CEM 515
Project Quality Management
Six Sigma Project
“Transforming Saudi Aramco Supply Chain”
Mohammed Al-Zain
January 15, 2007
Define
Measure
Analyze
Improve
Control
Six Sigma Defined
 WHY six sigma? Satisfaction of customers
 WHO does it? Structured top-down hierarchy of
trained personnel
 WHAT is it? Statistical thinking using data to combat
process variation
 WHERE is it? Standardized framework of “DMAIC”.
 WHEN is it done? Sustained effort via projects
 HOW is it done? Software packages for information
analysis
Define
Measure
Analyze
Improve
Control
Six Sigma Defined
 Alters the paradigm from fixing defective products to
correcting the process so that perfect products are made
 Formal methodology for measuring, analyzing, improving
and then controlling processes
 Reduces the occurrence of defects from a three sigma
level or 66,800 defects per million (average for most
companies) to a six-sigma level – no more than 3.4 defects
per million
Define
Measure
Analyze
Improve
Control
Why Six Sigma?
 It has technical power to find root causes of serious
problems faced by organizations
 It provides designs that respond proactively to
customers’ requirements
 It provides clear cost-savings and revenuegenerating benefits that flow to the bottom line
 It offers a process and customer focused framework
 It improves product and service performance
 It can change organizational culture for the better
Define
Measure
Analyze
Improve
Control
How Six-Sigma is Different from other Quality
Programs?
 Requires discipline to execute
 Leadership team selects six sigma projects with the
maximum pay-off
 Emphasis is on breakthrough rates of improvement
 Goals flow down from customers and senior
leadership’s strategic objectives
 No six sigma project is approved unless the bottomline impact has been clearly identified and defined
 Creates an infrastructure of champions, master black
belts (MBBs), black belts (BBs) and green belts
(GBs) that lead, deploy and implement the approach.
Define
Measure
Analyze
Improve
Control
Some Real Benefits Realized from Six-Sigma
Organization
GE
Motorola
AlliedSignal
Benefits
Saved more than $2 billion



Saved $2.2 billion in reducing COPQ
Honored with the Malcom Baldrige award (1988)
Increased stockholders share value four-fold


Reduced new product introduction time by 16%
Reduced manufacturing costs by more than $1 billion (19921996)
Honeywell
Saved $500 million in 1998, $500 million in 1999 and $700 million
in 2000
Johnson &
Johnson
Saved $200 million in 1999, $350 million in 2000 and $500 million
in 2001
Define
Measure
Analyze
Improve
Control
CSFs for Six-Sigma Implementation
 Strong Leadership and Management commitment and Involvement
 Six Sigma Training
 The Customer Connection
 Organizational Cultural Change
 Organization infrastructure
 Aligning Six Sigma Projects to Corporate Business Strategy and objectives
 Linking six sigma to human resources
 Linking six sigma to suppliers
 Understanding Six Sigma Tools, Techniques and Key Metrics
 Project management skills
 Project Prioritization and Selection
Define
Measure
Analyze
Improve
Control
Define
Measure
Analyze
Improve
Control
 Assemble Team &
Assign Roles
 ID Project Scope
 Develop Team Charter
 Create Project Timeline
 ID Customer CTQ’s
 ID Compliance CTQ’s
 High Level Process
Map
 Estimate Benefits
 Formal Champion
Approval
 Select Key
Product/Process
 Create Product
Tree/Process Map
 Define Performance
Variables
 Baseline Performance
Measures
 Develop & Execute
Data Collection Plan
 Formal Champion
Approval
 Map CTQ’s to
Function/Process
 Select Key
Performance
Variable/Sub process
 Benchmark
Performance
 ID Variation Sources &
Improvement
Opportunities
 Root Cause Analysis
 Define Performance
Objective
 Formal Champion
Approval
 Diagnose Variable
Performance
 Establish Operating
Tolerances
 Develop Solution
 Cost Benefit Analysis
 Develop & Implement
Execution Plan
 Formal Champion
Approval
 Validate Control
System
