ALTERNATIVE STRATEGIES
The following alternatives were identified by the group with their corresponding analysis:
- Send TMM – QC in KFS and assign inspector at the receiving dock.
Advantage: Ensure quality compliance prior delivery based on TMM standards, minimizes
possible loss and eliminates overtime due to offline inventory. Disadvantage: Additional labor cost incurred. (See Appendices for Exhibit 4: Cost Benefit Analysis).
- Re-train employees in proper handling and communicating of problems on the line.
Advantage: Immediately address problems at the source 1. (See Appendices for Exhibit 2: Problems Arising from Current Process of Handling Seat – Set Mismatch), aligned with the TPS principles, empower employees to remedy problems therefore preventing inventory of problematic cars sitting at overflow, prevents feedback delay through timely information (See Appendices for Exhibit 3: Simulation of Feedback Delay - Time vs. Number of Defects). Disadvantage: Standardizing the new process and will incur additional cost for training. (See Appendices for Exhibit 4: Cost Benefit Analysis).
- Source out one additional seat supplier.
Advantage: This would provide additional flexibility for TMM, minimize waiting time, unloads burden from KFS and helps avoid disruption of processes. Disadvantage: Supplier control, time to train the new supplier to match TMMs way of production, and supplier certification cost. (See Appendices for Exhibit 4: Cost Benefit Analysis).
RECOMMENDATION
The group recommends implementing all the alternatives. Process improvement in the assembly line by sending TMM - QC personnel to KFS and adding QC inspector at the receiving dock is a worthy investment amounting to $141,440 as compared to the overtime pay of $7,311,542 (See Appendices for Exhibit 4: Cost Benefit Analysis). TMM needs to improve their current problem handling and recovery system. This alternative is not only financially rewarding (See Appendices for Exhibit 4: Cost Benefit Analysis) but it also supports TPS concept of being dependent on human infrastructure. Lastly, having an additional supplier is recommended for this will further help lighten the burden on KFS as it deals with volume ramp-up and increasing product variations. This alternative aims to eliminate material defects caused by suppliers.
IMPLEMENTATION PLAN
Based on formulated alternatives and group recommendation, we now implement the following;
1. Established a Quality coordination meeting with KFS to resolve the issues on increasing problems on seat supply. The meeting will resolve recurring issues on seat supply like material flow and missing parts (highest in defect trends). The meeting will be the venue for follow up on revised parts on hook (engineering drawing), it can be implemented at cost of $50,000, account properly to TMM or KFS, which depends on agreement of the party.
2. Send TMM QC representatives in KFS in two shifts for one (1) week only to establish “Learning to SEE” principle and help eliminate defective car seats supply delivered in TMM plant.
3. All deliveries of KFS car seat in receiving dock of TMM should be inspected by stationed QC inspector.
4. Start immediate sourcing out of new probable supplier of seat set to cope up demand on increasing production commitment and design variability.
5. Conduct a re-training and re-awareness program to the operator on line in regular basis to provide the people in line with dependable knowledge. Job rotation should be delayed while variation of product is rampant and issues in seat problem is not yet fully address.
APPENDICES
Exhibit 1: Five Whys Analysis
Exhibit 2: Current process of handling seat-set mismatch
Exhibit 3: Simulation of Feedback Delay (Time vs. Number of Defects)
Analysis: Assuming on an 8 – hour shift the number of defects drops as timely response and feedback helps eliminates problem at an instance.
Exhibit 4: Cost Benefit Analysis
Note: Using a 10% Minimum Attractive Rate of Return
Computations and Assumptions as follows:
