Process Optimization & Innovation in a Fabrication Environment

1. Process Optimization & Innovation in a Fabrication Environment Lean - Six Sigma implementation. A force multiplier for Increasing Performance & Profitability

2. Profitability gap with the competition • A recent study by the NAM and the Manufacturers Alliance (MAPI) found that U.S. companies have a 22 percent unit-cost disadvantage compared with overseas competitors in a number of process operational cost areas, a major one being energy. • According to EDC Chief Economist Peter Hall; "Managing through the upcoming slow months and a continued high dollar will require ingenuity and grit,........ Canada can expect even more intense competition.”

3. Process Optimization is the most cost effective solution to improving productivity. Implementation improves a company’s ability to lower operating costs & compete internationally. Lean targets the root cause of operational inefficiencies identifying and eliminating waste and in tandem with Six Sigma based statistical quality control protocols ensures the production of an error or defect free product. Process Optimization has 2 dependences/components; Lean-which focuses on processing efficiency & Six Sigma- which focuses on product (or service) accuracy by targeting variation in output. Both are data-driven approaches to problem resolution rather than personal opinions or beliefs. 

4. Lean - Six Sigma implementation is thus that silver bullet; that can level the playground of global competitiveness. It is that force multiplier for Increasing Performance & Profitability; that minimizes the effect of lower labor costs; by significantly increasing the productivity of the work force. LEAN targets WASTE. Delay, waste, non-value added work such as, unnecessary transportation, and motion, waiting for information needed for a decision, making mistakes that have to be corrected, etc. are all forms of waste and rework that affect costs & schedules.

5. The October 2011 issue of the Harvard Business Review, states: "Lean principles can generate significant benefits: faster response time, higher quality and creativity, lower costs, reduced drudgery and frustration and greater job satisfaction." ………….. "Knowledge workers ... grossly underestimate the amount of inefficiency that could be eradicated from their jobs."  Delay, waste, non-value added work such as, unnecessary transportation, and motion, waiting for information needed for a decision, making mistakes that have to be corrected, etc are all forms of waste and rework that affect costs & schedules.

6. According to Tata Steel "To remain competitive, companies essentially have to improve business performance. They have to create a focus on the bottom line. They have to reduce mistakes in every aspect of the company: product defects, incorrect billing, wasted materials and inefficient production processes. Six Sigma is a disciplined methodology that focuses on moving every process, product and service toward near-perfect quality." The example of GE, Ford, Tata & many others, validate that implementing Lean & Six Sigma is a proven driver to corporate profits.

7. Implementing a Lean mindset also means accurately analyzing costs. The following is a case study from Lean.org • When a customer approached its aluminum casting supplier, a job shop near Chicago, with the "China price" in hand for a key part, the supplier made an unusual suggestion: Before relocating the work, let's do some "lean math" together. • The lean math analysis looked beyond piece price plus slow freight costs from China and counted such factors, among others, as: • Increasing lead time from 12 days to 115 • Additional freight • Duty • Carrying costs for additional safety stock inventory • Increased warranty and scrap costs. • Instead of re-sourcing, the customer pursued cost, quality, and lead time savings through extended value-stream mapping with its current supplier in Chicago.

8. LEAN & SIX SIGMA protocols of Quality Assurance involve data collection & analysis. The root cause of any problem can be located & in effect solved. In the fabrication industry this is almost not done, with the emphasis being on QC (code compliance), which by definition is resource draining. My own theory is that fabrication industry, by & large, considers welding as an art; never mind that welding procedures (WPS) are rigorously documented. Till such time as the industry makes an effort to collect operational data; the value (resource) enhancing ability of QA cannot be leveraged. Analyzing process data and identifying root causes for defects & deviations leads to implementation of corrective actions & fool-proofing of errors

9. Lean Six Sigma Strategies Problem Statement Goal FASTER PROCESSING (LEAN) BETTER PRODUCT (6 Sigma) CHEAPER PRODUCTION COSTS (6 Sigma) • DELAY • DEFECT • DEVIATION

10. Lean promotes efficiency by ensuring breakdown free production & targets operational waste through drastic reduction in repair or re-work. Six Sigma targets product (or service) variation by tracking process/product metrics. The goal is to reduce process or product variation (or process/product defects) to 3.4 (6 Sigma); spaced over a million operations.

11. LEAN targets Waste as the enemy of any process.  By identifying and eliminating it, you can transform your company into a Leaner, and ultimately, a more profitable organization.  Lean targets the root cause of operational inefficiencies identifying and eliminating waste and in tandem with Six Sigma based statistical quality control protocols ensures the production of an error or defect free product.

12. Lean & Six SigmaProcess Optimization has 2 dependences/components; Lean-whichfocuses on processing efficiency & Six Sigma- which focuses on product (or service) accuracy by targeting variation in output. Both are data-driven approaches to problem resolution rather than personal opinions or beliefs.  LEAN SIX SIGMA Six Sigma targets product (or service) variation by tracking process/product metrics. The goal is to reduce process or product variation (or process/product defects) to 3.4; spaced over a million operations. • Lean promotes efficiencyby ensuring breakdownfree production & targets operational waste through drastic reduction in repair or re-work.