 Develop & Implement
Monitoring Plan
 Implement Sustainable
Process Controls
 Develop & Deploy
Response Plan
 Standardize &
Translate
 Net Income Benefit
Tracking System In
Place
 Formal Champion
Approval
Tools/Attachments:
Tools/Attachments:
Tools/Attachments:
Tools/Attachments:
Tools/Attachments:
• One Page Plan
• Sigma / DPMO
Calculations
• Workforce
Optimization
Analyze
Improve
• Charter
• One Page Plan
• High Level Process Map • Sigma / DPMO
• CTQ Matrix
Calculations
Define
Measure
• Monthly Retention
Tracking Tool & Review
Control
Business Drivers
 Outsource the logistic services
 Lean Supply Chain:
•
•
•
Streamlined delivery process
Paperless environment
End-to-End tracking and monitoring of orders
 Customers
Define
Measure
Analyze
Improve
Control
Project Scope
Materials collected from local market and delivered
•Activities and resources related to delivery process:
• End Customer (Requester for materials)
• Purchasing
• Vendors
• Saudi Aramco Carrier, or Logistics Service Provider
• Materials Distribution Center (MDC)
• Materials Service Center (MSC)
• Systems that link the supply chain
Define
Measure
Analyze
Improve
Control
Project Team
Project Sponsor: Materials Logistics Department
Project Team Leader: Mohammed Al-Zain
Project Core Team Members:
• Selected MS employees
Ad Hoc Members and SMEs:
• Customers
• Suppliers
• Saudi Aramco Carrier
Define
Measure
Analyze
Improve
Control
Project Justification & Expected Results
Relevant Metrics:
• Cycle Time (hours, days)
• Cost of Poor Quality ($)
Improvement Targets:
• Reduction
in delivery delay by 80%
• Reduction in delivery cost: 50%
Operational/Strategic Impact:
• Smooth
uninterrupted operations
• Customer satisfaction
• Minimize the abuse of delivery priority system
Define
Measure
Analyze
Improve
Control
High Level Process Map (SIPOC)
S UPPLIER
INPUT
P ROCESS
End User
•Identified need
•Create PR
Purchasing
•Approved PR
•Place PO
•Print MDD
Vendors
Logistic Provider
Define
•Materials
•PO
•Trucks
•Drivers
•MDDs
Measure
O UTPUT
CUSTOMER
•PR
•Purchasing
•Approved PO
•Printed MDD
•Process PO
•Ready Materials
•Prepare Mat’s
•Collect Mat’s
•Deliver Mat’s
Analyze
•Materials
Delivered
•Vendors
•LSP
•LSP
•End User
Improve
CTQ
CRITICAL TO QUALITY
•Correct PR
•Correct POs
•Correct MDDs
•Timely printed MDDs
•Availably of Mat’s
•On time delivery
•Right Mat’s
Control
Current Process
Materials Order as-is
Date: 3ed April, 2006
Drawn By: Jasem, Hilal J
Cross-Functional Flow Chart (underdevelopment)
PURCHASING
Department
CUSTOMER
MDC - MSC - Al-Midra
Receive PO
No
VTD/VTC/SAT
B
Create
Outbound
Print MDDs
@ 10:30 &
13:30 before 2
days of
delivary date
SAC
MDDs
Yes
Receive Material
by MDC
(receiving area)
Yes
MSC
No
Al-Midra
Issue Material
Affix Label
Print Label
Shipping Material
(shipping area)
Yes
Create
Requisition
Send to Vendor
Inspection
Department (VID)
No
Pipes, Bulk
Load / Send
Forklift or Mule
(by MSC R&S
Function)
Yes
Stock
Local
No
No
Issue Material
Yes
Review
Stock
Available ?
Send back to PD
System
Shipping Material
(shipping area)
Load / Send
Truck
(by MSC R&S
Function)
Local
No
Deliver
material to
remote
shipping
Scan Label
Segregate by
Rout
Segregate by
Destination
Sort MDDs By Truck
Provide PD
with New
ETA
Prepare Truck Manifest
Return MDD
to PD
Driver Pickup MDDs &
Manifest Next Day
Segregate Material
by Truck Type
Load Truck
Deliver to
customer
Print Manifest and
gate passes
Load Truck
Enter Data into
System
Match MDD's
with PO
A
Deliver MDDs to
Vendor
Print Manifest and
gate passes
Deliver Material
No
Customer
Receive material
(By MSC R&S
function)
Deliver Material to
Logistics Contractor
MDC
Send material to
Store
No
MSC
Full
Truck
Count Package
Sign MDD
No
Emergency
Yes
Others
Province
Yes
Legend
Print Inbound
Logistics
Contractor
End
MDC
Material Ready
for Collection
(SAC
Materials)
Collect material
from Vendor
Unload Truck
Store Material
Transport
Material to
Customer/
Nearest MSC
Go to
B
To MSC
To
Customer
To MDC
Yes
E.P.
