Thyssen Internship Final Presentation

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Reviewing and optimizing the order process cycle and normalizing the sales curve

Agenda

Calculating the response time of each function in the process. Identifying reasons for the delayed response time and Measures to reduce the

same. Studying reasons for non-uniform sales in the month for the determined time

duration and measures to stabilize the same.

Flow of the project DMAIC

Define numerical definition of project scope, objectives and constraints

Measure capability of current process performance, comparing with the benchmark

Analyze the problems to find out root causes Improve… identify potential solutions Control the performance to continue to achieve higher results

3

Define

Reviewing the process flow from checklist to Order Confirmation generation.

Process Flow Identifying the chronic defaulters, Top reasons for the process delay and

suggesting measures to bring down the process time from the current average.

Order Management

Quality Assurance Department

Production planning control

Credit Control

Purchase Order

Work Order

Measure To calculate the response time starting from checklist to Order Confirmation

generation

To study orders in totality which have taken both more and less than 4 working days to get executed categorizing as Ideal, high and extreme and find a trend among them.

To calculate the average response time of each function against the ideal time and computing their standard deviation.

Correlation co-efficient of each department with the total response time.

RESPONSE TIME is the difference between the time taken from the receipt of Order to release of Order Confirmation.

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MeasureFunctions Average Response

time of total work orders

Average Response time of delayed work orders

Correlation with the delay response

Order Management

0.86 days 2.89 days 0.29

Quality Assurance Department

0.99 days 2.40 days 0.35

Production Planning and Control

1.79 days 3.60 days 0.75

Credit Control 1.71 days 2.16 days 0.05

Purchase Order to Work Order

4 days 9.33 days

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Analyze Analyzing the delay response wrt variables as Customer, Grade, Product,

and region to be delivered by sorting the top defaulters.

Calculating the percentage delay of each item among the assortment as well the average process time of each assortment.

Identifying the top 5 reasons for delay of each department for the work order delayed by them.

Thus identifying the top 5 reasons as a whole.

The time frame for the analysis is from October 2007 to May 2008

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Customer

8

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0

2

4

6

8

10

12

14

16

10.5

14

5.5

8.71

4.34.95

4.33.4 3.5 4

3 3.452.913.294.39

3.6 3.5

Delay Percentage

Average process time

Grade

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GR

-1000

50C350

50C400

50C630

65C530

50C470-A

P

D

Pow

erCore C

140-27

50C470

50C800

50C530

Pow

erCore C

120-27

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

47.0641.94

22.97 21.62 20.83 18.75 18.64 17.65 16.33 14.81 13.64 13.64

6.68 6.52

3.81

3.113.42

4.38

3.76 3.82

3.37

2.48

3.47

2.86Delay Percentage

Average Process Time

Product

10

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PO

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P H

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P LS

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O F

P M

S

NG

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P

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0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Delay Percentage

Average Process Time

Region

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IND

OR

E

CO

IMB

AT

OR

E

FA

RID

AB

AD

JALA

ND

HA

R

VA

DO

DA

RA

MU

MB

AI

BA

NG

ALO

RE

HY

DE

RA

BA

D

PU

NE

BA

LLAB

HG

AR

H

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

46.05

32.1429.17 27.27 25.00 23.73

16.67 16.1610.75 9.09

7.38

4.68

3.96

3.32

4.48

3.893.40 3.57

2.962.59 Delay Percentage

Average Process Time

Delay reasons

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Delay reasons

13

PO not available56%

PO not clea

r12%

Price Revision23%

Prioritizati-on of cus-tomers

9%

Top OM Delay Reasons

Application of ma-terial

3%PO not clear

3%

Produc-tion Con-

straints4%

Specifica-tion ( T/

W/L)49%

Surface critical

18%

Tdc 24%

Top QAD Delay Reasons

Delay reasons

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Availability of RM34%

Ex-stock

8%

Low Order Quantity

27%

Pro-duction Con-straint

8%

Wrong Coil Weight

22%

Top PPC Delay Reason

Advance Payment47%

Not receipt of PDC for previous sup-

plies27%

Overdue20%

Payment Term credit period

7%

Top CC Reasons

Observations OM:

Due to concerns with the check list the preparation of the same is being taken care by the OM team rather than the sales office.

Lack of clarity in the PO has been one of the issues for the delayed response time.

Delay caused due to prioritization of customers is currently being reverted back from the PPC dept.

OC: Ex-stock status is not available with OM. Low order quantity and wrong coil weighted

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Observations

QAD: Lack of clarity in the specifications and clarification process takes a lot

of time. There is inconsistency between the P.inquiry and P.O. They

Prefer verifying with the company regarding the TDC.

CC

Non-receipt of PDC for current supply.

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ImproveOld Procedure New Procedure

Tdc is usually not attached by OM Tdc to be mandatorily attached before order is logged from OM

Reasons along with the order log is usually edited by the concerned Departments

Every corresponding delay should carry a reason and all the logs should be retained

Non-clarity of PO is major reasons for delay

Verification of PO from the customer at the sales end will expedite process

Separate functions working independently Integration of departments similar to supply chain can give us Reduced lead time and shift load, Information flow, better service and flexibility

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Define

Studying reasons for non-uniform sales in the month for the determined time duration.

Identifying reasons for the concern. Identifying a relation between the order confirmation cycle and the sales

delivery pattern The time frame for the analysis is from October 2007 to May 2008

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Measure

Primarily the complete sales data was segregated fortnightly.

Measured the order count and quantity of all the customers for the first and last fortnight.

Accordingly top 20 customers were sorted wrt percentage of orders placed in the first and last fortnight.

We used the weighted average method to determine the average OC date of the first and last fortnight.

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Month of Invoice Weighted Average OC date for the first fortnight

Weighted Average OC date for the last fortnight

Oct-07 10-Sep-07 23-Sep-07

Nov-07 12-Oct-07 9-Oct-07

Dec-07 27-Oct-07 6-Nov-07

Jan-08 2-Dec-07 12-Dec-07

Feb-08 2-Jan-08 22-Jan-08

Mar-08 28-Jan-08 29-Jan-08

Apr-08 1-Mar-08 23-Mar-08

May-08 1-Apr-08 7-Apr-08

Relation between OC generation date and Dispatch date

Analyze

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1000

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3000

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12 1924 84 56 10 25 182 21 56 111 516 74 48 51 107 34 15 116 131

0 04 18 14 3 8 68 8 24 51 238 35 24 26 57 19 9 72 83

Dispatch Count (1-15)Dispatch Count (16-31)Quantity

Observation

44% of dispatch in 1st fortnight and 56% in 2nd fortnight

WO of majority of these companies are generated in the 2nd fortnight.

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Conclusions

Better planning possible if OC generated in 1st half the month.

Will reduce undue pressure during the month end.

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THANK YOU

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