assistant was happy that he did not have to be idle for much of the day. Given that the tasks had been leveled (Exhibit 1), Roche decided it was possible to input his standard-work observations and develop new sheets to reflect more accurately the tasks that the operators actually did and the tasks that had been shifted from workstation 3 to workstation 2. He input the data, which he posted at the workstations, replacing the old sheets (Exhibit 2). Day 4: Sustaining Improvements and Controls The B line was off to a good start. The run rate had been three dispensers an hour on target. Allowing the line to move independently, the team members observed whether the changes they had made were indeed stable and sustainable. They wondered what level of supervision would be required for the line to keep moving smoothly. There had been a couple of hiccups, due to some missing parts and a misplaced Diesel-dispenser order that was supposed to be assembled on the A line. Team members were afraid that if they turned their back on the line, it would revert to its original state. Controls, or signals, needed to be available. The ideal control system was a line where a button would light up every 18 minutes (takt time). At that point, all operators would push a button to signify that they were done and the line could move on. If a mistake were found or a configuration prevented an operator from meeting takt time, the system would stop the line so that the mistake could be easily identified and flagged for the sidetrack for later correction, before continuing. This case was prepared by Jeriel Chua (MBA 06), under the supervision of Elliott N. Weiss, the Isadore Horween Research Professor of Business Administration. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright 2006 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the permission of the Darden School Foundation.
-2- Therefore, the team installed an andon device that had three lights: red, yellow, and green. The device was essentially a takt-time monitor that would show green for the first 13 minutes, turn yellow to indicate 5 minutes remaining, and then blink red at takt time, which meant that the line was supposed to continue. Movement of dispensers from one workstation to another effectively reset the andon light, putting it back to green. If there were a defect that needed a supervisor s attention, the red light would continue blinking because the operators were told to stop the line. The team also came up with a list of duties to familiarize the supervisor with the changes on the B line and the indicators to be watching for in order to know whether anything was going wrong (e.g., the andon device, a starved workstation, an hourly run rate below three units, and the roamer s duties). At the end of the day, the B-line operators had produced a win number: 21 pumps, a 30% increase in productivity from 16 pumps a day. The Kaizen team knew that some more finetuning would be necessary to hit the target of 24 pumps, but it was confident about the changes it had implemented. As the shift ended, the Kaizen team thanked the operators for their cooperation. The operators were excited to see that 24 pumps might not be such an impossible goal. They were also happy that overtime would soon no longer be necessary. The operators (excepting, perhaps, operator 2) had finally bought into the team s changes, realizing that they did not have to work any harder to achieve the higher target. For the same amount of time, they were able to produce more than they had the week before. Day 5: Report Roche s team was ready to make a presentation about its Kaizen center to top management. The team was enthusiastic about the effectiveness of the changes and improvements in production. Only two items were placed on the Kaizen Newspaper 1 for the B line, and they were relatively minor: to add audible alerts to the andon device and to finalize the new platform s height and length. All in all, the team estimated an annual saving of $145,000, 2 based on a reduction in overtime costs alone. Roche s team had put together a report card (Exhibit 3), which compared its achievements with the initial targets. Management commended the team for a successful Kaizen. 1 Kaizen Newspaper items were tasks that remained unfinished during the week owing to external constraints. Ideally, they should be no more than four items, and should take no longer than a month to accomplish. 2 $13.5 overtime (OT) rate estimate 12 operators 3 hours average OT 300 days = $145,800. This figure did not include estimated inventory savings and a predicted reduction in scrap and rework.
-3- Exhibit 1 Operator Loading Chart - B Line After 1200 TT = 1125 1000 Time (in secs) 800 600 400 200 0 1 2 3 4 5 6 7 Station 1 2 3 4 5 6 7 Time 1046 1052 1104 1060 1070 1097 1041 Station Time to test air test first 5 manifolds of the day B-line Layout - AFTER
-4- Exhibit 2 Standard Work Combination Sheets
-5- Exhibit 3 Kaizen Report Card Targets