To Customer
Define
Measure Yes
Prepare Material
Put Label on
Packages
No
Deliver
Material to
MSC
End
Update System
with New ETA
Go to
Unload Material
Print Manifest and
gate passes
Archive MDD
Hold P.O.
Pending
MDDs
Receipt
Receive MDDs
No
MSC
Scan Label
Yes
Receive
Materials from
Supplier
Load Material
Segregate by
Rout
Material
Available ?
Segregate Material
Load Truck
Receive
Materials
Yes
Yes
Scan Label
Deliver to
customer
Sort MDDs By Vendor
Transport
Material to
MDC/
Nearest
MSC/
Customer
Affix Label
Small
Material
Yes
SAC Log MDDs in
System
Print Label
Pack Material
Issue Material
Inspectable
9COM
Order Material
from Supplier
(Local, Out of
Kingdom)
To DH
MDC
Segregate
Material by location
Printed
Outbound
No
Sort MDDs by INCO
terms
SAC,SAT,VTC,VTD
Unload Material
Print Outbound
in required area
Create P.O.
Sign MDD
VENDOR
Pick up MDDs
@ 8:00 & 16:00
Update
System with
New ETA
No
LOGISTICS CONTRACTOR MDC
Fax Po / MDDs
to Vendor
A
Start
Mapped By:
Checked By :
Analyze
Improve
Control
Measure Process Capability
Variance from Planned Delivery Date
Target
USL
P rocess D ata
LS L
*
Target
0.00000
USL
0.00000
S ample M ean
3.37886
S ample N
265425
S tD ev (Within)
0.00005
S tD ev (O v erall) 2.50268
W ithin
O v erall
P otential (Within) C apability
Z.Bench
*
Z.LS L
*
Z.U S L
-67441.59
C pk
-22480.53
C C pk
0.00
O v erall C apability
Z.Bench
Z.LS L
Z.U S L
P pk
C pm
0
O bserv ed P erformance
P P M < LS L
*
P P M > U S L 989221.06
P P M Total
989221.06
3
6
E xp. Within P erformance
P P M < LS L
*
P P M > U S L 1000000.00
P P M Total
1000000.00
9
12
15
E xp. O v erall P erformance
P P M < LS L
*
P P M > U S L 911507.72
P P M Total
911507.72
Process mean = 3.37 days (falls short of the target)
Hence: we must reduce variability and center the process on the target
Define
Measure
Analyze
Improve
Control
-1.35
*
-1.35
-0.45
0.00
Validate Measurement System
•
•
•
•
Compare SAP data with the data content in actual MDDs
Survey end users
Survey Logistics Service Provider
Survey Receiving & Shipping Personnel
Process Capability of C1
LSL
USL
P rocess D ata
LS L
0.00000
T arget
*
USL
1.00000
S ample M ean
3.80000
S ample N
20
S tD ev (Within)
1.94532
S tD ev (O v erall) 1.98880
W ithin
O v erall
P otential (Within) C apability
Cp
0.09
C PL
0.65
C PU
-0.48
C pk
-0.48
C C pk
0.09
O v erall C apability
Pp
PPL
PPU
P pk
C pm
0
O bserv ed P erformance
P P M < LS L
0.00
P P M > U S L 1000000.00
P P M T otal
1000000.00
Define
E xp.