13. Lean • Waste is the enemy of any process. By identifying and eliminating it, you can transform your company into a Leaner, and ultimately, a more profitable organization.  • Over production. E.g. E.g. Over re-inforcing the weld. Worse, welding a root pass too wide leads to the bead sagging in the overhead position. • Waiting (time delays or idle time between processes). E.g. completion of NDE, poor scheduling of filling passes. • Transportation ( Improper or unnecessary handling);E.g. Poor logistics planning, leading to repeated moving welded cans or plates. • Inventory Holding or purchasing excessive material, or materials not meeting code or client specification. • Motion Non productive/non value adding operations such as Materials & tools needing to be located (poor housekeeping);located at a distance; • or for repair of defects. • Over processing (Unnecessary processing steps that lead to producing scrap or parts that require rework. • Defects • Ignoring innovation. Not using human resources optimally (not implementing the ideas / suggestions of employees).Not empowering/involving employees in optimization campaigns.

14. Six Sigma • PDCA • SQC • PDCA: Plan-Do-Check-Act or • DMAIC: • Define- the specific problem or improvement focus area. • Measure- Data Collection of existing process. • Analyze- weaknesses defects-process deviations & locate root causes. • Improve-through data generated solutions Pareto-Ishikawa. • Control- Fool proof the process.

15. STRATEGY • One does not need to invest in exotic & expensive statistical protocols & further invest in training to accrue benefits. Leveraging QA personnel into simple data collection & analysis duties as enumerated below. • Mapping (flow-charting) the process. • Value Stream Mapswill identify the process steps that are causing delays. Action can then be taken to remove the source of those delays. • Spaghetti Diagramswill in turn identify and eliminate unnecessary movement of people or materials.

16. STRATEGY • Control Charting to measure and monitor the performance of any process. • See the example of tracking weld deposition rates of various welders on a shift, as well as, an individual welder through an 8 hour shift.

19. STRATEGY • These control charts can then be used to identify & benchmark best performance. • Using the benchmarked performance of FIG.1, the individual control chart FIG.2 can now be analyzed to locate reasons for performance deviation. • Aside from time, factors such as current, arc distance, time to change the electrode, etc. can all be analyzed.

20. STRATEGY • Once identified, the root causes of the bottle-necks in the process can now be targeted, using Pareto graphing, & Ishikawa (fish bone) diagrams. • The example below, shows types of defects/discontinuities noticed during a standard vessel fabrication campaign & the methodology of eliminating them.

21. Pareto Chart

22. Materials Process/Methods Fillers purchased on cost basis basisMaterial Cleaniless? Improper parameters To copy all fishbone "objects" Use Cntl-Shift-A Trace elements in consumables? Wide WPS parameters Ambient Air Circulation Improper Weld Preparation? Problem Statement Why? Why? Weld Defects Cable Grounding? Training? Contact Cleanliness? Planning/Work Instructions? House Keeping? Why? Preventive Maintenance? ? Why? People Machines

23. STRATEGY • Matrixdiagrams are like check-sheets, or work instructions, similar to ISO 3834 protocols which provide the welder with a concise summary of what parameters will ensure not just adherence to code, but optimize performance. • It minimizes performance variation between welders; fool-proofs the process & prioritizes corrective actions. In effect, it standardizes output, making specifications easily achievable.

24. Conclusion • Call to Management. • Spending time on grinding spatter, chipping slag, grinding welds down to final size or reworking/repairing parts, is a resource depleting effort. It slows production rates, reduces operational efficiencies dramatically; & drains value from the project. • Not tracking performance on the shop floor is equivalent to not tracking your personal finances or instruments. It is a recipe for disaster especially in competitive international environments.

25. Conclusion • Call to QC/QA personnel. • Get out of the rut of constant conflict with production, issuing warnings, NCR’s , basically conducting a janitorial clean up every time a code violation occurs. • Take a leaf out of how the project management group functions. Chart out an action plan; plan a schedule. Begin with just a small amount of data & control chart it. • Involve welders & supervisors in locating the root cause. You will generate a shop floor ally. • It is a statistical fact that over 95% of the problems can be attributed to the process, not to the individual. • The documented results & the joint effort solutions will result in a reduction in repair & schedule delay, something that will be noticed & appreciated. • Nothing shines like documented profit.

26. Conclusion • RTS can provide guidance & training through simple, uncomplicated collection & analysis of process data, using very cost effective & uncomplicated software (under $300) to expose the root cause. • Once the root cause or process deficiencies are eliminated; the Quality function will become a value addition & improve the bottom line. • Get a true understanding of the cost of welding, & use Lean & Six Sigma to generate corrective actions to become internationally competitive.

27. Raya Technical Services • We provide process Optimization services through implementation of Lean & Six Sigma • http://www.rayatechnicalservices.com/lean_six_sigma • http://rayatechnicalservices.com/submerged_arc_welding_nozzles • http://rayatechnicalservices.com/rfid_process_optimization_through_traceability