PPM
PPM
PPM
2
Within P erformance
< LS L
25385.66
> U S L 924974.73
T otal
950360.39
Measure
4
6
8
E xp. O v erall P erformance
P P M < LS L
28021.41
P P M > U S L 920417.60
P P M T otal
948439.01
Analyze
0.08
0.64
-0.47
-0.47
*
• Process Mean = 3.8
• Sample Size = 20 MDDs
Improve
Control
Pareto Chart
Variance from Planned Delivery Date
300000
100
250000
Count
60
150000
100000
40
50000
20
0
Variance
Count
Percent
Cum %
Define
2
63812
24.0
24.0
3
52391
19.7
43.8
Measure
1
52004
19.6
63.4
4
36487
13.7
77.1
Analyze
5
20491
7.7
84.8
6
10807
4.1
88.9
7
7098
2.7
91.6
Improve
Other
22335
8.4
100.0
Percent
80
200000
0
Control
Cause-Effect Diagram
Cause-and-Effect Diagram
Methods
Logistics Prov ider
Planned delivery dates
are not realistic
Purchasing
Keeping materials in
his facility
MDDs are not printed on
time
No use of direct
delivery
No follow-up with vendors
Routes are assigned by
vendors
Late confirmation on
goods receipt
No corrective actions with
vendors
Collection trucks differ
from delivery trucks
Deliv ery
Delay s
Work overload
Asking LSP to come back
for collection
Keeping materials in the
facility
Shipping wrong materials
Insufficient manpower
Insufficient delivery
trucks
Receiv ing &
shipping Sites
Define
Measure
Analyze
Materials are not ready for
shipping
Materials are not available
Vendors
Improve
Control
Potential X’s --Hypothesis to be Tested
X1: The current business model with our suppliers and logistics
service provider
X2: The derived planned delivery date is not realistic
X3: Vendors are not meeting the planned delivery date
X4: Materials are kept more than 12 hours in LSP facility
X5: Materials are kept more than 12 hours in R&S facility
Define
Measure
Analyze
Improve
Control
PO
9 MDDs
Workstations
3.9 MM
Sheet/Y
Vendor
Manual Sorting
By vendor
Data Entry
MDDs
Update
Segregation
New
ETA
Match
MDDs
PO (Hardcopy/Auto Fax)
Materials Supply
Temporary
Archive
Returned MDDs (30%)
2500
MDDs/Day
ETA
Manifest
Update
Carrier
Materials Supply
Data Entry
Stock
20 printers
Scan/Archive
Define
Measure
Customer
Analyze
Improve
Match MDD
w/Pkg
Control
Where is the Pain?
MATERIAL
Papers
$642,720
Toners
MAN-HOURS
MDD
Process
$58,855
Process Components
Barcode Labels
MATERIAL
Yellow Labels
MACHINES
LABOR
MDD
MACHINES
Printers
Imaging
Machine
Printers
(Barcode)
Define
Service
COST/Year
Measure
Maintenance
Expediting
Total Cost (PD)
$13,855
Receiving
$777,830
/ Year
$62,400
(MSC)
COST
$13.8
Millions Customer
/ Year
Expedite
$409,375
$611,907 / Track
COST/Year
$2.3MM
$1.2MM
$9.2MM
$ $450,250
$75,000
$87,500
$40,032
Analyze
Improve
Control
Where is the Pain?




Material delivery delay
900 expediting requests daily
Lack of process-wide tracking
No single point of contact
Define
Measure
Analyze
Improve
Control
X2: The derived planned delivery date is not realistic
• Required Delivery Date and Delivery Lead Time
• Example1: Purchase Agreement with 10 days delivery lead time
• Request for materials
• MDD printing & collection
• Material ready at Vendor site
• Material Collection
• Segregation and consolidation
• Delivery to 1st Receiver
• Delivery to 2nd Receiver
• Delivery to Final Receiver
July 1
July 8
July 3
July 9
July 9
July 10
July 11
July 12
• Is the Delivery Lead time realistic for:
• Vendors, LSP, R&S?
Define
Measure
Analyze
Improve
Control
X3: Vendors are not meeting the planned delivery date
• Vendors normally return MDDs with new ETA
• About 500-800 MDDs out of 2000-2500 MDDs – every day
• Order-to-order System
Define
Measure
Analyze
Improve
Control
X4: Materials are kept more than 12 hours in LSP facility
Deliveries should be within 1-2 Days of MDD Print
# of Days from printing
Define
Measure
Total
%
15
2710
0.9%
14
3195
1.0%
13
3693
1.2%
12
3851
1.2%
11
4471
1.4%
10
3921
1.3%
9
6759
2.2%
8
10136
3.3%
7
16662
5.4%
6
36760
11.9%
5
54310
17.6%
4
35051
11.4%
3
57940
18.8%
2
5571
1.8%
1
609
0.2%
Analyze
Improve
Control
X5: Materials are kept more than 12 hours in R&S facility
• Dhahran Receiving & Shipping
• Consolidation center – another point of delay!
• Kingdom-wide Receiving & Shipping
• Effective cross-docking for local deliveries
• Reasons for Keeping Materials more than 12 hours
• Unavailability of TD trucks
• Consolidation
• Late arrival of the materials – customer is not available
• Returned materials due to reasons such as wrong delivery address
Define
Measure
Analyze
Improve
Control
Improvement Plan
Develop a new business model:
 Enable electronic information sharing and
collaboration
 Provide paperless delivery environment
 Allow process-wide tracking
Define
Measure
Analyze
Improve
Control
PO
9
Workstations
3.9 MM
Sheet/Y
Carrier
Materials Supply
Data Entry
2500
MDDs/Day
Returned MDDs (30%)
Vendor
Manual Sorting
By vendor
Data Entry
MDDs
Update
Segregation
Match
MDDs
PO (Hardcopy/Auto Fax)
Materials Supply
Temporary
Archive
Stock
20 Printers
Scan/Archive
Define
Measure
Customer
Analyze
Improve
Match MDD
w/Bkg
Control
Transformation Plan
DURATIO
N
(Months)
ACTION ITEMS
RESOURCES
1 SCM consultant
SAP
Portal
Bar-Code
Scanners
SCM
Coordinator
s
Carrier
Define
 Develop System Interface with Carrier
 Enhance SAP Tracking System




5
Introduce Advance Shipping Notice (ASN)
Allow vendors to print Barcode label
Electronic Update of ETA/Qty
Enroll top 700 vendors (99% of L/Is)
6
3
 Develop “Dashboard”
 Group Formation & Training
3
Measure
Analyze
$480,000 –
$640,000
2 Portal
 160 Scanners to Capture Receiver Details
 Develop System Interface with SAP/R3
1 ABAP
Programmer
Improve 4
Consultants
1 ABAP
Programmer
($330,000)
H/W + S/W
$500,000
In-house
Provided by Carrier
Control
Return on Investment
MS Savings
$29 Millions
Projected Cost Savings
Partners
Customer
Vendors
Carrier
MS
Millions
Cost Savings/Year
$450,250
10 $216,000
$218,000
6
$14,750,000
14
2
Implementatio
n $1.5 Millions
Define
-2
2006
Measure
2007
2008
Analyze
2009
2010
Improve
2011
Control
Improvement Plan
• Availability of Materials at Vendors
• Instead of revising the ETA, check with vendor first. If he does not
have the material available, place the PO with other vendor who has
the material
• Don’t restrict PA with only one vendor especially those who have bad
history in revising ETAs
• MDDs should be printed 6 or 7 days before the required date
• Dhahran MDC should be receiving material for Dhahran area
only
Define
Measure
Analyze
Improve
Control
Improvement Plan
• Receiving & Shipping scheduling arrangement
• Shipping people should pay attention to the required delivery date
and priority
• Materials should not stay in the shipping area for the second day
• If customer is not available to receive his/her order, deliver to office
services people or any designated coordinator in the customer
premises
• Emergency shipments should be directly delivered to
customer bypassing R&S or warehouse
Define
Measure
Analyze
Improve
Control
Improvement Plan
• The current practice of collecting materials from local market
need to be changed.
• Collection trucks should be scheduled to be dispatched based on
material destination instead of vendor
Define
Measure
Analyze
Improve
Control
Count of L/I
MDD Printed On
11/01/2005
11/02/2005
11/03/2005
11/04/2005
11/05/2005
11/06/2005
11/07/2005
11/08/2005
11/09/2005
11/10/2005
11/11/2005
11/12/2005
11/13/2005
11/14/2005
11/15/2005
11/16/2005
11/17/2005
11/18/2005
11/19/2005
11/20/2005
11/21/2005
11/22/2005
11/23/2005
11/24/2005
11/25/2005
11/26/2005
11/27/2005
11/28/2005
11/29/2005
11/30/2005
Define
Grand Total
MSC
M001
M002
70
53
116
156
8
15
98
390
338
114
87
120
239
62
141
347
321
15
22
67
84
70
135
119
145
142
183
79
109
393
332
44
31
103
83
84
105
133
248
136
295
145
150
297
437
13
38
98
94
133
123
230
247
287
428
163
371
354
597
Measure
4276
5761
M003
M004
8
6
2
7
22
7
7
7
67
4
8
9
22
19
17
41
31
9
13
15
22
11
67
15
6
16
63
33
126
58
Analyze
738
M005
2
7
6
3
67
30
52
14
29
49
25
26
62
25
30
36
78
33
62
67
61
29
53
41
94
29
56
93
32
44
1235
M006
175
66
3
26
251
177
258
61
252
9
75
79
81
128
78
383
97
183
52
278
151
356
457
53
70
308
279
220
186
441
Improve
5233
M007
15
14
5
3
10
13
14
4
145
4
9
6
4
18
12
18
3
6
19
38
36
14
47
5
2
16
24
21
14
65
604
M008
41
56
21
147
26
51
52
152
3
28
50
156
44
48
179
12
70
43
92
66
41
177
6
34
56
123
91
81
199
Control
2145
56
47
1
8
83
52
32
26
34
16
8
48
76
52
8
58
7
18
38
35
73
68
62
4
9
31
45
39
28
92
1154
Count of L/I
MDD Printed On
12/01/2005
12/02/2005
12/03/2005
12/04/2005
12/05/2005
12/06/2005
12/07/2005
12/08/2005
12/09/2005
12/10/2005
12/11/2005
12/12/2005
12/13/2005
12/14/2005
12/15/2005
12/16/2005
12/17/2005
12/18/2005
12/19/2005
12/20/2005
12/21/2005
12/22/2005
12/23/2005
12/24/2005
12/25/2005
12/26/2005
12/27/2005
12/28/2005
12/29/2005
12/30/2005
12/31/2005
(blank)
Define
Grand Total
M001
M002
48
74
130
155
213
259
478
48
95
150
345
262
180
555
51
104
126
275
255
74
471
43
142
99
281
276
120
432
14
102
109
5966
Measure
M003
M004
191
141
311
255
360
218
471
57
137
201
335
335
249
508
130
156
197
243
266
243
497
59
130
272
269
240
269
401
7
128
127
39
21
22
26
31
41
99
17
12
17
32
45
35
38
14
16
45
38
19
14
45
9
3
19
42
12
69
46
12
31
17
7403
926
Analyze
M005
14
21
32
57
104
21
50
33
13
45
115
107
27
35
17
21
28
53
23
17
110
42
13
16
33
117
12
86
16
15
26
1319
M006
70
252
125
193
109
180
428
69
135
194
229
193
141
311
66
98
107
153
158
84
351
36
178
142
262
162
174
616
16
297
82
Improve
5611
M007
16
8
21
8
46
30
58
9
16
11
63
35
24
41
7
12
40
20
38
27
34
5
8
38
47
12
19
81
9
7
15
805
M008
22
43
73
87
92
89
216
24
65
47
88
164
92
251
22
43
85
115
113
55
186
9
51
74
162
84
79
199
5
43
79
Control
2757
44
21
36
34
26
37
57
10
35
41
40
36
21
72
4
20
53
44
34
27
88
6
14
24
36
44
21
146
5
13
16
1105
Maintain Improvement
• Periodic Measurement of Performance
• Customer Satisfaction Surveys
• System Generated Data on Delivery Performance
• Site Visits and Observations etc.
Define
Measure
Analyze
Improve
Control
Conclusion






Reduce process cost
Improve data accuracy and provide real-time information
Allow monitoring of process performance
Reduce missing Goods Receipt
Enable the corporate strategy for outsourcing initiatives
Improve the On Time Delivery performance, customer
satisfaction
 Reduce process overheads and time by enabling electronic
flow of information
 Allow end to end visibility of shipments throughout the
delivery process
 Help in measuring and evaluating suppliers and logistics
provider delivery performance
Define
Measure
Analyze
Improve
Control
Thank You
Define
Measure
Analyze
Improve
Control
Define
Measure
Analyze
Improve
Control
Items
Material
Labors
Machines
Services
Define
Formula
Saving/Yr
Paper (Sheets)
2500MDDsX6sheetX260day =3.9MM
Answer X $824/5000sheets=$642,720
$642,720
Labels (Barcode) + Toners
85 Box X $163 X 2 (to count toners cost)
$27,710
Labels (Yellow label)
2500MDDX312DaysX$0.08 ($8/100 labels)
$62,400
Toners
Box(8 bottle)=90 box X $500/box =45,000
$45,000
MDD Processing
10 employees (7 Dh+ 3 CRWR) X 2080
$1.07 Million
Expediting
14 employees (10 Dh + 4 CRWR) X.40 =
4.9 employees X 2080
$554,216
Carrier man hours
Dh Receiving: 15 BTT employees X $8/H X
8HX.45 Hour Saving X290 day =$125,280
MDD Process: 5 BTT employees X $8/H X
8HX290day =$92,800
$218,000
Customer man hours
1000 Expedite Rqst dailyX5 Minutes X60X260 days =$667,250
Vendor man hours
2500 MDD daily X 5 Minutes / 60 H X $8/H
X .5 Hour Saving x 260 days
$216,000
Rec/Ship man-hours
9 MSCs X 11 Employees X .45 Hour Saving
= 39.6 Employees X 2080
$4.3 Million
MDD Printers (Advance)
4 X $105,000
$315,000
MDD Printers
5 X $2500
$12,500
Printers (Barcode Label)
20 X $3000
$60000
MDD Scanners
2 X $35,000
$70,000
Services charges
7% X 457,500
$32,025
Measure
Analyze
Improve
Control